Every business is built on certain leaps of faith — visionary (and possibly wild) ideas that set you apart as an entrepreneur. The best founders explicitly acknowledge these leaps of faith and aggressively test them. A risk dashboard is where you write this stuff down, which you can now do from your startup toolkit account page. The easiest way to think about it is as a todo list for the stuff that’s liable to kill your business.
This is about finding a small number of very key big questions
you try to answer early on. (KMVT interview with Komisar)
I ran into risk dashboards through Komisar & Mullins’ (K&M) Getting to Plan B and I think they should be in the weekly toolbox of every startup founder. You may know K&M already — Komisar spoke at the Startup Lessons Learned conference and both he and Mullins really understand what makes new businesses unique.
The dashboard is organized into Leaps of Faith which are tested by running experiments. An experiment is just a belief that can be validated or refuted. One of non-obvious the benefits of dashboarding is in finding the smallest, fastest, cheapest way to validate a risk — in other words, more minimal MVPs. A lot of “what to do next” decisions are pre-emptively answered by “build more of the product.” But when you’re staring right at the big question on your risk dashboard, it’s easier to realize that you can get the data you need through interviews, analogs, or a throw-away mini-product.
Your business model is closely related to your risk dashboard. If you see an empty block on your canvas, it’s a pretty safe bet that you should be running some experiments to get the data you need to answer those questions. Risk dashboarding is an ongoing process. Once you answer your top questions, you adjust based on those results and start looking at the new big unknowns.
An example: Day 1, my technology doesn’t work, I don’t know if the
customer will buy it, and I don’t know if I can get any distribution.
Why am I focusing on my revenue line? It’s a red herring. Once I answer
those 3 questions, now revenue becomes an important leap of faith.
Those leap of faith questions, by the way, are a rolling set of questions.
You start with the ones that are going to kill you today. You answer
them or decide they’re no longer relevant, and come up with the next set
that are going to kill you tomorrow. (KMVT interview with Komisar)
If you want to learn more, Getting to Plan B is a great book filled with actionable guidelines for startups and interesting case studies. It’s pretty quick to keep track of in a notebook or spreadsheet, or you can check out the online version from your toolkit account.