“If you are confused about: what your Product is, who your Customers are, how to Reach them & how to make $$$, read this Post on how to Launch.”
Launch Topics: simple Idea, Passion, Kill your Idea, Secret Sauce, Customer, Sharing your idea, Market Niche, BiG Market, One Revenue Stream, Few Steps to Revenue
Even though it’s trendy in startups to say that Ideas mean nothing and Execution means everything. The reality is much less binary and much more nuanced. For example, even the world’s best entrepreneur with incredible execution will fail, if their idea is fundamentally flawed, or if their market is too small. This list of 10 rules put together by the Founder Institute aims to provide a great starting point for people who want to evaluate their startup ideas at the first stage. What we have found that if an early-stage founder can conquer the 10 items below, they have a solid foundation by which to start a company. You are absolutely not assured success if you can accomplish these items (nor are you assured failure if you can’t), but your chances of success are much, much higher if you can.
1. Your Idea is simple and easy to understand. “Think big” is a common mantra for entrepreneurs. And it is true – every entrepreneur should think big, because in most cases, starting a company with small ambitions can be just as much work as one with big ambitions. Big ideas are raised, not born, and they are most often raised by simple pain points. For example, Mark Zuckerberg didn’t wake up one morning and say, “I’m am going to create the greatest Social Media site.” Instead, he set out to build a simple utility for Harvard students to see who was in their classes. All the great businesses of our time have started with an incredibly simple idea, and then expanded upon that. If you can start by solving one problem, with one product, for one customer, you will be sufficiently focused and can have a great foundation for success to sell one or products to many customers.
2. You are a Passionate about your Idea. Money is no substitute for passion, so every entrepreneurial journey should start with a passion. In fact, every aspiring Founder who comes into the Founder Institute with a goal to just “flip” their company is advised to drop out during the first week for a full refund. There are two reasons for this;
1) In order to power through the hard times of being an entrepreneur, founders need to be working on ideas that they can see themselves still working on in 3, 5, 10, years. If you don’t have passion, your chances of seeing a project through are minimal.
2) Other people will easily be able to see through your lack of passion, like customers, investors, &the press. For example, investors are typically concerned more about the “why you”, then they are about the “why” of your idea.
3. You have tried to Kill your Idea. It is very easy to fall in love with your idea – after all, it’s your baby, and almost nobody will tell you your baby is ugly. Positive reinforcements are very easy to find. Your goal in the idea stage is to try to find the things that make your idea bad. Try to kill your idea, and then, one-by-one, iterate and eliminate the negative aspects of the idea. The result will be a much more defensible foundation by which to start
4. Have an original Secret Sauce. Every great business has a Secret Sauce. Not every company starts out with that Secret Sauce, but building a company without a plan for how you will differentiate and win from the outset is a waste of your time & $$$. Also, your Secret Sauce needs to be original. If it’s obvious, that is almost always a bad sign. The best ideas have a Secret Sauce that is transformational, not incremental. What secret do you know that will help you win?
5. Get to know the Customer well. You need to understand very clearly who you are helping, what exactly they need, why they need it, how they would be willing to solve their problem, what they spend their money on, what goals they have in life. A common mistake we encounter is that people don’t go nearly deep enough in their customer profile. For example, many people will stop at “I am helping large companies hire.” In reality, they need to be able to say something like; “I am helping senior hiring managers at enterprise SW companies in the USA with 400-800 employees. They are typically female, age 29-34, making an average of $58,000/ year. They report to the company HR lead, and their Key Performance Indicators [KPIs] are X, Y, & Z, measured quarterly. They spend the majority of their day doing A, B, & C, and the best way to them hitting their KPIs include X, Y, & Z. Currently they are using products from companies A, B, & C, but those products don’t allow them to do these three critical things.”
6. You are “sharing” your Idea. Nobody is going to steal your idea. Think about it – do you really think your idea is so great, so original, that somebody who hears it is going to go home, quit their job, and devote their entire lives to it? And be successful? The chances are near zero. Also, how can they duplicate what you didn’t tell them about your product? You need to be pitching your idea to anybody who will listen, and integrating all the feedback you receive into improving the idea. Feedback is an entrepreneur’s best friend, and Silicon Valley entrepreneurs understand this better than anybody else. For example, on any given night, you can find 20 different events in Silicon Valley where people are openly sharing their ideas, and it is this collaborative, teamwork-oriented culture that leads to the great innovation there.
7. You know the Market Niche. In almost all cases, there are several people already devoting their lives to your idea. In order to win, you need to engulf yourself into your market in order to have the requisite insight & vision needed to win. You need to devote a lot of time to your market to get this insight – whether by working in the market, living the problem (ex. being a Social Media addict who then starts a Social Media company), and/or devoting that time towards research. If you are not an expert on your market, then it’s time to get to work. There are no shortcuts.
8. Sufficiently large Market for good Revenue. Large & fast growing markets have the power to pull average companies into greatness, and conversely, dying markets can pull otherwise solid companies into the grave. If you are going to devote your life to an idea, the market where you operate better be big enough (and/or growing at such a fast rate) to support a meaningful & enduring company. Any market with less than 10 million people or multiple $B in annual revenue that is not growing at a very fast rate will be very hard to address, and is probably not worth your time.
9. You have One Revenue Stream. For some reason, the majority of early-stage entrepreneurs think that the more streams of revenue their idea can support, the better. In the early stage, you need to be laser-focused on one (1) revenue stream, and your idea needs to have a clear, singular revenue stream that can conceivably be large enough to support the entire business. If not, then its time to go back to the drawing board. Also, it’s a common mis-conception that companies who focused on early user growth (ex. Google) didn’t have a revenue model in mind when they started. In reality, these businesses saw incredible early traction, and then the founders made a tactical decision to shift their focus to growth. Can someone build a great company with a zero (0) revenue mentality from the outset? Sure. But building a business with no revenue stream in the hopes of becoming the next Social Media super-star is like buying a Lottery ticket.
10. only a Few Steps to Revenue. The more steps there are to revenue, the more complex an idea is to build & execute. This is a very important step during the idea development process: what are the things that need to happen before you make a $?$. If you have to provide a service in order to collect data – that will then be sold to advertisers, for example, you have a very complex business. That would be 5+ steps to revenue. Try to limit the number of steps to revenue to around three from the beginning – if you can.
Comments: Do you know any other Rules for Launching a Startup?
from Huff Post.com 4/18 enhanced by Peter/CXO Wiz4.biz
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