Early stage 9+1 commandments

Something will be set in stone, always. Just keep in mind what you want and what you don’t want to set in the stone.

1 don’t focus in small % of a larger market — In essence, you want to avoid falling into a space of intense competition, specially because larger markets are nurtured by too many forces.

The broadness of complexity in communication to reach many kinds of customers, translates into high cost of acquisition. Some companies believe they can execute high cost acquisition as they have a theory or evidence of high retention or higher margins. Even if that is the case, you won’t have reason to be general about the kinds of customers because just slicing a big market is incredible naive.

2don’t ignore larger markets — While you don’t want to focus in a small part of a big market, it does not mean you can ignore the upstream market.

In fact, as you start learning about your initial segment, make sure you are working to understand about the lake or ocean that your river may lead to. Conquering the totality of smaller markets may bring you into the inevitable risk of confronting larger ones later.

3don’t push the wave, surf the wave — Specially if you are thinking in a big idea, make sure you are not planning on pushing the wave. Instead, your users should recognize the incoming wave — the conditions should be existent. They should feel why your special surf board is appropriate to that coming wave. More? check don’t pick a lousy market and a startup surfs an opportunity wave.

4 don’t trust all customers (or stakeholders) — Your job is not to acquire all customers, not when you start and not later. Instead, you should acquire the kinds of customers that will enlighten your way into a more successful condition.

Since you are well energetic and want to attract customers and since the world is full of people with all sorts of needs, you need to fear your capacity to execute the art of user acquisition exactly because execution is a key differentiator. You want to spoil your super execution skills and focus your energy towards the segment of customers that will give you leverage.

Therefore, the real art is in probing the future theory, to validate the right people and to get rid of the wrong customers. In case you are already running, make sure you keep checking your customers — and check also When the Competition Forces You to Find the Right Customers.

5 don’t assemble a board of directors — In the beginning, you may be at the condition of not knowing exactly where you are going, in terms of product-market fit. In this context, it’s important to understand the kinds of pressure that may come along with certain kinds of boards. Typical boards are much prepared to execute, which could push you into a quick path to the startup death.

You want a driving force that understands that you are yet searching for your best customers — item 4. In addition, your board-equivalent role needs to be specially tailored to not suck your time and able to offer insights of experience in terms of launching startups and in the industry.

If you don’t have it, nurture the equivalent of that through knowledge networks, clubs, or even books, such as what Brian suggested in Founders and Learning How to Learn.

6 don’t jump stages — don’t pitch a VC before pitching your mother, like I did. Don’t try to get VC money before it’s time to scale. It does not mean you cannot pitch or get money. Just make sure you go through the stages. Are there exceptions? sort of, these may well be the cases that can go quickly through all the stages, not bypassing.

Usually early money, such as from the founders, or such from angel partners that joins the team, are the kind of survival money that goes well during the early stage because it won’t cause strong financial penalties or generate a snow ball of new financial demands that ends up pushing the business outside a good track.

Not jumping stages should not be confused with lack of awareness about the idea, product, and market. As you focus in search and validation, you should have a strong theory (1,2,3) and do a Reality Check for your Idea, Product, and Business.

7 don’t hire cofounders. Founders need comply with Steve Blank’s rule that a founder is not a job, is a calling. With that, you need to make sure you know them as if you knew them for a decade. See Cofounder’s Relationship Strength and Cofounders relationships.

8don’t scale. This of course follows from Paul Graham’s famous Do Things That Don’t Scale essay. This is about knowing who are the users that love your product. And it’s about knowing a lot about their needs and how can they feel empowered as you deliver the product/tool/service. Check Challenging the Status Quo of a Product Market Fit for some good examples from Mozilla and LinkedIn. Also, see Nirav Tolia’s view for Unscalable Things Before Scalable Things.

9don’t spoil the culture. Culture is your company’s operating system. If you spoil your interfaces at the early stage, you will end up with a bad product in the future. As you unfold an opportunity, pay much attention to the special way you do things. See Culture is an Expression of What You and Your Team Want to Be.

10 don’t set any commandment in stone. No one should be naive enough to set anything in stone. Wait for my Founder’s Principle’s article — the preview is:

  • The Principle of Being a Learner
  • The Principle of The Rigorous Founder
  • The Principle of High Tolerance
  • The Principle of Seeking the Right Questions
  • The Conscious Business Principle
  • The Super Fast Principle
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