Fire bullets first, then cannonballs

How to avoid costly mistakes in building a sustainable business or a side hustle.
Fire bullets first, then cannonballs! — Jim Collins

Experiment and test your ideas before going big


To avoid costly mistakes in our start-up or in the side hustle, we need to be sure to a reasonable extent that the idea will work out. The risk we take must be calculated and the expected negative consequences must be affordable.


The cost can come in various ways such as money, time and people. Whichever it is, it’s best we avoid them, for obvious reasons!


To achieve this goal, one of the proven methods successful businesses use is experiments and the empirical data.


Empirical data is the information one has based on past experiences and knowledge. It says what works and what doesn’t.


The power of firing bullets


Imagine you have a limited amount of firepower to hit a certain target. You can decide how you use the firepower. You can either go big or you can play it small. The goal is to hit the target with an impact which will make a difference.


We need to first calibrate our efforts to ensure that we will be successful in hitting the target. How do we do this?


We fire bullets first!


What is a bullet?

Bullets are small and cheap. The impact they can make is small as well, be it good or bad. If it’s good, we will get closer to the target. If it’s bad, the damage will be smaller and affordable. Then we can calibrate better before firing the next bullet.

We keep firing bullets, keep calibrating our gun from what we learned from the last bullets. Soon, the target will be hit for the first time. Then we keep hitting the target until we are sure that the gun is calibrated well and solid.

In business, the concept is similar. A bullet is an experiment or a test we run to find out if an idea will work out or not. Be it a product or a service or a combination of both, the successful businesses are experimenting all the time.


Can a service oriented business/side hustle experiment?

Yes!

In today’s world, it doesn’t matter whether we are offering a product or a service. We always have to market and sell. There is no better way than reaching customers online because it’s the cheapest and most effective. Especially given the pandemic situation.

A service oriented business/side hustle may experiment to find the right customers. Some customers go after cost while some go after value. It’s important to segment our customers so we can make sure to pitch the right sale.

For example, a last mile delivery service provider can experiment to find out what will give the biggest conversions based on value or cost.

Variant#01 The simple and easy solutions for all your delivery needs : focus on value

Variant#02 The cheapest delivery solutions for all your needs : focus on cost

Once we decide the variants, it’s just a matter of reaching out to two sets of your customer base. Then conclude what variant is performing (converting) better based on data the experiment will generate.

It doesn’t have to be only two variants at a given time. We could run any number of experiments simultaneously if variants make sense and affordable.


The cannonball…

Once we have sufficient experiment data which favors an idea, it’s time to go big. When we know something is working, fire the big gun. Fire the cannonball. The impact? It’s massive!

More customers, more cashflow and more profits!


Again, we need to be sure.

A common practice in business is that going big doesn’t happen over night even after favorable experiment data. It happens incrementally.

If the initial sub set is 5% of the the total customer base, next logical decision could be increasing it to 10%. Check the data again. If still proven positive, go for 20%, then 30%, 50% and eventually 100%.

That’s how a cannon ball is fired.

Fire bullets first, then cannonballs!

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