What's the Startup?!

Build Your Startup Smarter + Inside Market Fit Lab with John Truitt

• Kaylan Thompson

Share episode

Want to build your startup without wasting time and money? In this episode, we sit down with John Truitt, Entrepreneur-in-Residence at Sprocket, to talk about what makes or breaks a startup—and how to get it right from the start.

John has worked with countless founders and has seen firsthand what separates successful businesses from the ones that fizzle out. He breaks down:

  • The biggest mindset shifts founders need to make
  • Why falling in love with the problem (not the solution) leads to success
  • How to identify switching triggers that drive customers to buy
  • The common mistakes that waste time, money, and energy
  • Why speed of learning is more important than speed of execution

We also introduce Sprocket’s Market Fit Lab, a startup-building framework designed to help you validate, refine, and launch your business the right way. If you’re serious about turning your idea into something real—without wasting valuable resources—this episode is a must-listen.

Learn more about the Market Fit Lab and the West Kentucky Innovation Challenge: www.sprocketpaducah.com/challenge

Know someone who needs to hear this? Share this episode with them.

Read more at https://sprocketpaducah.com/build-a-startup-without-wasting-time-and-money/

Thank you for tuning in to this episode of the Sprocket Podcast! If you’re ready to dive into the world of startups and innovation, visit us online at Sprocket WKY to learn more about our mission and how we support entrepreneurs like you.

Ready to check out the space? Book a tour with Tiffany, our Community Coordinator!

Got a business idea? Apply for a mentorship session with one of our experienced mentors!

Stay connected and join our growing community on Instagram for the latest updates, inspiration, and behind-the-scenes looks at what’s happening at Sprocket.

Let’s turn your ideas into reality—together!

Sprocket is proud to be supported by Team Kentucky, the Commonwealth's Cabinet for Economic Development. Learn more about their initiatives and resources at ced.ky.gov.

Kaylan:

Welcome, John, to the podcast. Thank you. Tell us about yourself and what you do here at Sprocket.

John:

My name is John Truitt. I am the entrepreneur in residence here at Sprocket. I've been an entrepreneur since 1991 and, I have worked for companies as well, but I've always had a lot of passion for building businesses and being in business and being my own boss and, you know, those kinds of things.

Kaylan:

What entices you? What initially drew you into that lifestyle?

John:

I liked the idea, of building and making a business and the whole startup process, the process, of coming up with an idea and then bringing it to reality and finding customers and building a business and hiring employees, all the whole process to me. It just always is exciting

Kaylan:

You've worked with a ton of entrepreneurs over the years and you yourself have most likely evolved since you first started, where are some of the biggest mindset shifts or shifts in mentality that startup founders need to make?

John:

So I definitely think one of, the shifts is that starting a business and operating a business are skill sets and they're different skill sets than whatever you're doing inside of that business. And a lot of people become entrepreneurs because they have some sort of technical skill in some area. And so they decide they want to go out on their own. Maybe it's just, they're going to go out and start their own. It could be a law practice or maybe they have an idea for a product, and they have technical expertise around it. on that, making that product, whatever that technical expertise is, doesn't translate to being a successful business person. It doesn't translate to starting successfully and growing successfully. You really need to learn almost just as much in those categories as you have to learn in whatever technical category you're in, and that's, I think something that a lot of founders miss, they're focused on the idea, they're focused on the product or the service, and they're not really thinking about all of the things that go into making, a successful business. So one of the, the mindset shifts that,, we've implemented here with the new market fit lab is, love the problem, not the solution, right? Your product or service is not your business. Your business model is your business. And that takes a little bit of explanation for people. but the idea is your product or service is just one piece of the business. There's a lot of other moving parts of the business. So the model of the business itself is really the business.

Kaylan:

So you mentioned that running or starting and operating a business is a skill set. What are some of those skills that we need to practice or adopt?

John:

So for example, you need to know how to evaluate things that you're doing from the perspective of someone who's thinking about the business as a whole, right? So let's say you're. You're trying to, you're in the early stages and you're trying to figure out if the business is viable, right? Most people, what they're going to do is they're going to go and say, well, how big is the market for this? And if I could capture just a little bit of that market and I have such a great product idea, I should easily be able, to capture that market. Well,, you need to have the skill of, is that even true? Whatever it is that you've come up with? You can get rid of that, you can actually capture enough of that business and there's ways to do that. There again, it's, there are skills that you can apply to determine even before you go to talk to anybody., is this something that you can do? So for instance, you could do some testing to see that this idea that you had to go after this particular customer base in the end is going to require you to have, let's say 20, 000 visitors to your website per month in a market that has A total of 50, 000 potential customers. That's not viable, right? And without having a skillset for being able to do those kinds of evaluations, you're going to miss that and you're going to go build a product and then you're going to go get some initial traction and get some customers and then you hit a wall and it won't go past that wall and you're wondering why, what's going on. I can't get enough of this business. I should be able to. If you would have the skills to do the evaluations that you need to do. do to begin with, then you would have probably modified what you're doing early on based upon your learning in that process, in the application of those skills. So, that's just one, there's a lot of skills. Some of them are, are probably more, a little more mundane, I was in a meeting earlier with a bunch of, people who are either in startups or, small businesses and people were going around asking, or saying what it is that they are looking for and some expertise right now. And a number of the people there were talking about, they really need some help with their taxes., that's a pretty basic thing In business, you need to have A-A-C-P-A. You prob if you're not doing your, if you're not big enough yet to have a bookkeeper, then you need to know how to do bookkeeping or you need to have a bookkeeper. You, those are just basic piece part. or skill sets. when I'm starting a business today, I've learned enough about bookkeeping to be able to keep my books until I'm ready to have a bookkeeper. That's a skill set you really need to have. If you're going to start off and bootstrap it and you don't want to hire a bookkeeper to begin with you, you need to know how to do that. And there's good resources. Those small business development center, for instance, is a great resource that's free to go and learn about some of those skills.

Kaylan:

What are some common denominator mentalities that you've seen? I've seen with successful entrepreneurs versus ones that didn't quite make it.

John:

So one of them is luck, just being lucky. I've seen that. I've seen times where you have someone who the first time they become a, an entrepreneur, they're wildly successful and they even grow a big business, like a big business. And then they sort of step back from the business that made a bunch of money and they're ready to go start some other businesses. They think of themselves as an entrepreneur and they go out and they lose their shirts because they really didn't. they got lucky in that first venture and the, it was by chance and not on purpose. So I would say one of the differences between a consistently successful entrepreneur and people who are inconsistently, who failed too much is that a successful entrepreneur is thinking about the business as an investor would think about the business, that they're, they're not in love with the product or service. They're not in love with the business. They might have some sort of goal in mind for the business that could be a passion of theirs. Maybe the thing, the product or service that they're doing is somehow gonna bring about world peace, right? So they're, yeah, they're passionate about it. But that's different than the business because maybe this particular business is not going to accomplish that goal. I want to know that. And so if I think about it from an investor standpoint, when I'm starting up a company, I can evaluate it with greater scrutiny. And as an entrepreneur, starting up any business, you want to think about yourself as an investor because you are going to invest something much more valuable than money into this thing. You're going to invest your money. life and your time. And typically any kind of a business startup, it takes years to get it to where you could look back and say, yes, this is a successful business. That's years of your life. And in most cases it's long hours. And so if you start that because you're in love with the product or service, Or are you just even in, in love with the idea of being on your own and not having to work for a company? If that's why you're doing it, then you have no idea if what you're doing, is going to be successful. But if you're scrutinizing it from the beginning as Okay. That's an assumption that we're making here in this business model. Is that really true? I don't know that's really true and I'm not going to move forward until I can validate that is actually true. And you're doing those kinds of things. So the way an investor would, you know, you, a startup comes to pitch to an investor, they go through their pitch deck and the investor is thinking about all the assumptions being made and can they prove those things? And if they can't. The investor is probably not going to invest and as the startup entrepreneur, you should be thinking the exact same way. I've got this idea, but there's lots of assumptions, risks and things like that built into it to begin with. Okay. I'm going to be very careful with my time and make sure that it's well invested and I'm going to make sure that this idea is actually going to be worthy of my time in a methodical way. Okay.

Kaylan:

So if you don't fall in love with even being an entrepreneur or fall in love with the solution that you're providing, the problem that you're solving, where does that passion come from? What do you need to fall in love with to derive the

John:

passion? It's okay to fall in love with the goal, right? That's okay. There's nothing wrong with that. There's many ways to get to the goal though, right? And that's the part that you want to scrutinize. If you have a passion, uh, for, uh, You know, public safety, for instance, and you want to, to, you've got an idea for, let's say, police departments or something like that, and you think this, this is going to help save the lives of officers when they're making traffic stops, something like that. You can be very passionate about the idea of safety. Saving officers lives in traffic stops. That's great, but very, very skeptical of this idea that you have, right? One of the things that, um, I think you can fall in love with early on in terms of the business itself is the model itself that I, one of the shifts I've made in my mindset is I used to fall in love with the idea, uh, or the, you know, the product or service, that kind of thing. These days, I want to look at the business model itself, like who's the target customer and why, why would they, what are the problems that they're having that would, that are significant enough that would make a shift? What are the, how do they do whatever they're doing today and how is this significantly better to solve the kinds of problems that they have? What is the value proposition that's unique in this idea and how long term, how am I going to I'm going to protect that from other people just getting in and doing the same thing. Um, how, how am I going to capture the value of this in terms of revenue and profit? And so that, that, that's a business model and that's a, that's a system. And so when I'm interviewing, uh, startup, uh, founders to see, you know, how we can help them, I really am trying to understand their business model. And, and, uh, Um, and there's ones, I had one a couple of months ago that, uh, by the time I got done with the interview, I was totally in love with their business model. I thought this is one of the best ones I've ever seen. And, uh, but I might look at it and go, yeah, I don't really like that. This is, I don't think this is going to work and here's why. Right. And you have to make adjustments to it. But once you get that business model where, yeah, this looks really, really good. Now, I still have to go out and test the assumptions built into it. But I can really, really like the business model again. I think in most cases it works better if you have that end goal in mind. What are you really trying to do? What are you passionate about? And I'm trying to find the right engine to achieve that goal. And the engine is the business model.

Kaylan:

So many things are clicking into place for me. I've never known. I think business model has been something that's been very ambiguous in my mind. I don't know what the pillars are that construct it. Um, but it sounds like you're there. Your target market, your value proposition, your revenue and profit model. What are some things that distinguish a business model that works versus one that doesn't?

John:

Probably the biggest thing is that you've identified, what's called a switching trigger where the customer is doing something, whatever that is, a particular way today. And any time that they. And we have a need to do whatever that is or buy whatever that is, there's a trigger involved in that. And, and that applies to every single thing that we do in life. Sometimes the customer will get into a situation where whatever the way that it is that they're doing it now is not good enough. And it's good to try to quantify, well, how not good enough? Is it so bad they can't even accomplish whatever the thing was that they wanted to do? It to do anymore. Let's say, let's take your car, for instance, if you need to drive to work, okay? Then you need to do what's called hiring your car. Now you already own it, but you're going to actually use this thing that you paid for, right? So you go out and you start the car and you go to work. So you successfully used the existing solution for the job that you needed to do. Well now let's say you've got, you know, you're starting to have problems with your car, right? Um, you know, you've had a couple of. That's it might be time for thinking about a change. That's just pushing you a little bit in that direction. But then you come out one morning and it won't start at all. You try and jumpstart it, it won't jumpstart. And so you have it towed to a mechanic shop, they call you a little bit later and they're like, oh yeah, the engine's seized up, you're gonna have to replace that, it's gonna be 8, 000. That's a pretty good switching trick, right? Yeah. You're probably going to be looking for something different at that point. The more pressure there is for you to make a change and the more attractive alternatives are for the change, the more likely you are to make that shift. And so the problems involved in what the way that you're doing anything that you're doing today are the best place to, to determine if. If you're headed in the right direction. So when you're thinking about, if you're trying to do some brainstorming for, you know, you want to start a new business and just think about potential businesses that you could start, you want to think about when the category that you're talking about the last time maybe you had to use that or you had to buy that or somebody else that you know, or other people, what are the circumstances around that and, and how do you, how do you How difficult is the process and how unhappy are people, you know, those kinds of things. You can do this exercise pretty easily by just thinking about in the last 90 days or so a product or service where you've had a negative experience and you just start thinking about that, that negative experience and what, what were the problems associated with that and kind of write them out to find them. Think about About your own emotional state when those problems were occurring and did you find a solution for that? Yes or no. If you didn't find, maybe you looked and you couldn't find a solution and it was very frustrating. That's an area where there might be a, uh, an idea for a new business. You might start thinking then about, well, so like I did this exercise recently and I was thinking about Christmas, which was a couple of months ago now, and I thought But, um, you know, one of the problems in buying presents for people is when you sort of have this tradition, like Christmas, you're supposed to buy a present, but you don't know what to get for the person. Maybe it's, they're just hard to get for, because maybe they're, they have a lot of money. What do you, what do you get for a person who has a lot of money, right? And so now you have to spend all this time and effort trying to figure out, well, I know maybe what their hobbies are, and I got to go, you know, look up stuff and things. Things like that. And, and, and, and then at other times it's maybe somebody, maybe it's a, uh, an office gift thing at where you put names in hats and you pull a name and you pull the name of somebody else. You don't know at all. Right. And you're like, Oh great. And it's, it's secret Santa. Right. And I'm like, what am I? I don't know what to get this person. A sprocket mug. Yeah. Yay. So you end up getting a gift card, which is okay, but you know, it's, it's like it's The, the phoning it in gift, right? And so, so what I was thinking was, okay, that's the problem is the difficulty of that. How would you solve that problem? And I started thinking about, well, you could probably, maybe what you could do is you can have a service that go online on a website and you, you put in the person and AI goes out and finds them on social media and stuff and get others a little data about them. Maybe you feed in some stuff that you know about the person. And then what it does is it, an AI takes all that. And then spits out some gift ideas and you give it a budget range and stuff like that. And the gift ideas have links with them,

Kaylan:

brilliant,

John:

but they're, um, uh, affiliate links, right? So you click the link, you see the thing, yeah, you buy it. And this business that's this website makes money off of that, right? You can see the process, right? I went from, okay, thinking about what's happened to me in the last few months. That was a difficult process. process. Well, Christmas is always like that, where there's always somebody that you're buying from. You're like, I don't know what to do here. It would be nice if I had a service to do that. But how would that service make money? Oh, affiliate linking. That's how they could make money. That would be a great way. So you got a business idea. So you can, you'll notice. All of that began with the problem, right? So that's really the main thing to be thinking about to begin with.

Kaylan:

I've never heard the switching trigger term before. But in copywriting, when I'm doing customer surveys, Or I, I ask, not only why did you purchase or follow the solution or use the solution, but why now? Because up until this point, they had lived with whatever makeshift problem solving solution up until that point, but they decided now is the time I'm going to hand over my money. What comes first, the model or discovering that trigger, or is it a process?

John:

It's, it's, it's a process. You might think of a model first and then try to start thinking about triggers. You might think of, you might encounter a trigger, um, and think about that first. One of the things that's really good to do if you're going to be an entrepreneur is get used to casually interviewing people and, and have kind of the idea in mind what you're trying to elicit, you know, from them, the kinds of experiences that they have. You don't want to bias. them when you're doing that. Um, you know, like one of the things when you're doing sort of problem validation, I don't want to interview you as potential customer and, and say, Hey, do you have a problem with this? I just biased you. Yeah. Right. I want to say you, you do this process. You buy this kind of thing. Tell me about your experience. And, and so then I, I, I, I, and so why did you like buying it from that store? Oh, cause it was easy. What do you mean by easy? Right? Well, tell me more about that. And you're, you're, you're doing all of that kind of stuff in. So in really what you're looking for a lot of times are those switching triggers. So you kind of, it's something that you want to be doing. All the time as an entrepreneur and get, just get used to doing that. And then if you have a business, it's really good to do with your customers or people that you tried to sell to and you didn't successfully sell to them. Well, why did that happen, right? Mm-hmm I wanna know if my customers are experiencing switching triggers with my product or service right now. Right? And again, I don't wanna bias them because I can't tell. I mean, sometimes you could tell. It's a switching trigger if you bias them, but, but you don't really know if you bias them a lot of the time. And so you, you just learned to have these casual conversations in which you're, you're trying to see where those switching triggers are by, they start talking about the process. And in the process they start talking about the problems that they're having and you're asking them to define clearly those problems and their emotions and, you know, that must have been frustrating for you. Or you could say, well, how, how are you feeling during, that process? And they start telling you what you're looking for. So a switching trigger, if you're going to have a business model, you're gonna start a business. You want, whatever the problem is associated with the switching trigger that you, the solution you come up with is three to time to 10 times better. than the current way that they're doing it. How do you quantify that? That's very dependent on the particular situation. But typically, even though it sounds a little vague to begin with, if you start working through that on paper and really defining it with people in a clear way in a specific situation, you can generally figure out what three to ten times means. And a lot of times there'll be more than one problem. And so you combine them. And so you can take that same process that you would do for figuring out a solution for a business model. You can apply that to figuring out, do you have a switching trigger in your business and your service or your product? If you can see that they have a problem that is a 3x to 10x problem, they're, they're probably already looking for alternatives or they may just not be telling you. And, uh, so this is why you want to constantly be practicing this idea of interviewing people. You can practice on your family and friends, just asking them about their experiences with things where you get really, really good at. Recognizing the problems and the triggers associated with them.

Kaylan:

Tell me about the last time you casually interviewed somebody.

John:

So I have, I had a founder that was thinking about changing his model. And so I was interviewing him about his experiences with what he had been doing and again, not trying to bias him to tell me about your processes with that. How did you do that? But I'm looking for the switching triggers in that, right? Does he have a big enough problem there to, to make a significant pivot to a different model? I do it so often with founders that I'm, I'd have to think about if I've, if I've done it recently with a person.

Kaylan:

It's such a curious concept to my brain, like what are the psychological red flags that you're looking for. How do you know when you've hit a switching trigger?

John:

Um,

Kaylan:

I don't want to like stay too long on that. Yeah, I,

John:

I will tell you, uh, I, I do this when someone is telling me that they have relationship problems.

Kaylan:

Interesting.

John:

I'll start talking to them about, um, you know, the things things that they do in the relationship, right? And, get them to talk about their experiences more than cause they're probably, if they're talking to me about a relationship problem, it's probably because they're having a problem and they're focused on the problem, right? I want to know what were the triggers, and we know that the problem is, is. is associated, with triggers and there's a switching, there may be a switching trigger in the relationship case. It doesn't help so much talking about the problem because one of the things that can happen is as you start to dig down into those kinds of situations where you're talking about the experience that leads to the problem, sometimes you figure out that they're in the relationship, the problem is actually being triggered on their part, not the other person's part. It begins with them because the way this concept of a job to be done is what it's called where I need to drive to work. That's a trigger. My solution is my car. I get in my car and I, I drive. So the trigger is I need to drive my car. That's the trigger. The solution is the car. If the car is breaking down, that's the problem. If it's a big enough problem, then my trigger of, I need to get to work is now a switching trigger. Cause I can't, my solution doesn't work anymore. And so in order to get back to that, what was the trigger? They're talking about the problem. Oh, my car's not working. My relationship's not working. So you start working backwards. Words until you get to what the actual thing was. That was the initial trigger that led to that. I actually do that a lot.

Kaylan:

That's fun. Yeah. I think I do that too. On a subconscious level. I think it's just curiosity.

John:

Yeah. Yeah. I think, okay, so this is a good point. The um, for me, I think one of the most powerful mindsets that an. Overall, the key, that, that an entrepreneur can have is to be a curious person. Just, they're just curious about everything. Know their story. I want to know the origin story of their business. I want to know why and how and all that kind of stuff. And I'm, genuinely, very curious about them. It's easy to get people talking if you're curious about them and you're curious about the successes and failures that they've experienced and stuff like that and, Let them tell their story. And whether you're talking about creating a business model or finding an idea and the people you have to talk to, or sales, I've been in sales for a long time, and the most powerful tool a salesperson or a salesperson has, is,, curiosity. You know, the first thing I do when I meet somebody that I think I, I maybe, I don't even know that they're gonna be a customer. One of the biggest customers I ever landed. I didn't know that she was going to be a customer. A friend of mine, a business colleague of mine, introduced her as his mother. And I was just curious. I was curious why she was at the thing that we were in. It was a chamber event and I was just curious, right? So I just, I'm just curious about what she does and things like that. And, she ended up being the CFO. I'm a CFO of a large, billion dollar company., And the more we talked, she started asking me questions. What do you do? And I start to, she starts asking me questions. And before the conversation was done, she said, I'm going to put you in touch with our CIO because I want to see if you can solve some problems for us. And we solved the problems and gained a big customer. And all of that came out of just being curious, who's this person? What a

Kaylan:

beautiful thing. Why are

John:

you here? What are you doing? To

Kaylan:

be curious about another human. Like, what does that, how does that make you feel if someone's curious about you? Right. Me? Little old me? Yeah,

John:

exactly. Yeah.

Kaylan:

So it's curiosity something, um, how much of it is something that we're born with versus something that we can practice?

John:

Oh, I think you can definitely develop it., if you practice it, you will do it more and more and more and learn, like one of the things, like if you're operating a business, you should be curious any time. Sometimes something happens that seems a little off, maybe it's just a little, but it seems a little off. Why did they say that? And learn to ask a lot of questions again, trying to avoid biasing people. I like, I think this is really important that don't ask people questions where you're trying to dig into something. That you feel like you may need to dig into this, don't ask it in groups. Do it one on one. You may, there may be three or four people you need to ask, do it individually. It's so you're, you'll see different perspectives and things like that. You'll get different stories. You do it all at one time and what you're going to get is groupthink.

Kaylan:

Yeah, so no focus

John:

groups. Actually, there, there are times when a focus group is, is probably a good idea. But, um, I think most of the time a focus group, and you can think of bringing everybody on a team into a meeting to brainstorm about an idea. That's kind, a kind of focus group, and it's probably a bad idea. What you probably should do is go have a meeting. brainstorm separately first and then bring their, the brainstormed ideas back to the meeting. Because we all know there's a lot of different personalities and what usually happens is the more dominant talker in the room is going to, to lead that discussion. That might be me, and then what happens is the heads begin to nod, right? Because they're starting to get biased. They might not have. said that to begin with. I watched in our coffee hour this morning. this thing that I was kind of talking about earlier about, you know, people, what do they need right now and, and what sort of expert do you need in your business right now? And So, two or three people into it, somebody said taxes, and then like three, four other people. Yeah. I need taxes too, right? Why did they say taxes? They said taxes because that person said taxes. It made them think about, Oh yeah, I mean that, right? Okay. Well then they're going to say taxes. Is that really the thing that they would have said if they had just been asked the question by themselves? What's the biggest thing? Maybe. Or maybe not.

Kaylan:

Kind of leads into my next question, which is about, making decisions through the fog of uncertainty., if you're a naturally curious person, I can kind of guess that uncertainty becomes comfortable to you. Because you don't necessarily know what's going to happen, you're going to find out. But one of the toughest things for early stage founders is dealing with uncertainty. How can they train themselves to make decisions through that fog?

John:

So the answer to that question is baked into the question itself, right? It's fog, right? You cannot see very far in fog, period. It's not an option, right? So stop trying to. What you do when you're in a fog. is you look at what's right in front of you. What do I need to deal with and do, um, build, fix, think about, be curious about, ask questions about, whatever it is that's right in front of me right now. And not worry so much about the later stages, you might have ideas about those later stages, but those are later. Right? So, in the market fit lab, what we're teaching is a now, next, later mindset. Okay. What do I need to, what's my riskiest assumption that I can do something about right now? What, what comes right after that and what do I need to save for later and put them in those boxes, right? So I know I'm going to have to deal with something and, but I can't, I don't really know what's going to happen with it. I can't do anything about it right now. And people get caught up in that. Like they, they might want to, I've had this. several times where I have a founder who doesn't know yet whether there's a big enough market for their product and they have the right product for that, that market is working on, uh, you know, marketing mechanisms. They're trying to build a website. Okay. No, you haven't figured out these other pieces first. You do that later. you need to figure out is, have you identified the right problem? Is there a switching trigger? have you talked to enough people in that unbiased way, to see yes, this idea that you have matches or do you have a whole conversation about how they do something and they talk about the problems they're having and they never once mentioned this thing that you're talking about. Okay. Well, they might not be a customer then. And you talk to 10, people. In that same category, and no one ever mentions the thing that you're thinking about, you don't have, you should not build that. So that's the thing that you need to focus on right at that moment, not building a website. And so if you have this now, next. Later mentality, that's how you deal with fog because you can't see this other stuff anyway, right? So just focus on the thing that's right in front of you.

Kaylan:

I can see if you have this now next later mindset, you can put things in boxes and free up that worry. You don't have to worry about that because that's in that box over there and you'll open it when you get to it, when it becomes a now issue. So founders often feel the pressure to move fast,, but you often talk about moving efficiently instead. how do you balance that urgency, with smart decision making?

John:

So if you If you have two runners running as fast as they can, they're in a fog, and one of them's running faster than the other one, the one who's not running as fast will hear the other one scream as they go over the cliff, right? Going fast is not always such a great idea, right? What you want is speed through motion., learning and efficiency. The idea is the speed that you should have is minimizing the amount of wasted time and money because really you can move really, really fast building the wrong product, right? And you think that I got to get to market quick because there's going to be other people doing this. And, and you go and you know, aunt, aunt Sally gives you, you know, a little bit of startup capital. And then you. You found an angel that gave you some more and you're built the, the prototype and you found a manufacturer and you started making it and you're, maybe you even got a few customers and, but two years into it, it's all bust. Well, you went really fast off a cliff, right? So fast, you want to think fast in terms of how quickly can I learn? The faster I learn, the better. It has to be actual, true learning. It has to be learning from the customer, not learning from me and my buddies or whatever, it has to be customer learning. But the faster I learn, the better off I'm going to be, and the least amount of wasted time and money I will make. It begins with evaluating the model where I am doing stress testing on the model to see does this even make any sense when you do stress testing on it. And I m doing that to learn. I m doing that so that that I don t waste time and money. I don t go, Oh this look like a great model and I go try to build it and then it doesn t work. And I could be seeing that to begin with. Speed of learning is the fast that you want, not necessarily just speed of the actions that you're doing. Your actions should flow from a, purposeful methodological process that involves as much learning as possible until you get to the place where all of the learning has come into place to build the right solution. Solution for the right market, with the right messaging, with the right marketing mechanisms to take off.

Kaylan:

So on that note, introduce us to the Market Fit Lab.

John:

Okay. So the Market Fit Lab, is designed for that purpose that I just talked about to save, time and money, to get rid of waste in the process. it's designed to help entrepreneurs from ideation. They've got an idea all the way through., what's called product market fit where you've established enough traction in customer sales. Yeah, it's working. You've got the right product, the right solution. You've got the right customer set. You've got the right marketing mechanisms that you've shown all of that through. You've got enough traction and you know that you're in a big enough market that you can scale it to whatever the goal is for that particular business. Yes. So the, Our market fit lab, our goal is to help entrepreneurs go from ideation to product market fit. And then to scale is a whole different beast that other people can help them with. There are four milestones, in that process from ideation to, to product market fit. And so they correspond to four stages of that process. And so market fit lab, is designed to, to cover those four stages. So the first stage is, business model design, where, you're taking the idea and you're turning it into a business model on paper, doing stress testing on it, and eventually that comes out in a kind of elevator pitch about the idea. And if If you're able to successfully show this, that it passes the stress test, you'll probably have three or four iterations of a business model and they won't all pass the stress test. If you can successfully show, yeah, these are passing, these stress tests, then that's the first milestone. The second phase is the demand validation phase. This is where, and we call this a pre accelerator phase. In this phase, you're going to go out and you're going to start talking to customers and, you're going to have those interviews where you're not biasing them. You're talking about processes. It'll be something associated with whatever your business model and idea is, but, you're talking about them. And usually you're talking to people who you, who use a service similar to that, or if it's something totally new, it's still, there's going to be a service or product category associated with it. And what you're trying to do is just talk to those people about what we call the existing alternatives in, that category. And so you're doing those interviews and from those interviews, you're validating the problem and whether you really have, the problem itself is truly big enough, to be a switching trigger for the, for these customers. If you can then establish, yes, we've identified the problems and that may be you figure out that the problem that you had in your business model wasn't the right problem but you encountered one that, Oh yeah, we just need to switch to this problem instead. Maybe some tweaks to the solution that's going to lead you to creating, essentially a demo of the product and it might just be verbal. It might be some slides that, you're just going to talk about it. What you're going to do, is you're going to go back out to those same customers and now you're going to be talking about a solution, right? And you, what you're doing is you're vetting, is this the right, solution? And you may have to tweak that and eventually you're going to come up with what we call, or what is called a mafia offer. It's an offer that they, they wouldn't refuse. And if you find that your mafia offer is being accepted you've identified the solution is right for the problem That's your secondo milestone that's called problem solution fit. The third phase is where you have to actually build a minimal viable product at that point. And if you had one before, maybe you've tweaked it because you learned some things in the second part of the process, but now you need to go sell. There's a lot of ways to do that. You don't have to have a finished product to do that. You just have to minimally solve the problem that is a switching type problem, right? The milestone at the end of that phase is customer solution fit. And that's where we develop with the founder a Traction Roadmap that shows all of these points and the Traction Roadmap, the Traction is customers that you know how many customers you need at that point in the Traction Roadmap and once you gain that number of customers, you have, achieved customer solution fit. You've got enough of them to buy that product or service that you can. You can say, yeah, this is the right,, solution for this customer set. Then the final phase is the product market fit. The first one you were validating the customers. Now you're going to validate the marketing. And so you identify the engine of growth and you look at, the various marketing mechanisms associated with that engine of growth and you're applying all kinds of testing, to that to hone in and narrow in on a marketing mechanism for that engine of growth that is consistently producing results. Again you keep trying until, Hey, this is kind of working. And now you tweak on that and, and tweak and tweak and tell this is consistently working. You put X number of dollars out to X of value in terms of customers comes out, right? Something like that, and then when you have achieved, again, there's a, on a traction that customer attraction roadmap, there's a point at which you achieve product market fit by the number of customers that you have. The, the revenue that you're achieving at that point. Now, you have proven product market fit. So, that's the market fit lab.

Kaylan:

So the West Kentucky Innovation Challenge is now that first phase.

John:

Yes, it used to be, the West Kentucky Innovation Challenge used to be the first, kind of the first two phases, but it's really, it was heavily focused on the second phase without really doing enough in the first phase. So we've split those and now it's just the first phase. It's the ideation phase. I'm, I've got an idea and I need to know how do I turn that into a business? Well, the first thing is to turn it into a business model. And so we'll go through in that first phase, helping people through a training program, some online tools to learn how to do all of, the design for business model and the stress testing on a business model. And then help them and then they can show have they proven, yeah, they have a viable it's, the three main stress tests are,, the desirability, viability and feasibility and desirability isn't a big enough problem, right? That three to 10 X problem viability. Can you actually capture value in the form of revenue, with this and feasibility? Can you do it in the early stages?, is it really feasible for you to do this, right? So if you think about those, I'm, my idea is to solve, um, come up with a cure for cancer. Okay. I think demand it's there, right? Demand. Okay. I'm going to charge this amount of money for it. Maybe it's a reasonable amount of money. Let's call it 2, 000. Two, you got any kind of cancer, you pay$2,000 and you're cured of the cancer. That's a very viable business All day long. People pay you$2,000 all day long to, to cure cancer. Is it feasible for me to do it Right? How would I do that even, and I'm not gonna be able to show that. It's not a feasible business idea. Right. So that's kind of feasibility. It's, it involves more than we could probably, do here but those are the three main stress tests. We need to know how to do those things. There's tools that we provide for helping you to do those things and training, to help you go through that process. It's a four week process of learning and modeling. And then at the end of it, you'll hopefully have a business model that is, has passed those tests and you've, you, we've helped you come up with your basic elevator pitch for this business model. And we'll have a, pitch competition, pitch presentation for the participants to come back together and do their pitches and talk about their business models. The innovation challenge is free, anybody can come into it and go through the program, if you come out of it successfully with a good business model we have licenses for the second,, phase of that's available. We're gonna be a little choosy who goes from that first phase on, and a lot of times people don't go past those kind of early stages because they figure out this is too much in life for me right now. You know what? That's a legitimate reason. You know, maybe change some things later on and come back to it later But if you come out of that with a successful business model design, and, you're ready to move to the next stage, we want to work with you.

Kaylan:

Awesome. So who's a good fit to apply for the challenge?

John:

Anybody that's got an idea that is a new business, you could come into it if you have a kind of traditional business that you want to start, but you don't really know, but there's really good resources for that kind of stuff. Again, I mentioned the SBDC earlier, the small business,, development center. But if you wanted to come in a more traditional business, you know, a restaurant or something like that. And, You know, we're, we're going to put you through that, that program and it, and it probably will help you. But the main target for us are people with an idea that changes something They've got an idea about how to do something better and that's usually where it starts. It usually comes from experiences where they know all of the problems already. I'm working with one early stage founder right now is just in that business model design. He works in the it industry. There's certain software that he's very knowledgeable about and all of the software competitors available that provide that software are all terrible and everybody's unhappy Switching

Kaylan:

trigger.

John:

Yeah, okay, you got a switching trigger, right? Okay, it would be a big project to do, and there might be some feasibility issues, maybe. Um, it's a market in which you're going to have to disrupt. So your idea has to be truly switching. You can't just do it a little better. You can't just be going to a market like that and be better because it's a saturated market. It be better at customer service as a new business. That's not really going to work. Um, you've got to have some fundamentals that are that three to 10 X better. So it's that kind of stuff, right? It's where I've got an idea that I work in a hospital and I've thought about how it's We could do something different, but I want to turn it into a business. It could be that I'm an electrician and, this product that we use for something in that world, it just doesn't work very well. And I thought I've got an idea about how we can do that better.

Kaylan:

That was full of gold. Thank you, John, so much for dedicating your morning to chat with us.

John:

You're very welcome. Thank you.

Kaylan:

Thank you.