Rule 1: Start with vision and market knowledge
When my cofounders and I decided to jump off a cliff and pursue our startup, we needed a plan.
I met my co-founders Sambhav Galada and Allen Houng at Draper University, a startup school founded by the famous venture capitalist Tim Draper in San Mateo, California. We spent six weeks in the summer of 2013 learning how to turn ideas into valuable ventures. What was my idea? I wanted to use digital wearables to promote physical connections between people, sort of a combination of handshakes and electronic business cards. Sambhav and Allen shared the same vision of digital wearables that could bring people together, and we agreed this was our new path.
Our first test was Pitch Day at Draper University in August 2013. In order to be ready for this Silicon Valley challenge, we started scribbling and scheming, verbalizing all of our crazy ideas in an attempt to produce an exciting and compelling story.
Pitch Day came and went, and we survived.
Armed with useful feedback from the experience, we knew we had a realistic business idea, but the real work was only just beginning. We still needed to educate ourselves about the intricacies of the market, the technology, and the major pain points that our business could address.
For the next three months, we took every meeting offered to us and talked to anyone in Silicon Valley who knew anything about what we were attempting to do. We focused on building our knowledge and honing our skills, arming ourselves for the battle of starting a startup.
The next critical presentation appealed to investors at Draper Demo Day in November 2013. Unlike our initial pitch, we now had a clearly articulated story paired with a business plan and proof of concept. In those three short months between presentations, our vision gained traction and increased our advantage over the competition.
Our crazy idea was starting to seem less crazy and more realistic.
Next, we developed the following aspects of our expanding business plan:
1) Created a one-year, three-year and five-year key-messaging guide with words describing how our business proposition would evolve over time.
2) Added a market analysis, persona, their problem, and your solution to the plan. A persona is the ideal customer based on market research and intuition who you could build your business around.
3) Completed a study to validate the direction for the first minimum viable product (MVP) along with the unique selling proposition (USP). A minimum viable product is a product that includes essential features that makes it ready for feedback. A Unique Selling Proposition is what makes a product or business different from their competition.
4) Built a rudimentary “Wizard of Oz” prototype to justify the product as quickly as possible. Wizard of OZ is mythical product that feels and acts like it is real when in fact you are manually controlling the experience behind the scenes.
While the vision statement can always be evolving, it must start somewhere.
The initial version in our key-messaging guide looked like this:
“This business plan describes a wearable smart hardware device and software-as-a-service (SaaS) contact sharing and management product business dedicated to increasing the efficiency, timeliness, effectiveness, and intuitiveness of the information exchange and customer relationship management process. The plan projects a potential to transform this business into an intelligent, dynamic web and mobile service for the entire lifecycle of natural contact sharing and lead optimization between senders and recipients.”
I hope you enjoyed this preview to my new book Takeaways: Secret Truths from Leading a Startup. Don’t forget to subscribe to OWN IT to access the first ten rules.
Listen to my podcast for Rule 1: https://soundcloud.com/brian_friedman/takeaways-episode-1
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