June 20th, 2017 | By: Emma McGowan | Tags: Early Stage
When you’re working on an early-stage startup, figuring out what your business goals should be — like what you should be achieving and at what stage — is difficult. It’s not like school, where there are clear steps that lead to the next level. Or even like traditional businesses, which have clear business goal templates. No — early-stage startup founders often struggle with the nebulous nature of their business goals.
Lucky for you, there are experts in this who have great advice about what should be achieved — and when — for early stage startups.
Here are seven business goal posts you should be aiming for as you grow your early-stage startup.
Your minimum viable product is the earliest version of the product you build. Getting the first iteration “out there” should be the first thing your list when you begin setting business goals for your early-stage startup.
By fleshing out the leanest version possible of your product, you are able to get feedback in a more timely manner. In turn, you can then build out several iterations using real feedback to improve your initial product sooner than if you built what you originally envisioned.
Your MVP should be rough around the edges — maybe even a little embarrassing — but functional enough that you can use it to figure out what you should work on next, based on user feedback.
“MVPs help entrepreneurs and corporate intrapreneurs outsmart the odds of failure by compartmentalizing big decisions—and big risks—into a series of smaller ones,” Storyhackers co-founder Rita Puri writes in Read This Before Building Your Next Product. “As a result, we’re empowered to course-correct our decisions before risks outpace our chances for success.”
Once you have your MVP, you’ll need to get some feedback. One of the best ways to get that feedback is by offering a limited amount of users access to your products via private beta. This should be second on your list of business goals. The customers who see your product in private beta should be invite-only. They’re your core group — the people who need your product — because you’re going to rely on them to give you feedback as you work out the bugs.
“When in doubt always build a product that is a painkiller rather than a vitamin,” marketing expert Vinay Koshy writes in How to Find the First 100 Customers for Your Startup. “To do this get to the root of your customer’s problems, not just the symptoms.”
So, you’ve built an MVP, tested it out in private beta, and maybe you’ve started redesigning and/or iterating — but you’re not quite ready to go public yet. This is a great time to bring on a key hire, someone who can take your company to the next level. You’ve proven the need for product, if not quite found product/market fit, and you’re ready to make it awesome. Bring on the help — you’re going to need it.
“For a startup, people are as important as the idea,” founder Devishobha Chandramouli writes in Building the ‘A’ Team for Your Startup. “And while expertise is a non-negotiable asset, attitudes and values are what can determine a meaningful association as a team with a common vision.”
The design, feedback, iterate, redesign, feedback, iterate cycle is one that should be ongoing throughout your startup’s life. However, when it comes to business goals, the first redesign and iteration needs to happen immediately after you get feedback from your private beta users.
Examples of questions you should ask are:
“[Startups] learn from the results of each test, refine the hypothesis, and test again—all in search of a repeatable, scalable, and profitable business model,” Stanford professor Steven Blank writes. “In practice, start-ups begin with a set of initial guesses, most of which will end up being wrong. Therefore, focusing on execution and delivering a product or service based on those initial, untested hypotheses is a going-out-of-business strategy.
Think you’re ready to launch into public beta? Ask yourself if you’ve done private tests, prepped for a potential PR swarm, and made sure your technology can handle it if you get a bunch of new users. However, don’t ask yourself if your product is “perfect.” (Pro-tip: It’s not — and it never will be.)
Check out this interview with Dropbox founder Drew Houston for more insight into what can happen when your public beta goes crazy.
After your public beta launch, you’re going to be in the redesign/feedback/iteration cycle for a while as you figure out how to best refine your product. Within two years of launching, one of your business goals should be to hit at least one major milestone. That milestone is something you and your team should set together and it should focus on traction — i.e. customers, clicks, downloads — or profitability (FYI: This is unlikely). Whatever it is, you’re going to need it when you go to raise funding.
“Prove your metrics – then raise capital,” Startups.co CEO and co-founder Wil Schroter writes in Where to Focus Before Raising Capital. “Don’t try to hit the investor trail with nothing but an idea and expect things to go well. You typically get one shot at raising capital, so make sure you stack the odds in your favor.”
If you’re going to convince people to give you money, you better have a compelling argument — and it better be backed up by data. Your first investment round — or “seed round” — shouldn’t be attempted until you’ve checked off everything in the list above. It’s the last thing on your list of business goals for early-stage startups.
“Investors write checks when the idea they hear is compelling, when they are persuaded that the team of founders can realize its vision, and that the opportunity described is real and sufficiently large,” Geoff Ralston writes in A Guide to Seed Fundraising. “When founders are ready to tell this story, they can raise money. And usually when you can raise money, you should. Therefore, founders should raise money when they have figured out what the market opportunity is and who the customer is, and when they have delivered a product that matches their needs and is being adopted at an interestingly rapid rate.”
Ultimately, there are no strict rules for business goal or milestones for early-stage startups because, like snowflakes, every startup is different. But it always helps to have a little guidance along the way, so we hope this loose outline of business goals helps.
Emma McGowan is a full time blogger and digital nomad has been writing about startups, living with startup people, and basically breathing startups for the past five years. Emma is a regular contributor to Bustle, Startups.co, KillerStartups, and MiKandi. Her byline can also be found on Mashable, The Daily Dot's The Kernel, Mic, The Bold Italic, as well as a number of startup blogs.
Follow her on Twitter @MissEmmaMcG.