An entrepreneurial journey often begins with a very high level of belief and conviction that we are going to change the world, however, the reality can hit hard and your journey can quickly become bumpy.
Whether you’re a first-time founder or a seasoned entrepreneur launching your next venture, this read is made for you. In the pages ahead, I’ll unravel the hard truths, clear up misconceptions, and navigate the hurdles that often catch us off guard.
From the moment you come up with your idea to figuring out who your crowd is and distinguishing between users and customers, I’ll cover it all.
Getting started
So, you’ve got this brilliant idea, poured your heart into creating a product, and excitedly launched it into the market. But wait for it… crickets. It’s a classic mistake, especially for first-timers — thinking the market dances to the beat of your belief. Let’s dodge this common pitfall, shall we?
There are several things you need to do before launching and getting investments from investors.
Solution in search of a problem
A solution in search of a problem or multiple solutions in search of problems refers to a proposal that lacks the ability to solve a genuine problem or offer value. It typically involves attempting to address a need that doesn’t actually exist.
A modern example of a solution in search of a problem Blockchain, is still in pursuit of a problem to solve. So never start with a solution without a clearly defined problem. Focus on tackling a single significant problem instead of compiling a list of ten minor issues.
Validating a problem
When you identify a problem, don’t keep it to yourself — share it with a community of people. This helps ensure that the problem isn’t just a personal hiccup but resonates with others too. It’s not just about talking; use this opportunity to gather valuable data and start building your audience.
When reaching out, have a handy form for them to fill out. Sneak in an optional email field; that way, if you roll out a solution, you’ve got a bunch of eager folks ready to give it a shot.
Validating a solution
To validate your solution effectively, craft a prototype with a laser focus on addressing the specific problem at hand rather than overcrowding it with numerous features. Once ready, share this solution with your friends and send it via email to those who signed up during the initial problem validation stage.
A sample email
Subject: A beta test inquiry to slove [problem in one or two words]
body:
Hey [recipient_name],
I am [your_name], couple of weeks ago you had filled a form stating you had a problem with [state the problem]. I put in some time to build a potential solution and wanted to inquire if you would be interested in trying the solution and provide me your feedback.
Looking forward to your response.
warm regards,
[your name]
Find a partner
Nearly every successful startup boasts at least one co-founder, and there’s no shame in sharing the credit. Take Facebook, for example, with its five founders, including Mark Zuckerberg.
When seeking a co-founder, prioritize complementary skills and shared values. If, say, you’re a coding whiz but lack finesse in sales and marketing, scout for someone suitable at networking events or through platforms like YCombinator’s co-founder matching.
Before diving deep, iron out the equity details. A rule of thumb: your co-founder should hold at least 10% of the business. Of course, this can be adjusted based on your unique circumstances.
User Vs Customer
Always remember
Users are liability, customers are assets
Your users and customers are not the same, this is specifically true for software products that run on freemium or free version.
Users are people who use your product and customers are people who pay to use your product. Take Instagram for an example its users are creators and people who visit the site, and their primary customers are people who pay to advertise on their platform.
Now that you have made the distinction, try to convert as many users into customers before your liabilities go up.
When to start charging users?
Some money is better than no money
As early as possible. Even in the initial stages, consider adding features exclusive to paying customers. For subscription models, explore offering discounts on annual plans and present a range of plans to make it accessible for everyone to become a valued customer. The key is to start monetizing your product or service at the earliest opportunity,
Hiring
Knowing to deligate is a key part of being a leader
A widespread misconception suggesting that success is directly proportional to the number of employees isn’t always the case. Take WhatsApp for instance, which had 450 million users with just 55 employees when it was acquired by Facebook.
Conversely, there’s a misguided belief that handling every aspect alone is the key to making a startup thrive. In reality, it’s a flawed approach. The art of successful leadership lies in recognizing when and what to delegate. It’s about knowing how to distribute responsibilities for optimal efficiency and growth.
Investors
Knowing why you need money
Securing external investments, especially in the early stages, can be challenging unless you have a solid background and connections in the industry. Investors are generally more receptive when the team boasts a well-qualified background.
It’s important to note that if your venture doesn’t demand substantial external funding, it’s wise to hold off until you’ve achieved meaningful sales. Early-stage sales not only indicate market demand for your product but also serve as a powerful indicator of its viability.
Furthermore, successful early-stage sales pave the way for more efficient and timely investments, propelling your business toward expansion. In essence, making sales before seeking significant external funding is often a strategic move that aligns with both market validation and investor confidence.
Wrapping up
In this short startup guide, I believe you’ve gained insights on problem validation, solution validation, distinguishing between users and customers, and understanding when to seek investment. My hope is that these nuggets of wisdom become valuable companions on your entrepreneurial path.
If you’re a founder, remember to pay it forward — share this guide with fellow entrepreneurs. After all, in the world of startups, collective knowledge and shared experiences propel us all forward.
