Market-fit, Network, Skill & Product

The holy grail of startup success

The Story
I have been a “serial entrepreneur” for the past 6 years. I have successfully exited about six startups, but unlike the typical perception of the serial entrepreneur, I only left with improved skills and experience. With little mentorship and rabid enthusiasm, my fanciful imagination garnered up numerous ideas in practically every field of study from medicine to marketing. Myself and my partner in crime even created a company called Exterbox which was aimed at creating “out of the box” ideas. The best we got out of it was client work and improved web design skills. Mostly service based revenue, nothing from our product or business ideas.

Learning the hard way
Looking back at these early attempts, I see where mentorship would have played a significant role for better success. We did try, but most of it came from self-help success books that were not written for the modern tech-entrepreneur. So we endured six toiling years of brute force product development, with marginal and incremental improvements between attempts. We soon separated because of marriage and migration which triggered a pause in my product generation cycle.

Reflections of a serial failure
The pause (and marriage) allowed me to start thinking about how to be a more efficient product designer. I had to now explain to my wife why I was up late working on CoolProduct 2.0 and how it will contribute to the rent. So instead of imagining the product today and starting to code tomorrow I decided that my next idea would have to be critiqued and vetted by the people whose opinion I valued the most and those who had experience in business and tech. So as luck would have it, a new “world changing and disruptive” idea sprung into my head. So as planned to do, I wrote it down in a Google doc and invited all and sundry to throw in their opinion.

The profile of a successful founder
Along with the validation from my peers, I decided to get even more indirect mentorship from my extended and remote peers, the successful founders on the Internet. I surmised that they would have the most contextual advice I would need. So I went on a learning binge, consuming entrepreneurial, business and tech articles at the rate of about 600 articles per month. This did not include hours of podcasts and video interviews of founders and the experiences they had. My brain inadvertently started to try and process the profile of a successful founder. They all had different backgrounds, some were ex-Google and ex-Twitter employees living in San Francisco and others were Mr. and Ms. Nobody from Nowhere City. They all however had a few distinct similarities, and from my diverse reading, many authors spoke about the traits in one form or the other.

The Four Necessary Tools for Success

From my research and experience, I have narrowed down the four necessary tools that I believe are critical for startup success. I am yet to practically prove them all but I am certain that they were not all utilised in full during my serial failures and I have seen marginal success using a few of them in isolation. I will also attempt to rank them in terms of importance, which should define where you should place most of your energies. For some people they would have already mastered a few already, so focus on the ones you are weakest at. These four areas are: Market-fit, Network, Skill and Product in that order. There is a fifth externality that influences all of the above and that is marketing, but we will address that a bit later.

Product
A great product is the determining differentiator when you are competing in an environment where there are entities with relatively equal skill and connections vying for the same market. This is where the battles occur in more mature markets. Most of the effort is now focused on the experience of the end-user because the results are percolated and allow you to improve all aspects synchronously. By improving the product, you could see an improvement in the number of users thereby increasing revenue. With the extra revenue you can hire a more talented team.
To improve your product, it requires the time and effort of a skilled team who is aware of the market needs through interaction. Communication is critical because there is danger in both an abundance or dearth of product capability.

Skill
To create a successful product, you need to possess the requisite skills. Fortunately, not all of these skills need to be possessed by one person. These skills can even exist outside of your team. It is however critical that they do exist because product quality usually hinges on the expertise of you or your team and the skills you have access to.
Improving skill is a never-ending process, there is no zenith for learning. You should always have a to-do list for learning something new while having work-in-progress on an existing skill.

Network
Your network is the conduit by which you will share your product. The size and strength of your network will determine if news about your product will be a trickle or a gushing stream. Size alone is not an indicator of network strength, similarly how a large pipe does not determine water pressure. The strength of your network is directly proportional to their confidence in you which may or may not necessarily be related to your product.
To improve your network, you need to develop your reputation as someone who consistently delivers quality. Your particular area of expertise will dictate how that quality is determined and measured.

Market-fit
The importance of market fit cannot be adequately overstated. If a customer is in need of, or can be convinced that she needs a product, then you have already won half the battle (insert quote about selling sand in a desert). A market attracts product innovation because the environment is fertile for growth. There are more stories about well connected people with million dollar budgets, skilled workers and an amazing product who fail at breaking into a market than those with the market.
To determine market fit, do surveys, prototypes, and other inexpensive tests and measure feedback. Apply the fail-fast concept, but if you are failing too often then you need to reconsider your product or business model.

Marketing
Marketing is a mystical tool that can affect every aspect of this approach. If done well, it has the ability to create the market, attract a larger and stronger network, attract skill and romanticise a product (see Apple Inc.).

Conclusion
Whether you have a product or business idea you are working on, or you have the next game changing idea in your head. Measure it up against the four principle of Market-fit, Network, Skill and Product before you go off building experience the hard way.

This blog post is the seminal publication of the blog “Third World Entrepreneur” by Rohan Anthony Smith @frazras