Success is never luck with startups, but a combination of getting many things right over a longer period of time. It is far more likely to screw things up than succeed and the best cure against failure is knowing what you’re actually doing. Successful startup management can be presented in five iterative steps:
1. Find a monetizable problem
You might have the best idea ever in your mind right now, but the best advice to give is stop right there. Customers don’t pay for ideas or cool things, they pay for solving a pain, problem or want better than anyone out there. This requires that you understand a particular customers needs in a superior way and design a simple and unique enough solution to create customer pull.
2. Find enough customers with the same problem
Defining (or worst, building) a solution without knowing enough customers first hand with an identical need will most likely result in something that’s not really directed at anybody. Even if you think you know the customer and the market, none of us really know customers future needs. Customer development has to be done before product or company building otherwise your success relies mostly on luck.
3. Launch and start testing alternative customer acquisition models
Finding a few customers is no proof of a scalable business model. Sales must be driven faster than two legs can run and having a scalable blueprint for acquiring customers is really the single most decisive part of building a successful startup. Start testing and optimizing different acquisition models early as this might well be the single most time consuming and risky part of the whole project.
4. Define and validate minimum value to customer
The biggest risk for startups is to build something no one wants. Digitization only increases that risk as it’s so easy to build almost anything these days. The question today is therefore not can we build it but should we build it. Not knowing the minimum viable (customers willing to pay) feature set exponentially increases the risk of building something that doesn’t match a clear market need making it impossible to succeed with the startup.
5. Build the MVP and nail your engine of growth
You should only start building when you know exactly what you’re building, to whom and how to successfully acquire customers. But even when a product matches a market and sales seems relatively easy, growing a business is no easy and cheap task. To grow you must invest in growth and having tested different customer acquisition models will help prevent throwing money at things that don’t pay off. Growth can be hacked but only if you’ve done your homework all along.
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For more info contact: ola(at)hub13.fi, 040-549 47 55 or Maria Averina at Haaga-Helia Startup School
Ps. Haaga-Helia students get 3 credits for participating!