The (not-so) Secret Recipe for Instant Startup Success — and all before you reach your first round of funding!
To say starting a successful startup is difficult would be an understatement, especially considering the facts.
According to Harvard, 25% of all startups fail in their first year. 36% of the rest fail in their 2nd year, 44% in their 3rd, and 50% of those remaining in their 4th.
Harvard paints a bleak picture. But what about the 10% of entrepreneurs whose startups are successful?
Do they have a secret roadmap to success that the rest of us don’t?
The answer is, yes… and no.
3 Vital Ingredients for Startup Success
For a startup to be successful, it needs to have three vital ingredients.
1. Idea/Product Validation
2. Prototyping/Creating the MVP
If you’ve read Eric Reis’s manifesto about the Lean Startup Approach, then you know the ingredients I’ve listed are the same as his principles of Build-Measure-Learn.
The fundamental difference between his views and mine is the “status” of the startup. His approach governs the startup while it’s in business, whereas mine governs the product/idea before a startup is created around it.
1. VALIDATING THE IDEA — The Core Ingredient
So let’s suppose you’ve got an idea for a product that has the potential to be big.
But before you dive head first into making your idea a reality, you need to validate it. Think of it as putting your life on the line. Since you’ll be investing all your time, energy and, maybe even money on it, the analogy isn’t far from the truth.
To validate your startup idea, you need to ask your idea a few questions.
· Is my idea/product going to solve a problem? Because remember, you can only help when there’s a problem.
· Is there a similar product/service solving the same problem?
· What percentage of people face this problem?
· What obstacles do they face when trying to find a solution to this problem?
Asking these questions is just the first step in validating your idea. The next step is to find answers to them.
This is where market research and competitor analysis comes in. Do a thorough analysis and you’ll have a clear roadmap of the next steps you need to take.
Startups often skip this steps because they either lack the business acumen or the funds to conduct a market research and competitor analysis. Luckily, there’s a way to do this whether you have the funds or not.
If you have the funds…
You can hire people to do your research and analysis for you.
If you don’t have the funds…
Don’t fret. You can do the research on your own. Start scouring the internet for case studies, op-ed, scholarly articles, research papers, thesis, etc. targeted towards the segment you’re trying to solve the problem for.
But, nothing beats primary research.
Talk to the people who are facing the problem. Gather their insights, find out what difficulties they’re facing because of this problem. Get their opinions. What does their ideal solution look like?
The more you talk to the people facing the problem your startup will be solving, the better your product will be.
Don’t let something as minor as geographical distances get in your way. If you think your idea/product can solve a global problem, try connecting to as many companies/individuals in other countries as you can. I don’t have to tell you how easy it is to conduct surveys and interviews online.
In the end, ask each of them the all important question:
Will they buy your product?
If the majority answers no, then you need to go back to the drawing board, and figure out a better, more proactive way, of solving the problem.
If the answer is yes, then you can move onto adding the next essential ingredient to your startup success recipe.
Now that you’ve validated your idea, you need to execute it. Start by building a prototype or creating an MVP.
A Minimal Viable Product (MVP) — is an early version of your product that includes all the core features but none of the bells and whistles. An MVP should only take one-third of your actual product cost and development time.
Again, if you have the funds, you can have the MVP or prototype built, by hiring a freelancer or company. If not, then you’ll need to decide how you’re going to have the prototype built without spending any money. If you’ve got the skills, you can create it yourself too.
Prototypes can be of different levels.
a) Power Point Presentation — many bootstrapped entrepreneurs, have successfully used PPT presentations for pitching their vision and idea to potential investors, startup incubators, accelerator programs and potential customers.
You can, easily and successfully, do the same.
b) Wireframes — Wireframes let you create a basic sketch of your product. Think of them as the flow chart that will help your intended audience visualize and understand your product without actually building it.
Wireframing tools such as Wireframes.cc and Balsamiq are some good options.
c) Storyboard — A storyboard building tool or service will help you visually describe the experience your users will have when interacting with your product.
d) PSD — You can just as easily use Photoshop to create a working prototype of your product. As always you can find free resources that help you create PSD prototypes such as Marvel.
Once you’ve got your prototype you need to see how people react to it.
Get back in touch with the people you approached in the first step i.e. your sample and put your prototype in front of them and ask for their feedback. Will they use it? Is it solving their problem? Do they want to add a feature that would make the product even better?
Instead of looking for kudos, look for the devil’s advocate. Look for the people who are willing to pinpoint its flaws and failings. Constructive criticism is what you’re looking for. Get as much constructive criticism as you can.
Once you have the feedback, it’s time to add the final core ingredient into the mix.
In most instances Reiterating comes when the product has already been developed.
And even though you don’t have an actual product yet, the principal is the same.
Based on the feedback provided by your sample in the previous step, start making changes to your prototype. Adding or removing features based on their recommendations will ensure your product is well received once it’s launched.
Once you’ve reiterated the prototype send it back to your sample (if they’re still willing to provide feedback, if not then find yourself a new sample!).
If they approve of the new and improved prototype, you’re ready to move onto the next step –finding and pitching investors to invest in your startup. If not, then keep reiterating until your prototype becomes the product they can’t wait to use.
Next Step: Pitching investors and VCs
Your product/idea is now ready to take its next crucial step — pitching investors and VC.
The benefit of reiterating your prototype is that when you approach investors, you can be confident about its feasibility and the positive way it will be received by your target market.
Investors too will be more open to investing in a product (or product idea) that has already been exposed to its target market with promising response.
Paying attention to these three fundamental aspects before starting your startup will mean you have a successful product in your hands before you’ve launched.
If you were an investor looking to invest in a startup, which would you prefer?
An entrepreneur who has done not only his due diligence but created a re-iterated prototype based on user feedback or ann entrepreneur who was merely bringing his idea (which could have some potential) to you?