May 18th, 2018 | By: Wil Schroter | Tags: Development, Product, Branding, Acquisition, Minimum Viable Product (MVP), Customers, Validation, Ideas, Early Stage
Starting a startup isn’t just about opening your doors or launching your website. Long before that happens, it’s about planning to launch.
There’s a real art form in the planning, and those who have launched a lot of startups — as we have — approach launching a new idea very differently from someone who’s just taking on their first startup.
Simply put — we emphasize spending as little time as possible on chasing ideas that may not work. We’re nuts about efficiency.
We know that time is both our friend and our greatest enemy. And we do everything we can to protect our time so it’s spent in the most efficient way possible.
So what does that actually look like? Here are 10 steps to launching a startup, from someone who’s been there (a few times).
We all get enamored with brilliant solutions: “Wouldn’t it be great if…” is the mantra of every new startup. But it’s much more important to articulate the problem than the solution right now.
For example, the solution might be that Netflix delivers movies on any device for $15 per month.
But the problem is far more important: Cable is too expensive. Broadcast television severely limits your choices of what you can watch.
People are now using mobile devices, as opposed to their TVs, to consume content, so multi-form factor output is important. All of these concerns should form the basis of what your solution will ultimately become.
The solution can change over time as you get more familiar with the problem, but spending some serious time articulating the core problem will help guide your efforts around everything from marketing to product development — at every step of the way.
It’s the North Star of a startup.
Before you lift a finger or talk to anyone about your idea, research the hell out of it online. Every minute you invest in researching online saves you 10 minutes of building your startup blindly, only to find out out that customers are flocking to a different solution to the problem you’re solving.
Don’t limit your research to “Is there another company doing the exact same thing?” There may not be.
Instead, focus on “Where can I find examples of how people are solving this problem in a different way?”
People were watching plenty of movies before Netflix. So it’s not like the problem of watching movies wasn’t already being solved in different ways.
Find out what customers spend on the problem now. Read online reviews to find out if they’re happy about it.
You’re building a picture of how the problem you’re solving is currently being solved — and where the holes are — so you can start to formulate the best possible product.
Nine times out of ten, the answer you’re seeking already exists in someone’s head. Often that head belongs to someone who’s worked in some version of your industry before.
If you’re Netflix founder Reed Hastings, you’d be interviewing people who worked at the highest levels of Blockbuster, HBO, Time Warner Cable, or major studios.
You want to find out why the existing solutions don’t seem to be working as they should. You want to hear their war stories and learn from them, instead of having to learn the hard way yourself.
If you’re nervous about approaching an expert — who may be someone you’ve looked up to for years — I have a pro tip: You’d be shocked at how willing people are to help.
Nothing gets an industry expert talking like asking questions about the world they’ve lived in for so long. Reach out to strangers and ask hard questions. Go deep on interviews.
Think of every question you get answered from an expert as a shortcut to an entire lifetime of experience you don’t have to gain from scratch.
Long before you actually start working on the actual product, you need a product concept.
This is the story you would tell a prospective customer about what the product will be some day. You need to give it as much detail as possible, without actually having the product.
Reed at Netflix would say “Imagine you could open your Web browser and instantly access thousands of movies and TV shows whenever you wanted them, on any device.”
He’d go on to explain how you could watch entire seasons of shows, jump from one device to the other while watching the same show, and all the other wonderful features that Netflix boasts.
Your product concept is critical. It’s what you’ll share and refine a million times before you start spending actual cycles building the real thing.
Functionally, it can be anything from a paragraph text description to concept sketches to a PowerPoint presentation.
What’s important is that it paints a picture that potential customers can react to.
Beta users are your very first customers. In some cases, they’re customers before you have “real” customers.
They’re the people who are willing to try your stuff out when anyone else wouldn’t even think about it. They are your early adopters.
You don’t have to wait until you have a product to get beta users. You can start by identifying those who would be a likely customer (not just your roommate who happens to be sitting next to you on the couch).
You can begin with your product concept and eventually transition to your actual product later on.
What’s important now is that you identify these users and keep learning from them as you refine the product.
It doesn’t have to be a massive group — it could be five to 10 people — but you have to keep presenting your idea to them until it clicks.
MVPs are usually associated with tech startups, but they aren’t limited to tech startups. The idea is to create the simplest version of your product and let your beta users play with it.
Almost every startup can create an MVP. It just requires some creativity.
For example, if you’re opening a restaurant, your MVP could be cooking the exact menu you have in mind for dinner parties in your neighborhood or catered events.
If you were going to create a fashion brand, it would be creating a handful of samples that you convince your beta users to wear.
If you were starting a services business (like accounting), you’d bring on a handful of clients free of charge in order to show them how your service works.
The MVP isn’t just about making early money. It’s about knowing for a fact that your first attempt at a product will be flawed — probably many times over — and about using this iteration as a way to learn how to improve the product until it’s awesome.
You’ll often find your beta users from people you know. They’re basically the “low hanging fruit” of people who clearly have an interest in your product.
That’s super helpful, but the real test is getting strangers to use your product. That’s where early customer acquisition becomes important.
There are essentially three parts to early customer acquisition:
Chance are you’ll refine these three elements hundreds of times before you get them right. What’s important now though is just starting the testing process.
In the online world, that often means running ads on Google and Facebook, sending customers to a landing page to sign up, and then trying to figure out how to convert that signup into a paid customer.
But that’s just one way to acquire unknown customers. Your version could involve sourcing new clients, how to convert them into a sale (during a sales call for instance) and then how to maximize their value by keeping them as a client.
In every case, it’s just another version of learning how you’re going to acquire customers.
As you talk to more and more customers, you’re going to start to see a pattern emerge around what they really want and expect out of your product.
They are essentially asking for your “brand promise” — what can your brand promise to deliver if people use your product.
If you’re running a yoga studio, can your brand promise an incredibly uplifting experience? How?
Every great brand (and some shitty ones) are built on a brand promise that keeps customers coming back. You need to refine your brand promise and move that to the top of all of your communications.
It’s not just a tagline on the bottle of your craft beer. It’s an implicit feeling that you can constantly deliver every time someone interacts with your company or your product.
As startups grow, they often look at customer service as a necessary evil to keep selling more product. That’s definitely the wrong approach.
A formative startup wants as much customer feedback as possible, no matter how awful it may sound at the time.
At Startups.co we have over a million companies on our platform and every single one of them gets an email from the Founder + CEO Wil Schroter. (Hit Reply and see how quickly I respond!)
Instead of looking at it as a million potential complaints, we look at it as a million potential points of feedback. And all of our customers are founders themselves, so they provide amazing feedback!
Maximizing customer feedback is the lifeblood of a new startups product roadmap. Every single data point helps shape the highly formative nature of the product.
That includes every possible channel from in-person customer interactions to back and forth tweets to voicemails left after hours.
Every data point matters because every customer interaction tells a story of where the product is supposed to be going.
And the last step of the cycle of launching a startup is reassessment. It’s time to take a look at what you’ve done and honestly decide whether or not it’s a good idea to keep going — or if it’s time for a pivot.
What are you hearing from your customers? Do you have a clear path forward? Or does it seem like your initial idea isn’t going to cut it, after all? Is someone else doing it much better than you ever could?
Be honest with yourself, because continuing on with a startup that’s not working is a great way to go bankrupt.
You might have to go through this cycle a few times before you find the idea that truly fits both your market and your passions.
But when you get there — when you finally nail that perfect idea and product/market fit — there’s nothing better.
I’ll see you when you get there.
Wil Schroter is the Founder + CEO @ Startups.com, a startup platform that includes Bizplan, Clarity, Fundable, Launchrock, and Zirtual. He started his first company at age 19 which grew to over $700 million in billings within 5 years (despite his involvement). After that he launched 8 more companies, the last 3 venture backed, to refine his learning of what not to do. He's a seasoned expert at starting companies and a total amateur at everything else.
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