3 Tips For Starting Your Startup
Startups seem to be the new black - approximately three are founded every minute. More than $50b in venture funding is invested every year. 9 out of 10 will fail within three years of being established. Not great odds. So why do founders keep at it?
A great startup can change the world. The device you are reading this article on now was made by a company that was once a startup. Almost every aspect of our society has been enhanced by technology and the startups behind that technology.
One of the most amazing things about startups is that there is a reasonably low barrier to entry - almost anyone with an idea can found a startup. That is both good and bad. It's great because it democratises the business landscape. It's unfortunate because a lot of founders start their business without a roadmap to guide them.
There is no magic formula for startup success; however, I will try and give you three things that might tip the scales of success in your favour.
Fall in love with problems
I generally meet two kinds of founders - those that love problems and those that love solutions. The difference between the two is enormous.
The trap that some first-time founders make is falling in love with their solution. While solving a problem may seem like the point of a startup (and to a certain extent it is) - having a deep understanding and love for the problem you are trying to solve has a lot of benefits;
Firstly, your initial solution may not be the best one. You may burn through dozens of potential solutions until you find the one that is wanted by the market - and is scalable, repeatable and profitable.
Secondly, founders who are attached to problems are far more coachable. Those that are in love with their particular solution usually aren't willing to listen to customer or market feedback - the result of which is generally driving their startup off a cliff Thelma and Louise style.
Ideas are cheap. The world is full of them. Not all of them are great, and indeed, not all of them can be developed into a sustainable business. Steve Blank defines a startup as "a temporary organisation in search of a scalable, repeatable, profitable business model."
The first step in evaluating your idea and growing it into a business is by focusing on your value proposition and business model. By thinking about and articulating your value proposition, you will focus your energies, define what problem you are solving, who you are solving it for, and how you are solving it.
An example of a value proposition statement could be:
Our ride-sharing service, helps the mass market, who want to travel from A to B, by reducing the pain of owning a car and dealing with terrible taxi drivers, and increasing the convenience and quality of service, unlike regular taxi cabs.
The formula for a value proposition statement is;
Our (product), helps (customer segment), who want (jobs to be done), by reducing (customer pain) and increasing (customer gain), unlike (competing value proposition).
This may seem self-evident. However, I see many startups without a clear value proposition or business model. Also, using a tool like the Lean Canvas can help you iterate and explore potential business models. Spend a disproportionate amount of time working through this. It will save you time and money in the future.
Validate, validate, validate
Your business model and value proposition will be littered with assumptions. One thing you need to do if you are to be successful is to prove or disprove those assumptions as quickly and efficiently as possible.
The means designing tests and experiments and getting out of the building to speak to potential customers. Some founders are afraid of customer feedback - fearing the "ugly baby" response. Don't be frightened. All feedback is good feedback.
The absolute number one reason why startups fail is they build a product or service that nobody wants. The sooner you can find that out, the sooner you alter course and create something that will have customers beating a path to your door.