Do you have a briliant idea for a startup in mind? Avoid these common mistakes: (part 2)
In my last article I covered first four mistakes which are very common for entry level entrepreneurs starting their first own startup. These mistakes were common for my clients or even my own.
“I think my customers will love my product”
While talking about your product don’t ever use the word “think”. Investors, entrepreneurs, partners, they all want to hear facts from you. Let’s say you want to manufacture lighter, faster and smarter bikes. Before you can even think about mass production you need to raise some money. Before anybody will even think about giving you some of them, they will need some proof it’s a good investment- your personal opinion or what you think doesn’t really matter in that moment. So grab your prototype, go to the streets, let people try it, focus on your target group, collect some quantitative and qualitative feedback to make your statements in front of investors bulletproof. That’s the way how you start with a market research.
“We have a better copy of a successful product from different country/market, our salesmen are doing really good job but still we don’t sell enough”
Language, culture, geographical position, consumer’s power, competition, laws etc… It is not just about copying something what works somewhere else. It is about considering Product/market fit in your target country and shape your product until you reach it. A perfect Product/market fit could be described as a state when you are no more able to produce/serve all your new customers without hiring more and more staff, your profit is bigger than your investment into marketing and your startup is all over the press.
“Our service will beat any other competition in every aspect from version 1.0”
It is very common when startupers are dreaming big, trying to make a best possible product but forgetting about earning money, doing actual business. A startup has to, like any other company, produce money and that won’t happen if you will be trying to beat your competition in every aspect from day 1. You need to identify the biggest pains the clients using your competitor’s product are having right now and focus to solve them while keeping another very basic features around. This is called MVP (Minimum Viable Product) or a product which has a set of minimum features so it can be usable, competitive and unique. Thanks to MVP you can save time, money, human resources and generate your first revenue as soon as possible.
“I will earn money thanks to ads in my mobile application”
Yes, it is possible but not very effective. If you want to think big, you need to have a briliant business model in mind. A business model in short is a way how you will get your product to your customers, how will you charge them and how will you keep them happy. A good business model has to be beneficiary for both sides — a provider and a customer. It has to be also realistic, predictable and it should be straightforward. An example of a business model could be your Netflix subscription, your iPhone’s expensive extra accessories or Facebook’s person oriented ads. You can always come up with a new business model or just reuse a working one-whichever works best for your product.
In this article we have mentioned it is very necessary to have facts instead of beliefs, we should shape our product until we reach Product/market fit to succeed, we have to identify our product’s MVP and come up with the best business model for it.
If you have any own experiences, questions or comments please feel free to use the comment section below. If you need some help with your own startup feel free to reach me here https://vladimirelias.com/.
