Risk Roadmaps

Become a Lean Growth Strategist

What 's in the courseHi,

Good to see that you joined us to learn how to become a Master Entrepreneur . This e-book teaches you all about the strategy of growth by learning you how to map your risks.

This is an essential part, especially when you're early on in your startup, there are so many risks in different areas that you're running your business on assumptions. The sooner you can verify if those are correct or not, the sooner you're ready for exponential growth!

Cheers,

Pieter

Intro: Risk vs Work

Strategy

1. Market Risks

2. Product Risks

3. Channel Risks

4. Ignition Risks

5. The Process

6. Conclusion

Risk vs WorkThe Epic Startup Time-SuckStartups are not small versions of big companies. A corporate structure has

undergone a whole process in which a startup is still in the middle off.

St ar t ups are all about r isks.

This is what most entrepreneurs do wrong, they measure progress in terms of work. If

I put another x amount of hours in my product, these extra features will be ready.

Then, if I do a couple of funding rounds, I'll have my investments and I can fine-tune

my sales channels in a couple of weeks, etc. etc.

However, launching a new product is trying to solve people's problems. To check your

progress in terms of problem solving, you need to verify a couple of question/risks, to

know if you will succeed. Questions like:

- 'Will enough people really care about my solution (for their problem)?'

- 'Will I be able to build that special feature that makes my product special?'

Before starting to build your complete product and do endless rounds of fund-raising,

you have to verify the risks that lie at the core of your startup.

StrategyBuilding a company involves solving different problems every day which will

give you new insights on which you want to form a new plan. Every problem

you solve and risk you verify brings you one step closer to success.

The ultimate goal for a startup must always be: to reach Product/Market fit

(P/M-fit). P/M-fit is the moment you verified all your risks. The moment you

stop being a startup and start to become a real business.

The way to get to P/M-fit must be as cheap and fast as possible. Translate

business models into tangible roadmaps that you can act on with focus &

clarity. Most importantly, make it easy to change and adjust.Adaptability is

your only way to compete with the existing market.

Your risk roadmap should be the ultimate strategy to get your P/M-fit. In this

guide, we'll teach you how to make a risk roadmap, covering all the risks

startups face:

- Market Risks

- Product Risks

- Channel risks

- Ignition Risks

What it does

Any business is fundamentally about solving problems (and charging for

solving). If you don?t solve any kind of problem you probably don?t have a

real business. There is always a big risks that the market simply doesn?t

care about your existence, simply because they don?t feel a strong pain.

Market risks relate to the following parts of the Business Model Canvas:

- Problems & pains

- Customer segments

- Value proposition

- Revenue model

Note: it?s NOT about your product.

Market Risks1Examples

1. Do people care about the problem that we?ve set out to solve?

2. Do people understand us? Is our messaging clear?

3. How much can we charge?

Mindtricks

- The #1 reason products fail is because they aren?t solving a problem anyone has. Always focus on problems first, before you worry about the product.

- Market risks are externally focused. This means you need market feedback to reduce those risks.

- Nothing beats 1-on-1 customer development interviews. You?re never too big or too busy to speak with individual customers and learn about their problems.

- Market risks are tricky, because for the most part you can?t control much about it: if the market doesn?t care then you can?t really change much about that?

What it doesTo solve a customer?s problem you need a solution. That?s where your

product or service comes in! But what if you fail to build the right

product, or to build the product right?

Product risks relate to the following parts of the Business Model Canvas:

- Product (or solution)- Costs structure

Product Risks2

Examples

4. Can I hire enough ultra-smart rocket scientists to solve the complex

technical problems we face?

5. Decisions on software architecture, product design, etc.

Mindtricks- Product risks are internally focused. You don?t need market feedback to

reduce those risks. (you do need to fully understand the problems

though, but that?s market risk? )

- Product risks can be reduced by spending more time or money. Or

both. And that?s great news, because you can control that yourself.

You?re not at the mercy of other people / the market.

- For most businesses ? especially online ? the product risks are much

smaller than their market risks.

- Sketches, designs, mock-ups and interactive prototypes are great ways

to make sure you build the right kind of product. Every dollar you

spend on design & product strategy you?ll earn back 5X in

development.

- Almost every startup founder overestimates product risks, and

underestimates market risks. Probably you do, too. Is making the

product really that complicated, compared to getting people to pay? ? 

- Product risks tend to be very expensive to reduce: building the product

or new features us usually the most expensive thing a startup does.

Relatively low risks + high costs make that product risks are generally

the last thing you should worry about!

SpaceX really illustrates this: they have massive product risks, they need to

build rockets & infrastructure to fly people to Mars? ! So the product risks

that Elon Musk had to worry about:

1. Can we produce rockets that are much cheaper than is currently the

standard?

2. Can we build rockets that return back to earth for re-use?

3. Will this thing explode? Can we make the rockets safe enough?

What it does

Failing to reach enough customers cost-effectively. So you?ve got a great

solution that?s solving a painful problem. Soon everyone will hear about it

and start buying it? No, even great products need marketing and great

distribution. 

Market risks relate to the following parts of the Business Model Canvas:

- Channels- Costs structure

Channel Risks3

1. Can we acquire users for below $1.50 each?

2. Do Facebook ads work for us?

3. Can we find a traction channel to bring us 30,000 new sign-ups before December?

Examples

4. Will message spread virally via word-of-mouth? (answer: probably not)

5. Space X: can we efficiently reach decision-makers who buy rockets to Mars?

Mindtricks

- Channel risks are the #1 reason startups fail. Most startups underestimate channel risks and can?t build channels effectively. This is where growth marketing comes in?

- Growthcasts is all about this: we teach you how to build scalable growth engines and unlock powerful traction channels.

- In the Traction System Guide we show you how to pick the right channels. This is the perfect way to start dealing with channels risks.

What it does

Can you get the momentum going to make your business model work? Even

for a ton of TNT to explode you need a spark to get it going. Sometimes a

business also needs a kick-start to get the engine going. This generally

occurs in 2 situations:

- Network effects ?  in marketplaces & social networks everyone waits

for the rest to show up. It?s a chicken & egg kind of problem.

- Funding ? you need money to start the business and build the

product

Important: not everyone faces ignition risks. If you don?t have strong

network effects working against you then there?s probably no ignition risk to

worry about. Lucky you!

Ignit ion Risks4

1. Facebook: will we ever grow outside Universities? Can we gain enough

network effects to beat MySpace?

Examples

2. Space X (again!): Elon Musk needed many millions just to create the first proof-of-concepts. If his ?Paypal Maffia? friends hadn?t supported him with generous funding SpaceX would have never existed.

3. Almost every marketplace: buyers waiting for sellers, and sellers waiting for buyers. You need both at the same time to make it work. 

Mindtricks- Over the years funding risks have fallen dramatically. It?s cheaper than

ever to start a business, learn the required skills yourself, and just get going.

Step 1: Create risk roadmap, per cluster

To get started you want to divide your document into 3 parts. One part for market

risks, one for product risks and one for channels risks.

Take a few moments to write down all the risks you are currently facing in your

business.

The Process

Step 2: Draw conclusionsIf you look at your three sections you'll probably notice that they're not all equally

risky. You might find that market risks make up 80% of your overall risk profile.

Keep in mind, not all risks are created equal. Prioritise your risks based on 3 factors:

- First, 'riskiness', this means bigger risks go first.

- Second, 'reduction potential', how much can you reduce the risks? Because of

course some risks are easier to reduce than others.

- Third, look at 'costs' how expensive is it to reduce the risks? You want to start

with the low-hanging fruits. This will likely mean that product risks come last,

because building products (even MVP's) is expensive.

It 's called a roadmap for a reason: now it 's rime to identify the next steps to reduce

the risks. Be careful when you are prioritise, where do you have most to gain? Look

for big risks that you can reduce a lot with litt le money.

In the end the roadmap should be a clear set of actions that you and your team can

execute on. Keep it practical and actionable.

Step 3 is also where tests and MVPs are created. In the Hustler MBA you'll learn much

more about this!

Step 4: Execute and UpdateFinally, time to get your hands dirty because now you're done with the strategy part.

By now you've achieved these results:

- You?ve become a growth strategist

- You always know what to focus on for maximum impact

- You?ve gained clarity on where to focus your efforts

Whenever you've tackled some major risks you might loose clarity & focus again. Now

you'll have a medicine to cure the chaos. Sit down and quickly revise your risk

roadmap, it will take about 10 minutes and then you should be good to go again. This

will give you the focus that any startup team so desperately needs!

Step 3: Create Next Step Action Items

Unlocking strategic clarityYou?ve now seen how to execute a risk roadmap. This simple exercise will cost

you roughly 20-30 minutes, but it?s the #1 process to gain strategic clarity.

You'll become a strong Growth Strategist ? and a better entrepreneur.

Key Takeaways:

- You know that efficiency comes through focus & increased strategic clarity.

- Startups are fundamentally about reducing risks. Great entrepreneurs relentlessly focus on cutting risks. That?s your #1 job as a CEO.

- Risk roadmaps allow you to gain strategic clarity when others feel confused. You always know where to focus.

- You know what it takes to become a Lean Growth Strategist. ? In the rest of the course you'll learn the rest of the necessary skills.

Conclusion

Become a Master Ent repreneurHi,

Awesome, you're on your way to becoming a Master Entrepreneur. If you don't have a clear strategy and priority list, any 'opportunity' can easily become a massive time suck.

Now you've learned how to filter through possibilit ies and find clarity and focus. By making your own risk roadmap, you will be able to shoot your startup to P/M-fit faster that light.

Cheers,

Pieter