As the world reels in the wake of COVID-19 pandemic and everyone adjusts to the ‘new normal’ of working from home (hopefully not long, might also be a systematic change), quite a few friends have reached out wanting tips on how to explore their startup ideas they’ve put on the back-burner.
Unfortunately, many industries will slow down or event shut down as a result of restrictions so encouraging people to think entrepreneurially, try new things and adapt is pretty important. Anything that helps someone start a new and valuable business that otherwise wouldn’t exist I think is a good outcome and how I can pretty easily add value.
What follows is my recommendations for anyone exploring a potential startup idea and presumes you have no prior existing startup knowledge or experience.
These recommendations were originally part of an interview for the Startup OnRamp Founder’s Course, a new online course for professionals looking to take the plunge into starting their own venture.
Learn how to have a discussion with your potential customers
This goes part and parcel with the next two recommendations and is a skillset that the founders need to build themselves. No one can do it for you. It’s a skillset you learn through trial and error.
If you have the money and resources its very tempting to hire someone and try and delegate this work, e.g. a business development person, but it doesn’t work if you want control over your product and company direction. Why? Because you’re relying on someone else’s interpretation of the problem and potential solution required. That is bad for a startup.
- You need to be able to see (or listen) your customers responses to your questions: how they feel about the problem; what frustrates them; what new things have they tried and what else are you missing? These extra bits of information in an interview can be gold for your product direction.
- Some of the people you chat to may very well become part of your first 10 customers – this is a huge win.
- You’ll be able to lean on some of them for constant product feedback and iteration – create a product feedback group you can easily ping can be super helpful.
- I recommend creating a set of 10 simple questions and just get going – after you chat with 20+ customers you’ll start to get the hang of things.^
- Finding customers is always tricky, and even more so during black swan style events like covid-19 but they’re there and cold calling always works (more on this another post)
First, do as much as you can without spending any money
This sounds intuitive but it surprising how many people I meet that just start throwing money at their startup idea without doing the ground work first. They hire an app development agency or a freelancer and just spending cash with no real understanding of the core problem or customer. Inevitably they pop out the end of a 6 month product build with something that no one wants or is willing to pay for and its disastrous.
Early/first-time founders should try to become an expert on the problem and customers without spending any money.
- Bias towards experimental testing and action with all available tools** – rather than internally debate hypothetical ideas they just got out and try things (successful founders I’ve observed are really good at this). For example, you want to know what tools your customers use now and how much they pay? Go ring up 10 of them and ask.
- Cobble together a proof of concept solution with off-the-shelf parts* and test it with people – These types of product tests are essential in reducing your risk of business failure. Questions you can answer include; does it solve the problem in an effective way? Do test users find this valuable or interesting?
- Be curious about your customers and go talk to as many as you can: Set up interviews and phone calls; understand what makes them tick and motivates them to buy; understand their typical day-in-a-life of your customer can go a long way in creating an effective first product
- Become an expert in your industry! Founders need to become experts of the industry you’re disrupting. If I know more than you (as an investor) it’s a bad sign. Ideally, become a famous expert of your industry as that type of PR/acknowledgement can help win over big customers e.g. YouTube videos, blog posts or how-to articles etc.
- Above all, try lots of things and use whats already online
Start to frame things from ‘problem-first’ or value perspective
It’s very easy to frame things from the basis of your ‘idea’ which is typically an idea for a new product or service. Notice how many founders start by pitching their startup with ‘my idea is…blah’ and not ‘my startup solves this problem’.
But (sustainable) businesses aren’t created off a cool product idea, they created off someone paying you money to solve their problems.
Understanding, and I mean truely understanding, the problem is essential if you are going to be able to build an effective product-solution. Some founders have a natural advantage here, e.g. you’re a power user already, while some founders only know the problem from a user perspective, not a customer.
Problem-first thinking means understanding;
- The true value of the problem in the eyes of your customers – does anyone care enough to actually pay you to solve this problem? How much would they pay (or whats the range of value)? Keep in my the 15-minute rule.
- How big is the problem? How severe is it in the eyes of the customer? – These aspects of understanding the problem can be super helpful in deciding on price, distribution and testing.
- Are you missing the bigger opportunity here? – Often starting with a smaller idea you end up stumbling into a much bigger problem, this is a great thing but founders need to be open to seeing things flexibly and shifting your focus. Again, this comes from understanding and speaking to your customers in person.
That’s some of my top general recommendations (a few more recommendations here). There are many more things to cover but hopefully thats enough to get some of you thinking as your explore your new startup idea.
As always, feel free to comment or reply.
Good luck! (and stay safe everyone).
Notes
- **There a lot resources out there for building platforms with no engineers, search ‘no code businesses’
- ^Chatting to customers, or customer interviews, is tried and tested design-thinking methodology. The best UX teams are really good at this. Google is your friend or check out this post from Incubate.
- *Off the shelf parts applies to both hardware (parts you can buy from China/electrical stores and piece together to show some part of the solution working) and software (open source libraries, exisiting platforms, no-code builds)
3 comments