5 steps to maximizing your odds of startup success
I’ve built businesses and failed.
I wanted to build a business to make healthcare more transparent. Two years into development, I figured it was too difficult for two college students to tackle.
I wanted to make it incredibly simple for social media influencers to design and sell their own products, but traction was stagnant.
I wanted to build a digital agency, a SaaS platform, a cryptocurrency recommendation engine, a personal life dashboard and a yoga studio analytics platform.
Being the CEO & Founder of a successful company has always been appealing to me because despite the sweet title of “Chief Executive Officer”, it means my career north star is to bring value to humanity.
Entrepreneurship is awesome for this very reason. Everything around us started with an idea by an entrepreneur. This laptop I’m typing on, Medium, my iPhone, even my socks. Some of the founders of these are called “CEO”, others not, but one thing is for certain: the fact that I’m using it means I derive value from their idea.
The startup graveyard is littered with failed ideas.
So how do you ensure your idea steers very far away from this startup graveyard? With so many failures under my belt, I think I’m in a good position to compile the lessons learned into a systematic guide for maximizing success.
This is going to be blunt and some may even say rude. You’ve been warned.
1. Start with an audience
You need users, right? So why are you building your idea before you have a single user signup or anyone that said they would even use it. Neither of these are enough to continue past this step, but it’s important to note: always start with an audience, they are your north star.
Arguably the best approach to building an audience is to provide free value (e.g. what I’m doing here 😉). This free value can take the form of medium articles, running a workshop or a class, writing an ebook, etc. I’ve done all of these and am happy to share best practices.
This serves two purposes:
- It helps you build an audience via engagement, subscribers, followers, etc.
- It is the very bare minimal investment you can commit your resources to in order to determine what really jives with your user base.
Let’s take an example. Suppose I want to build a yoga studio analytics dashboard (real life example and I wish I applied this). It’s in my best interest to write about “how to find your best yogis”, or “how to maximize your instructors time”. This way I can test different content to determine what my end users, the yoga studios, truly care about.
So providing free value in the form of content & information is one thing, another is to look in a place where people are already spending money. Shopify, Squarespace and Salesforce are all good examples (ignore that they all start with “S”). Go into these products’ forums and learn what their most active user base is complaining about. This is a goldmine! They are telling you their problems. Engage with them.
You can even cold message small businesses. But do so in a way that conveys curiosity NOT sales. An example cold email can be:
My name is Ethan and I’m researching the Yoga studio industry. I’d love to learn about some of the pains with running a successful studio. Do you have 15 minutes to chat? I’m not selling anything as I don’t have anything to sell, just looking to learn.
We’ll review some strategies to uncovering the deepest problems once you have a potential user to talk to.
Don’t however go to step #2 until you have at least one user that identifies with a consistent pain.
2. Define the problem
Ok, so I’m assuming you have at least one (ideally a group) of people that identify with some overarching pain. Maybe it’s that Salesforce doesn’t integrate well with Stripe or Shopify doesn’t have a google maps plugin. These are high level, and we’ll discuss how to dive into them.
I like to always have these next conversations in person or on the phone as it allows more extended responses. You’re welcome to do so via email or IM but it will be challenging.
Some questions to ask include:
- What recent projects seem to be consuming the most mental energy for you?
- Can you walk me through the first couple hours of your work day?
- What are the things that you love to do? When are you in flow?
Here’s my absolute favorite and magical question:
- What would you wave a magic wand at to make disappear?
Key with all of these questions is to always probe deeper. Ask “Why” and “Tell me more”.
You need to become an expert on the problem and really understand the context. Learn about what brought them to experience this problem and why.
The reason the title of this step is “Define THE problem” is because you’re only looking to uncover one deep and burning itch. Anything more and you’re stretching yourself thin.
What I’ve found with the most successful conversations is they’ll email me later and say “hey did you solve this yet?”. Nothing is better than that.
3. Validate some solutions
Alright so let’s assume you had these conversations with the users and you’re ready to come up with a solution. Put your brainstorming to the test. Heck, you can even ask your user base how they’d like these problems solved.
Think you have a solution? It’s time to gauge the interest from your audience.
You can do this in a ton of different ways, but for the sake of simplicity we’ll stick to a simple Google survey. Send them an email like below:
We’re hard at work figuring out how to solve the problem of XYZ, and we really want your input. I made a quick survey to get a sense of which solution best addresses your problem.
I’d really appreciate if you could answer this survey so we can make sure we’re addressing your needs.
In the survey, simply include a list of options that you brainstormed.
Extra Credit: Ask if they’d pay for it.
Everyone is a people pleaser. The moment you ask for cold hard cash, it becomes a real conversation and they may say “well I don’t neeed that”. Time to move on to the next solution.
The reason this step is “Validate some solutions” is because this is a an iterative journey, and you likely won’t find the golden ticket in just one round. As you continue and iterate, you’ll get closer to what’s called “product market fit” or something that truly solves that deep pain.
There are plenty of methods to both brainstorm and validate, if you want more, just comment below.
4. Build some prototypes
We want to minimize the amount of time it takes for us to yield as much learning as possible from our “experiments”. This requires us to start with as low fidelity prototypes and mockups as possible. This could mean construction paper, or a couple pictures like below:
Bring these prototypes to those users we identified earlier. We want them to emulate the experience of what the solution would be.
Again, this section, we say “some” prototypes because this is a cycle and the key is the “fail fast” in your pursuit of building a prototype that solves the problem in the best way.
Take the key findings from each of these “emulations” and compile the feedback. From this feedback, synthesize some features and prioritize them by asking your users: which feature is most valuable?
Continuously strip away features until it’s in a truly minimal valuable state, because remember we want the “version one” product to include only features that make our users nervous if we removed.
5. Refine and scale
So you have a list of features in order of priority and you have a user base that is super eager to get it in their hands. You have several options regarding development:
- Crowdfund. Assuming some of your users are businesses, this solution directly correlates to an increase in their ROI. Figuring out a price point is easy once you quantify the value they get from your solution. Ask them this simple question: “if you pay $X, we’ll let you use it free for life”. Ask a bunch of people this and you have a funding source.
- Venture Capital. If it’s super clear that you’re on to something here and you can share the work you did to both validate the concept and identify product market fit then build a pitch deck and send it to some VCs.
- Self-Fund. Get a pricing estimate from a developer or firm and fund it yourself. This approach expanded in the very bottom.
- Build the software on your own. Always an option…
Once you have some sort of funding source, it’s time to develop version one of either the prototype or minimal viable product.
So the biggest takeaway you should have here are two things:
- You don’t need to be a technology wizard or even understand how software works to be successful in this process
- You do however need to put yourself out there and become an expert in understanding the problem while being solution agnostic. Who cares how the solution works as long as it solves that deep problem your users have.
So get started, build an audience, find some problems and test your solutions. I want to hear about some of your successes, failures and lessons learned by commenting below.
Shameless self promotion:
We started VirtueTheory.com to guide founders, companies, and teams in their product development journey. We apply the above tactics and industry best practices to build a prototype and scale it, maximizing your odds of success.