Lean, Mean, Start-up Machine: the Balloon Approach to Business
Lots of businesses fail. Most start-ups fail. For every Zuckerberg, there are thousands more people whose great idea comes to nothing more than years of frustration and a steady stream of capital flowing down the drain.
In Africa, the mortality rate of businesses is particularly high, with only 1/5 of small and medium scale businesses reaching their fifth anniversary. In countries such as Kenya, where unemployment figures make for painful reading, providing businesses with the tools they need to survive in an unforgiving market can have a huge impact.
My progression through the Balloon application process was a bit of whirlwind: stumbling across the programme on the application deadline date; a hastily submitted application; an email informing me that UCL would be funding my trip; and, finally, boarding a flight from Manchester – it all seemed to pass in a flash.
As a result, arriving in Nakuru I was hit by the realisation that I’d had little time to mull over the specifics of what I’d actually be doing – would I really be anything more than a hindrance to the entrepreneurs with whom I’d be working? In 6 weeks could I possibly play a part in steering their businesses away from that well-trodden path to failure? I felt potently unqualified.
Yet, within a few days of starting training, the utility of the Balloon business approach had become very clear: it does not necessitate hours spent pouring over convoluted business plans, instead it emphasises the need to get out and start testing your basic idea with customers. If it works, great, build on it. If not, well, at least you haven’t invested too much of your time and money in a defunct product. Adapt it and start testing again – eventually you’ll get something right!
This strategy of product development occurring in conjunction with customer development, dubbed the ‘lean start-up’ approach, was originally developed with Silicon Valley tech start-ups in mind. However, its appeal quickly became widespread.
A strong desire to be your own boss permeates Nakuru, yet financing here is not as easily available as in Silicon Valley. If a business fails here, the capital lost is not that of a venture capitalist, but of the entrepreneurs themselves, making the ‘lean start-up’ philosophy particularly valuable.
Solomon is an entrepreneur who runs a business supplying household essentials such as cooking gas and food grains. He wants to expand his product range to include phone credit and accessories. The method of testing central to the Balloon programme will enable Solomon to determine whether playboy bunny phone cases exert any attraction in the Kenyan market, while minimising risk and keeping invested capital to a minimum.
This may seem like an obvious concept – why would anyone develop a product without first thinking about who’d buy it? Yet, entrepreneurs can become so caught up in their own ideas that they neglect the most important aspect of their business: their customers. By providing a new perspective and ensuring that entrepreneurs keep the lean start-up mentality in mind, the Balloon programme encourages entrepreneurs to challenge their assumptions and steers them away from failure.
By Gus Allen, Balloon Kenya Fellow, Nakuru 2015