6 Steps To Creating A Startup With Low Failure Risk
Bad news — there isn’t a proven math & science behind creating a successful startup venture.
Good news — I listed below some of steps that successful startup founders took before they launched their first product. They are not all required. However, the more of the steps you take, the lower risk will your business have to fail.
In other words; 6 steps before you launch your product:
- Competitor research (20% better than alternative)
If you have competitors, that’s not necessarily a bad thing. It’s a solid proof that your market has been validated in a way. But that’s when you have to think “how can I make my solution 20% better than my best alternative?”
Before ‘Emre Kabakci’, started his startup Rakam.io (custom analytics platform) — he looked into most of his competitors. He not only tested them thoroughly but also looked into Quora posts about his competitors.
His assumption lied on a very simple logic — if 2 out of 10 people complained about a certain analytics platform because of a similar reason, he could make his analytics solution 20% better than his competitor !
2. Problem validation through customer development
Surveys can lie! At the same time, they also help us understand problems of your target customers, when communicated to right people.
Emre Semercioglu, founder of Localguddy (a local travel platform), surveyed his potential customers. He asked “would you have used my product if I did x and y better”. He received a good portion of positive responses that showed him the potential of his market.
My suggestions on the topic:
- Make sure you set an assumption and test it through a survey or communicate it with potential user groups
- Ask about their problems & needs
3. Revenue test via customer focus groups
I consider this part the most critical stage of a startup. You have to be very realistic with yourself about how willing your customers are to pay.
Scorp founders, Izzet and Sercan, convinced thousands of students to get the word out about their mobile application even before development of the app has started. In addition, with this demand of users on their hands, they spoke with potential customers and asked them if they would pay to advertise on their platform.
When they were convinced that customers would be willing to pay, they started building Scorp.
4. Market size via research
LALA is an education based startup. As you may or not know, it is a very complicated market. LALA founders not only had to validate problem statement and their revenue potential, but also had to understand their target market size.
Through online and offline research they found that the market is big enough for them to enter. As a next step, they had to find out which portion of the market they can capture and scale. Finally, they were motivated to start!
5. Lean canvas
With lean canvas, you challenge not just your business, but also yourself on how much you know about your industry. Steps 1 to 4 should help you complete your Lean Canvas in a more meaningful way. Ah — almost forgot to mention— lean canvas is a modern version of a business plan.
Here is successful lean canvas by friend Ugur Civi (one of the co-founders of Kolay Randevu). He filled in attached Kolay Randevu Lean Canvas before he launched into the market. From his document, you can see how much knowledge he has gathered before he launched his startup.
6. MVP
Minimum viable product is a result of all the hard work you have put into your research and planning. If you did understand your customers well, you will be able to know what is most painful to them. And if you understood their pain points, you will know how to solve them.
At Influanza, it took us 3 month to get from step 1 to 5. I recommend being patient. I promise, it will pay off in the future. We have repeatedly heard from customers “how good our segmentation” is. That’s just a good sign about your product-market fit.
BONUS: I would encourage you to think about “what is the most embarrassing effort you would do to bring your startup to a successful stage”. If the answer isn’t too convincing, wait for another idea to challenge yourself with.
Feel free to reach out to me, if you have any related questions. Also feel free to follow, if you like to see new articles from me.
Thank you for reading!
With Best Regards,
Sercan Lir
Co-founder @Influanza
