Dyme founder Joran Iedema returns to the VU to share his thoughts on entrepreneurship
Shortly after graduating from the VU’s joined honours program at Amsterdam University College in 2016, Joran Iedema co-founded Dyme, a fintech startup that analyses transaction data to help consumers save money.
17-10-2019 | 10:37
During the guest lecture, Joran discussed the practical applications of Eric Ries’ Lean Startup methodology and explained how the Lean Startup principles helped him build a successful company with very little starting capital.
Joran believes that applying the Lean Startup methodology was vital to Dyme’s success. He identifies three major lessons that were crucial and recommends anyone starting a company to take these to heart:
1. Write down the most important assumptions behind your idea
There are a number of key assumptions that underlie any start-up idea, and the validity of these assumptions is critical to the business’ success. For instance, if people had been unwilling to rent out their apartments to strangers, Airbnb would have been doomed to fail, even with the most beautiful product and appealing marketing campaigns.
When we first had the idea for Dyme, we wrote down our most important assumptions:
1) consumers would use an app to manage their finances;
2) consumers trust Dyme enough to connect their bank and;
3) people would pay for Dyme’s service.
The next step is to determine whether these assumptions are actually valid.
2. Validate your assumptions before building a product
After listing your assumptions, it’s time to validate them. Try to find ways to do this without wasting time or resources. In Dyme’s case, we tested our assumptions by running a number of Facebook ads that would redirect to a ‘coming soon’ product landing page. We only spent around €500 on this validation test.
For example, to test whether the first hypothesis: ‘consumers would use an app to manage their finances’ was valid, we ran an ad that listed Dyme’s value proposition, and then measured how many people would actually click on it. The people that clicked the ad were prompted to join Dyme’s waiting list. This experiment indicated a strong demand for Dyme’s service and thereby validated our first hypothesis to some extent.
3. Bring together a complementary founding team
After you have successfully gone through the first validation stage, the next step is to build a minimum viable product (MVP). This is a basic version of your product that contains the most essential features, but lacks a slick design or a seamless user experience.
Instead of spending your savings on hiring a developer, it is usually wise to find a technical co-founder at this point. Technical leadership is extremely important in a start-up, and having a technical founder is considered a huge plus by Venture Capital investors.
Once you have your MVP (and preferably your technical founder), you can continue testing your hypotheses at a larger scale, while also signing partnerships with larger companies, joining an incubator, or even getting your first round of investments.
For more information on the Lean Startup, read Eric Ries’ book.