How to “Start in Garage” and get on a fast track

Start in Garage
Aug 25, 2017 · 5 min read

Written by @Nick Mitushin and @Angelika Blendstrup — August 28, 2017

In the next few weeks we’ll publish a series of blog posts showing insights we’ve acquired about building startups over the past years. We’ll share methods and tools you can apply to make your startup ideas grow. We’ve been able to build a knowledge base applied by startups from all around the world. They shared with us successful best practices and what steps they had to take to grow their business. How did this series come about?

We met a couple of years ago to talk about developing a new system to work with entrepreneurs in accelerators. We talked about startup metrics, how to understand if a startup has potential and if it’s worth taking into a program and working with.

It started with Angelika Blendstrup asking: “Nick, when we have actual startups coming in the future, what will I actually do with them?”

Nick: “Easy. First it’s necessary to understand what they are working on and where they want to be in the future to help them get started with the program. Because the program, in fact, has to be different for different startups. They are not all at the same stage and aren’t focused on the same type of product or customer”.

Angelika: “What kind of program would be the most helpful, give practical, useful help and not be a waste of time?”

Nick: “You know what, let’s create individual modules for startups and use them to retain all information about how startups execute and what worked and what hasn’t.”

Imagine, as an entrepreneur, you have access to a database of all startups from all around the world that has examples to help you execute typical challenges in the daily life of your startup.

Angelika: “What bothers me, as I’m planning a program, is that a lot of information that’s gathered in the accelerator sessions through the duration of the program, leaves the building the minute the program is over. There must be a way to retain and build on all that knowledge in our accelerator.”

Nick: “In fact, if you apply the modules to each of the startups, you collect information from everyone. From startups, but also from mentors and experts, and other batch members. Then the knowledge can’t walk away with each batch anymore, because it is captured in the modules.”

That’s how our work started. We created individual modules for startups and accelerators and with those modules, we went to Tel Aviv, Luxembourg, Singapore, Berlin and also worked with entrepreneurs in Silicon Valley. In all these countries and cities we captured the data of some of the best startups, which we put into a database. Some of these startups later on had the fortune to get into larger, very good accelerator programs like YC and 500 Startups and also get venture funding.

In this series of blog posts, we’ll tell you about the modules we’ve developed and how they helped startups, accelerators and corporations grow. We don’t want to attribute their success to working with us, but we certainly helped them keep their focus and execute towards their dreams.

We think accumulating all this knowledge and “wisdom” is one of the most important points of our work together. Startups have a place to go to if they are stuck— accumulated past experiences and knowledge — and they know that others have gone along the same path and succeeded.

We will discuss several modules we think are indispensable for startup growth. We’ll show you what’s inside some of these modules and tell you why we think individual steps and deliberations are important.


1st Module. How you know your startup is ready: 3 Key Stages of Startup Development

  • Discovery — when you’re working on your idea to create your Minimum Viable Product [MVP] and prove you’re creating value with your startup because you have paying customers or active users.
  • Test — You already have an MVP in place, therefore it’s time to understand how you start making profit with each user or customer.
  • Scale — this means positioning your company in the market, working on your demand creation strategy and growing your user base profitably.

As you can see from each stage — Discovery, Test and Scale - first it’s necessary to prove you’re creating something of value, then you make sure that your business model economics work and only when you have product-market fit are you ready to scale your startup into a mature company.


2nd Module. What kind of company are you creating?
To identify that, we use the acronym — SPACE.

SPACE stands for Supplier, Product, Average revenue per paying user, Customer and Evaluation.

We apply this model to help you understand your business, the audience you target and which stage of development you are in in building your startup.


3rd Module. How do you build a Unit Metrics table, which shows what steps your startup needs to take.

This simple metrics table is necessary to tide you over until you get the first investor.

The problem of startups is to know how to make money while developing the business at the same time. We show them which are the low hanging fruit to harvest and how to stay afloat.

Even if it’s a startup that runs inside a large company, it’s still very important to show quick wins to keep getting support from top managers.
The Unit Metrics table is like innovation accounting for large companies; it’s when you make estimates based on data and then execute ideas that have the most potential, instead of creating a large backlog full of feature requests.


We call the above modules “assessment modules”, because they help startups understand where they are in terms of their stage of development, product type, unit economics, business model type, etc and where they want to be. These modules help startups manage and optimize their to do lists, so they know the tasks they need to accomplish based on statistics of successful startups with similar characteristics.

When a startup comes in, we first identify their characteristics (stages, SPACEs, unit metrics, etc) and after that, we recommend low hanging fruit to pick; they can check this by looking in the database at what similar startups have done and what outcomes those have had. This is what the assessment procedure is about.

The second type of modules, which we haven’t touched on yet, are more operational modules which help startups get out into the real world;

Steve Blank calls this process “get out of the building”.

Here is when startup teams go meet their potential customers face to face, set up online user acquisition channels to get more leads, run pilot projects with corporations or recruit sales partners.

ABRT

Capitalizing Innovation Economy

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Start in Garage

Written by

ABRT

ABRT

Capitalizing Innovation Economy

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