How to Start a Purpose-Driven Venture
Mike Quinn is a 2007-08 Skoll Scholar and Oxford MBA alumnus, he is also the co-founder and former CEO of Zoona, one of Africa’s earliest fintech companies. With over 10 years of experience running a successful social business, Mike shares his hard-learned tips and experiences on how get a purpose-driven venture started, built and scaled. This is the first article in the series, how to ‘start’.
In October 2019, I had the privilege of being a Social Entrepreneur in Residence at Oxford’s Saïd Business School. I delivered three talks and coached dozens of entrepreneurial MBA students who were seeking practical advice on how to start, build and scale a purpose-driven venture. This blog summarizes my first talk, ‘How to Start,’ with the others to follow.
Start by falling in love with a big problem
When starting a new venture, there’s a lot of pressure to come up with that one novel idea that nobody has ever thought of before. It can be discouraging at the idea formation stage to hear comments like, ‘Oh that’s not very unique!’ or ‘There’s another company already doing that!’ This pressure can lead to you spending a lot of your time trying to come up with a unique solution before choosing and understanding the problem you want to solve.
This is a backward approach for a few reasons. First, it’s almost impossible to come up with an idea that someone else hasn’t thought of or tried already. Second, if another company is already doing it, that means there is a real-life analog to learn from. And third, trying to come up with a solution before fully understanding the problem is the fastest way to start-up death.
A better approach is to spend time up front falling in love with a big problem. Pick a problem that you are passionate enough to spend the next decade of your life solving. Make sure it is big enough that no one solution will solve it completely. And be confident that if the problem no longer existed, the world would be a better place and you would be proud to have contributed to the solution.
Falling in love with a big problem is what will keep you motivated through all the investor rejections, people challenges and product failures that will surely come.
Pick the right co-founder(s)
There is a saying that ‘Founder’ is the loneliest number for good reason. There is so much to do when starting a new venture that having a team of 2-4 co-founders can make a huge difference in both the venture’s success and everyone’s well-being. However, finding the right co-founder(s) can be fraught with challenges, especially for first-time entrepreneurs.
Before you look to find others to work with, you should start by finding yourself:
- What is your purpose?
- What are your core values?
- What is your personality type?
- What are your strengths and weaknesses?
- Which tasks do you jump out of bed for, and which drain your energy and cause you to reach for the snooze button?
I like to capture these on a ‘Me on a Page’ document that I review monthly to keep me grounded.
Next, understand that the ideal co-founder(s) enables you to be the best version of yourself (and vice versa). Find people who share your passion for the problem, resonate with your values and are equally committed for the long haul. Make sure they have complementary strengths and weaknesses and are people you enjoy being around.
This is a high bar to meet, and so it should be. Over my ten years at Zoona, I spent as much, if not more, time with my three co-founders as I did with my wife. We experienced exhilarating highs and gut-wrenching failures together. We had to work in a pressure-filled environment that was never stable, even when things were going well. Working in a start-up will either bring co-founders together or destroy relationships, so it’s critical to be purposeful about the people you will share this special bond with.
It takes time to know if you have the right co-founder(s), so in the interim there are some practical steps you can take. For example, ‘try before you buy’ by agreeing up front to test for fit and working relationships before formalizing anything. Build in staged check-ins and exit off ramps where people need to either commit or leave. When splitting equity, introduce share vesting so that a departing co-founder returns their unvested shares back to the company. Have honest conversations and learn how to give each other feedback. This all takes courage and maturity but is absolutely necessary if you want to build a successful venture.
Rapid prototype to discover product-market fit
With the right problem and co-founder(s), you will have solid foundations in place to shift your focus to discovering product-market fit. Your goal is to develop a minimum viable product (MVP) that solves a major pain point for your targeted customers. You also need to validate that they are willing to pay for your product above what it costs you to deliver it. If you’re lucky, they will start telling other people who are like them to try your product, and you will achieve lift off.
A lot of things have to come together for this to happen, and it’s typically a race against time and running out of cash. If you spend all your time building a perfect product in your office, you are destined for failure.
Rather, take a rapid prototyping approach. Start with a small and consistent customer segment. Get to know who they are, their pain points, and the root causes of their pain points. Learn from them about how they already overcome these pain points on their own. Then, design hypotheses for how you could help reduce or eliminate their pain. Test hacked solutions that require the least amount of time and money to develop and seek quantitative and qualitative feedback. Make adjustments on the go and keep iterating as fast as possible until you have a working MVP and delighted customers.
With any new venture, there is never a guarantee of success and always a high probability of failure. But if you get these three foundations right – falling in love with a big problem, picking the right co-founder(s), and rapid prototyping to discover product-market fit, you will be off the starting blocks and living the entrepreneur lifestyle!