We gather words of wisdom from successful startup founders who recommend avoiding things that do not value-add to the experience of running a startup.
That is, the stuff that startup founders should not be wasting their time doing – and instead should focus on what brings in the cash.
Unless you’re a startup backed by reputable, cash-rich VC firms and investors, we recommend focusing your time, effort and budget on revenue-generating functions. (Bloomberg wrote an article on how many tech companies are burning through cash – dangerous pursuit!)
Do not be afraid of someone stealing your startup idea
If discussing your startup with outsiders could threaten the company’s viability, then you shouldn’t have the discussion (with or without an NDA).
In my experience, most first-time founders believe their idea falls into this category, but of all the startups I’ve ever consulted with, not a single one has ever had a concept that benefited from heightened discretion.
Still unsure about whether your idea necessitates stealth? Ask yourself if your concept is on par with any of the following examples:
- My company can successfully harness energy via cold fusion.
- My company found the cure for baldness.
- My company created the first teleportation machine.
If not, then heed this advice:
No one – not friends, fellow startup founders, investors, nor “the Internet” – will steal your idea.
You are not the first to think of your idea. But with a ton of hard work and a little luck, you might be the first to successfully execute your idea as a business.
So, if someone is willing to listen to you talk about your non-cold-fusion-based startup, put away that NDA and be thankful for the opportunity for feedback.
We have written in-depth about this in our article – What if someone steals my startup idea?
Scaling before product-market fit is probably the single most dangerous thing you can do while building a company.
Startup founders tend to get distracted by raising money before getting traction on their products. This traction would help you see if your product is fit for a certian market.
You might find early traction, but later on down the line, it’s going to bite you… Because all that growth was superficial.
You’ll get customers to try you out for a month or two and then they’ll fall off, and you won’t know why because your data is telling you otherwise.
“People love us.”
“Our conversion is high.”
The truth of the matter is… People naturally gravitate towards new and shiny objects. That’s why they’re game to try your product out.
But unless you’ve really solved your customer’s pain points and have built the solution into the product, they’re going to drop you like it’s hot.
The only thing that founders should focus on in the early stages is Customer Development.
Paul Graham put it best when he said, “Make something people want.”
And to do that you have got to get obsessed about the customer.
Well, how do you go about doing that?
Hop on a call and talk, one-to-one, with customers or even potential customers.
Surveys, polls, etc. are bull shit – if you really want to know your customers, you’ve got to have real conversations.
This sounds a lot easier than it really is.
Customer interviews are actually pretty tough. And like everything in life, there is a right and wrong approach to interviewing customers.
Here are three tips on how to conduct an effective interview:
#1 Know who you’re interviewing
Before you dive into your questions, get to know the person on the other end. This is going to help you organize your customers into segments each with different pains points, needs, and wants.
Most importantly, it’s going to help you, as a successful startup founder, to understand whether your product or vision for the product solves their painpoints.
#2 Get to know your customer’s pains
This is tough but a necessary skill as a startup founder.
We have a tendency to lead others to the problem. And by doing that, it’s going to skew your data…
You’ve got put yourself in “discovery” mode and ask open ended questions. Allow your customers to nuts and rant about their day and the bullshit they have to deal with.
The “bullshit” is exactly what you want to hear, and it reveals exactly what you need.
Your job is to ask the right questions that trigger an emotional response than all you need to do is sit back, shut up, and listen.
I personally record my conversations because I find it hard to listen and take notes. When I am interviewing a customer, I give them my undivided attention.
After the interview, I’ll listen to the recording and take notes.
#3 Offer a solution and see if it survives
The last thing to do is to test your solution.
Confirm the challenges and pain points that your customers are facing and walk them through what you believe is a solution.
If your solution survives this interaction, your customer or potential customer should want access to the product right away.
Either way, you’re going to learn a lot about your customers, what they want and what they don’t want.
Use data to evolve your product.
Last but not least, here are some things for startup founders to keep in mind while interviewing:
- Know your goals and have an objective
- Conduct interviews one at a time
- Record and take notes on everything, good or bad
- Be open to hearing things you don’t want to hear
- Ask open-ended questions, don’t lead
- Listen, don’t talk, let your customers rant
- Feature requests are bull-shit, drill down to the problem
- Look for patterns and group your customer segments
- Always end with an ask
Remember your objective is to find the “hair on fire” problem, not a “nice to have problem”.
With that said….
Focus on customer development, find product market fit, and then scale and scale hard.
Forget quantitative research.
95% confidence level in a survey tells you nothing.
People are strange animals….we say we would “definitely buy” something if the product or service were available, but then we never do when it does become available.
Do NOT build product until you’ve validated the idea
This is akin to saying “go straight to jail, do not pass go and do not collect $200”.
Building a product that nobody wants remains the biggest cause of startup failure. Go validate the idea first.
Do not raise money from outside investors until you really need to.
That means that until you have real proof of validated learning, then forget the seed round. Investment funding at an early stage tends to take the wind out of the entrepreneurial sails and you can become lazy very quick…
Forget trying to find a co-founder, unless you’ve known someone for a very, very, very long time.
Another reason for high business failure is the dysfunction in early stage teams. If there is a high failure rate in marriages, why would it not be any different with startup founders?
And besides, there’s enough evidence out there that startups can be run with just one founder.
That “one more cool extra feature”.
Too many startup founders focus on making their products best, without showing it to the real users and checking if they market assumptions are right.
This way, they often end up with the products that don’t have market-fit. Simply put: no one wants to use them because they don’t solve any real problem.
Or they do, but the majority of users have trouble recognizing it.
One common thing that most of the successful startup founders advise to do, is to gather feedback – as soon as possible, probably before you start the actual development of the product.
Reaching early adopters at the very beginning.
Early adopters want new solutions, they want to discover new ways of solving their problems, but… they don’t want to be the first ones to do it.
They need a proof that this new solution is worth trying. They are more likely to use a new product once they read about it on the blog they follow, or in some magazine.
Focusing on reaching early adopters at the early stage, instead of the innovators, usually is a waste of time.
Conferences are a waste of time.
This is true most obviously of local meet ups with other tech founders. Sure there are some good practices that could be shared, or an intro to be made, but be honest.
Large industry-specific conferences feel like must-attends.
But attendees of established conferences tend to be “late majority” tech buyers and not likely to take a chance on your product until you’re well out of start up stage.
Even if there are a lot of potential targets, being on a cacophonous convention floor, I don’t think generates enough sales to merit the distraction, travel & expense.
Most of the times, you’ll probably hear about other supposedly profitable Business Ideas and get distracted from your own startup.
Ever since Mint.com was successful a decade ago developing a personal finance tips blog to drive traffic, this idea has been frequently raised in meetings about marketing.
If you’re going to do it, you have to be committed and have an original voice.
Very few really are.
A listicle-or-two a week won’t come close. Blogs can be used to communicate product and company info, and of course generate leads for your business.
Overproduced 2 minute-ish videos about the product.
Can you ever recall one a week later? A month?
Hone in on a value proposition that can be shared easily by one prospective customer to another. No one ever shares a two minute intro video.
Investing in other startups.
It sends a terrible signal, and is probably an indication at some level that you’re not that into you.
Only do on the rarest of occasions and if you do don’t tout doing so or spend time “advising” the other startup(s).
You can’t scale your company if you keep your focus solely on raising money since the beginning.
I used to be one falling in this category years ago when i just started off with my 1st idea.
Social media used to influence me a lot and all i used to do was find ways to meet investors and waste their time by discussing just an idea.
Never late than ever, i learnt the lesson about how important it is to focus on raising money part at the right time.
During initial days, a founder ‘s sole focus should be on just 2 things:
- How this product can generate money.
Don’t waste majority of your time chasing a VC. You’ll receive red flags eventually.
Rest of the things comes later on when you pass the first stage of evaluation.
I can’t say about the whole startup team, but the startup founder at least should not lose grip over their existing customers.
I did this and I faced the outcomes eventually.
Your customers are the ones who:
- Will use your product/service
- Will give you money without asking you for your company equity.
You ignore your customer, you screw your business.
Don’t worry too much about how your product lacks the features, you planned for.
You start with a beta launch, then a pilot and then after several failed attempts you build something that’d be nowhere near to the image you’d have in your mind.
The key is to make goals and move accordingly. Don’t spend too much time and resources to add all your product features at once. You’ll fail.
So keep updated and read 10 Biggest Startup Challenges that An Entrepreneur Faces in 2019.