A pragmatic guide on how to build a startup
Ideate, build then Scale.
While it's often easy to identify certain needs in a market segment, it’s not easy to build a solution that completely obliterates its problems.
The journey to starting and running a startup can be unforgiving, to say the least.
Over the past few months, I have been reading countless books and articles on startups, their business models, and customer retention strategies, and a few things stuck with me. There is a rule of thumb when it comes to startups, a strategy you might call it, and this is my pragmatic attempt to break it down into a few simple steps.
This is where you got your aha moment. A disruptive idea designed to change the world by effecting change. While it's all fun and games, this is where most startup founders fail. I’d propose less excitement about an idea. Get brutal critics, they might give you positive or negative criticism that’ll help you get a level-headed thought to your idea.
Customer Need Proposition vs Value Proposition
VP is a common term in board rooms, VC meetings, and startup forums though very less is talked about customer need proposition. So what is this?
CNP is a measure of how big a need the customer has for a said solution. Instead of focusing on VP (Every Startup tries to have this), focus on CNP. You might have realized a need in the market that might be there but has insignificant rewards to your target audience if solved.
Try to find a need that has not been met or partially met and has a significant ROI for both your customer and business if met. Good luck with that.
After you figured out from market research that your product solves a significant unmet need, it's time for you to assemble a team. Do your research on who you need to build the product without giving much detail to your distribution and sales channels at first. Remember you haven’t attained product-market fit (PMF) so it is highly unlikely you’d need sales or marketing skills in your team. The idea is to stay lean and conserve as much runway as you can before PMF is attained.
With a development team, it then becomes very easy to build your minimum viable product. The idea here is to have the core product USPs that have high user stickiness (retention). Build and test out these features internally or within a controlled test environment.
GTM (Go To Market Strategy)
In the Lean Startup book by Eric Ries, he mentions market validation and how you shouldn’t delay it. Why? It often leads to early PMF attainment, saving burn, and reducing churn. While GTM sounds more like a marketing strategy it's really not. MOVE (Marketing, Operations, Velocity, and Expansion) written by Bryan Brown and Sangram Vajre shows how marketing, sales, and customer success teams play a part in acquiring, converting, and retaining customers. The book proceeds to show how GTM is an iterative process that always ensures customer success by focusing more on customer retention vs acquisition.
A good GTM strategy contains measurable OKRs that all lead to customer success.
Scale and Retention
This is the longest part of a company’s lifetime.
At this stage, you have a product that people love and a retention plan. Your next task is to improve your service offerings while looking out for your competitors. It's highly likely that other people notice how well your startup is doing and are creating clones. Always innovate. More like what Snapchat did with user stories.
Invest heavily in R&D, talk to your customers and create brand champions among them creating more of a cult mindset within them.
Great! You’ve reached this far. Your company achieved a height greater or almost as much as what you wanted but the vision of the company has started the shift away from what you originally thought it to be. It just might be time for you to exit. This is where companies file an IPO or better yet founders sell their company.
At this point, it really depends on what you want to do.
While this approach is subjectively hard, it proves to be the bare-bones approach to building and running startups. Ideate, build then scale while looking out for the many existing pitfalls.
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