Each one of the three key steps that I found most entrepreneurs miss when launching a startup is related to getting the customer or potential user involved at every stage of the business including what is known as the idea stage.
Startups fail because most entrepreneurs feel they have a solution in mind they’re looking to solve a problem with. Instead of building a solution for the customer, they look for customers to use their solution. The consequence of this inverse startup launch approach is deadly no matter the business model. In fact, according to CB Insights, half of the top reasons for startup failure are related to buyers whether it’s lack of market need, ignoring customers or building the wrong product.
Each one of the three key steps below that I found most entrepreneurs miss when launching a startup is related to getting the customer or potential user involved at every stage of the business including what is known as the idea stage. See if you’re missing any of those key steps.
1. Solving A Problem Before Building A Scalable Product
When entrepreneurs have an idea, it’s usually about a product that can potentially solve a problem. We’ve all enjoyed brainstorming the Uber for X, Facebook for Y and Craigslist for Z. This is the first mistake founders make as it pushes them into thinking where their product might fit instead of focusing on customers’ biggest challenges and the potential solutions that might address those needs.
The easiest way to verify if the proposed solution, even if approached incorrectly without talking to customers, is viable and indeed solves the identified problem is by solving the problem before building a scalable product.
This exercise forces the entrepreneur to carefully research customers’ problems and interact with key stakeholders as it requires physically serving the user. Let’s use an example. An entrepreneur may feel like building a coffee on demand app is the first stage in launching the startup for users to buy and order coffee. Instead of building the app, the entrepreneur is better off solving the problem by taking and delivering orders manually to get an opportunity to interact with the caller, gather feedback and learn if there’s a problem worth solving in the first place.
While many founders hesitate to randomly schedule customer interviews and while usually such interviews provide “what if” insights, doing a transaction with the buyer is a realistic and exciting way of conducting customer discovery and validation interviews. Best of all, you get paid.
2. Verifying That A Scalable Product Will Solve A Problem
Delaying product development and instead successfully getting hands dirty to solve customers’ problem before building a product doesn’t guarantee that a product whether it’s a web or mobile app or hardware will address their needs at scale. This is where a minimum viable product (MVP) is essential.
Another mistake founders make is rush into product development soon after validating a product and a customer through the first step above. This represents a risk as there is a significant difference in user experience between a manual delivery of the value proposition and a fully tech enabled solution. To mitigate this risk, entrepreneurs are better off launching a smaller version of this future advanced product.
Nowadays, anyone with any background can put together a product that may look like a million dollar platform on the outside but with very basic capabilities. Those products which are usually built with no code tools and minor customization are OK to use at this stage as long as they get customers’ job done.
The goal from those two stages is to gather as much quantitative and qualitative feedback as possible so that by the next stage, there is a clear direction with higher success predictability. In the example above, an app can be created to allow users to browse, order and pay for coffee. No sophisticated dashboards or algorithms are necessary at this point.
3. Selling Since Day One
Every software and hardware startup product is marketable since day one even with just a hypothesis. Preselling a product is one key step in the startup launch journey that most entrepreneurs skip. The customer is the most valuable funding channel and early sales signal validation and potential. The first step above will naturally lead to sales as it involves serving the customer. Skipping that first key step can have costly consequences later.
One of the most important determinants of sales in the early stages of a startup is relationship building with the customer or potential user. Early on, leads will usually commit not because the product will change their lives, but because they trust the founders to create the product they need. Therefore, they’re investing in the founders but if they don’t know them well enough, they won’t bother contributing to the release of the solution.
Founders should always be selling. However, sales, especially in the early days without a proven product, customer base and brand, is 80% relationship building and 20% offer. Some may argue that this distribution holds true for established businesses too. Therefore, take every opportunity to connect with leads and strangers, you never know the insights and outcomes that may come out of those meetings in the short and long run.
It can feel like the early stages of a startup are easy to follow because for many, most of the variables are internal and controllable like building an app or hiring a team. In reality, when it comes to products and customers, the only thing that’s under entrepreneurs’ control in the beginning is the first hypotheses they make based on experience and qualitative research. The rest should come from interacting with the customer.
I think you’d agree with me that it’s easier to get the answers to tough questions from those who will pay you instead of spending hours trying to come up with the guess that makes the most sense.
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