Don't be like me, don't learn it the hard way.
“A journey of a thousand miles starts with one step”.
This old-age saying serves as an encouragement to abstract away the complexity of a journey and motivates you to start, but as we’ve come to see from a practical point, this way of looking at any goal in life is ludicrous, to say the least.
What if your first step leads you to a ditch?
What if, unfortunately, you break your leg from that fall and ruin your journey in its infancy?
About the 10x rule by Grant Cardone, for you to attain any goal in life you need to understand the complexities of achieving it so you know what to expect, and in turn, correctly estimate the resources necessary to achieve it.
Failure to do this sets you up for failure.
But what if the goal is building a successful startup?
All founders, the ones who fail or succeed, agree on one thing. The nature of any startup journey is nonlinear, it's filled will uncertainties from market assumptions that are mostly wrong, and the imminent risk of burning away your cash reserves before breaking even, among others.
The goal post shifts every too often and thus, unlike goals such as reading x articles a day, building muscle, or securing a well-paying job (all of which have predefined steps to success), the startup’s case is different.
This article attempts to make sense amidst the chaos by highlighting what pitfalls to avoid in your startup journey.
Getting the first step right
Like Grant Cardone’s 10x rule states, startup founders need not understand what to do (this happens during the lifecycle of a startup) but understand what not to do.
As counterintuitive as the statement sounds, startups mostly don't know what to do, experimentation, customer feedback, and continuous tuning of the original idea do.
So what should a startup founder avoid to increase the chances of success and mitigate the chances of failure?
Building before market validation
While in a bid to bring an idea to fruition, startup founders rush to build MVPs that later flop due to understandable levels of consumer apathy towards the product.
If you are going to build a product for me to use, at least, attempt to find out what I care about, and what my most pressing needs are. Never impose personal beliefs or assumptions on customers.
That 99% of the time never works.
Instead, dedicate a reasonable amount of time to learning your market segment, finding smart ways to get insights into how your average consumer thinks and ways to make their lives even better.
You can read more on why this is important in my article above.
Building in Silos
Assuming you have come up with a brilliant and cost-effective framework for getting qualitative market insights, it is time to build a product to address its needs.
But wait, is it that simple?
Well, I’d be glad to say yes, but what you've done so far is building a solid foundation, a data-driven approach to customer satisfaction. You must avoid one problem though.
Do not attempt to address all consumer problems from market insights. This will only slow you down while further burning cash reserves. You want to index market problems in order of priority and address a few problems to elicit interest among early adopters.
This will in turn give you more data to work with in future product development iterations bringing you closer to a successful start.
Getting your financials wrong
A startup's probability to succeed is tied to its ability to hang in there before achieving product-market fit, this is in turn determined by one thing, how much cash is in the bank and how many months it can take you.
In a bid to balance P&L, founders need to understand basic accounting, from operating expenses (OPEX), average consumer contracts and their lifetime values, and acquisition costs.
It's not just enough to understand a business model, it's important if not extremely important to understand your unit economics and burn rate, this will, in turn, help you avoid undesirable surprises.
Talking about finances, let me throw in one more thing to avoid for equal measure.
Avoid thinking of investor money as an assurance of success. If the right levels of growth and market understanding haven't been achieved, for the average startup, I strongly advise against investor money. It does more harm than good for early-stage startups.
To recap, to achieve startup success, focus on customer success or attain an understanding of it while staying afloat long enough to get it right.
Trust me, If you are building products consumers love and keep loving, no amount of investor money or competition can rival that.
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Until next time. Happy reading! 😀
