Probably every book on entrepreneurship nowadays will teach one particular lesson: If you fail, fail fast.

But when one is working on building a business, this is easier said than done. There is a natural tendency to keep things going even if they might initially not be successful. The temptation is to keep saying: "It needs more time to develop…", "We just have to adjust x, y, and z to make it work…". After all, it is difficult to abandon something one has spent a lot of time on creating.

What can help to make these tough decisions, is to define the measurement of success early on. If there is clear and easily observable criteria and a predefined timeline, one can compare the as-is with the plan.

A second important lesson I took away from the past weeks is to be very clear about the development cycle.

Test - Prove - Grow

Testing new ideas requires to make assumptions and build a hypotheses. That hypotheses will have to be tested on a small scale. Once different parameters (eg the pricing model for a new product, or different distribution models) are tested, one should already be in a position to identify what certainly won't work.

At this point, it is about proving the business model by running a well-defined and monitored pilot. For the pilot the most difficult decisions are about the infrastructure to be built. On the one hand, one wants to make sure the pilot is as close to a potential business-at-scale as possible. On the other hand, it is impossible to spend the time and effort to build out the business model perfectly, without risking never ending loops of discussions and hence, delays. A pragmatic balance is needed and the focus needs to be on "getting it done".

Only once the pilot has proven the core components of the business model, it comes to growing it to scale. Surprisingly many start-ups seem to try getting debt financing before this step. But this can be disastrous. Only with a proven business model (when the business risk is somewhat observable), should an entrepreneur start adding risks to his balance sheet by adding debt financing.

By setting clear standards early on and doing efficient testing and proving of a business model, entrepreneurs can "fail fast", if they need to.