Written by Kevin Volz.
Speed is key for tech startups. These entrepreneurs have to think fast, work fast and produce results fast. They’re entering a world where technology is changing every second, and an idea could become obsolete at any moment. Getting from concept to market fast is the mantra of the lean startup movement, and the central philosophy of Toledo, Ohio’s LaunchPad incubator.
As part of Ohio’s network of incubators, LaunchPad is funded through Ohio Third Frontier with support from the University of Toledo. The organization was originally formed in 2006 as a clean/alternative energy incubator, but has been in the midst of a rebuild since January 2014. At the start of that rebuild, LaunchPad supported three tech companies. Today they have 20 tenants and two graduates, growing by 450 percent in 2014. Startup focus areas now include alternative energy/advanced manufacturing, biomedical/biotech and IT. LaunchPad connects startups to area partners for mentoring, funding and additional assistance with marketing plans and intellectual property legal counsel.
“Ohio Third Frontier is the conduit for us to accomplish entrepreneurship and innovation in our region,” said Molly Reams Thompson, director of LaunchPad. “They support the framework we are creating for startups here in northwest Ohio.”
A key part of that framework is the Lean Launch methodology. In the past, it’s been the belief that all companies, no matter how small, should focus on creating traditional, static business plans. At the core of Lean Launch is the belief that startups should replace these lengthy business plans with a model that’s fluid and flexible. The Business Model Canvas is a tool that can help companies adapt their plans quickly in the ever-changing, highly competitive world of startups.
“The Business Model Canvas has helped me develop a product that better fits my customer segments,” said Tom Burden, founder of Grypshon Industries, a LaunchPad tenant client. “This avoids wasting resources and promotes increases in sales.”
Whereas traditional business plans take a long time to write and are rarely updated, the Business Model Canvas can be created in less than half an hour, and is easy to change with shifting market conditions. It’s essentially a one-page visual chart that lays out a new business’ foundation, including its key partners, resources, customers and revenue streams. LaunchPad also uses the GrowthWheel, a tool that focuses on the action steps needed to grow a business, including marketing, networking and securing facilities and funding.
“We believe that these two tools are very effective in allowing our startups to see their companies from a 360 degree perspective. This view allows them to make decisions and take actions to move forward in the most effective and efficient way,” said Reams Thompson.
While the LaunchPad team advocates strongly for the lean startup movement and the Business Model Canvas, it is really their tenant companies speaking to the success.
“Using a Business Model Canvas allows for crucial business questions to be made decisively and effectively,” said Connor Kress, founder of Hephaestus Ltd., “Its ability to identify value propositions and highlight the customer delivery process is key to determining whether an idea is feasible. Ultimately this tool provides a firm foundation to develop an idea, and a pathway to capitalize it.”