Entrepreneurial Tip #1: Focus on clarifying what value your product creates
Pro Tip :- Avoid the wrong value proposition.
It’s surprisingly common that startups don’t carry out enough research to back up the hypothesis around their idea. At times, they completely misunderstand the value proposition on which they build their product. In simple terms, they try to solve a problem which doesn’t exist or can easily be solved with alternative solutions.
So, startups need to focus on clarifying what value their product creates by asking themselves these basic questions which should then be tested, initially, by a survey of the target market audience:
- What is the problem?
- Whose problem is it?
- How big is the problem?
- What value are we creating?
- Who would benefit from this value?
- Who would pay for this value?
- How much would they pay?
Entrepreneurial Tip #2: Don’t try to be perfect, if you have an MVP, get it out there fast!
It’s a big mistake to wait to publicly launch the product once it’s perfect. For example, startups spend (or waste) time and money building features which are the least important against the value proposition and delay the Go-To-Market date.
Being passionate about the idea is great but it can blind people into wanting to achieve perfection (everything in one go). Much worse, it can mean building something the startup wants but not what potential customers want.
Those erring here totally miss the meaning of the Minimum Viable Product (MVP), which is – the minimum work you need to achieve maximum value.
What goes into an MVP is defined by the Pareto Principle (aka the 80–20 rule) and the Kano Model (a product development theory classifying 5 customer preferences as shown in the diagram)
80 per cent of the value is created by 20 per cent of the effort.
And it takes the remaining 80 per cent of the effort to capture the remaining 20 percent of the user value.
Hence, one should focus on the most important functionalities that will capture the 80 percent of the user/customer valueSo, don’t wait until its perfect, once you’ve got your MVP development done, get it out there fast!
Entrepreneurial Tip #3: Choosing the right Team
Team is EVERYTHING. Work towards keeping the team motivated.
Here are the most common mistakes that block creating a motivated team aligned to business growth.
Wasting time and focus trying to get all the skills in-house rather than using committed partners like Innovify to deliver the initial requirements, allowing owners to focus on the business side.
Not letting team members contribute to the product – this kills team creativity and excludes them as valuable stakeholders.
Hiring for short-term/immediate needs. This can lead to both (a) firing them once the job is accomplished, leading to insecurity in other team members and (b) continuing to divert funds to non-essential activities, leading to cash burnouts.
Lack of clarification of roles and responsibilities, leading to confusion on the floor. Ejecting under-performers from the organisation quickly – laggards can pull an entire company down.
Judging teams only on their competence and NOT by their beliefs/values that relate to the business. Remember: competencies can be learned but not the values
Entrepreneurial Tip #4: Segment your target market well
Startups can be hugely overconfident in assuming the market is waiting for them and will accept them with open hands.
Thus, startups fail because they don’t correctly segment their target market.
They don’t consider the underlying needs of this segment and correctly balance the marketing 5Ps (Product, Price, Promotion, Place, People). Startups shouldn’t target the millions that might never use their product/service but rather the smaller handful who will enable them to better their proposition.
An easy thing to do is identify a few user personas for the product/service and understand their needs, beliefs, motivation, etc. This will enable them to better define the product, price it correctly and sell using the right promotion at the right place.
Entrepreneurial Tip #5: It’s not a one man show
Founders often start with a great idea and think they have everything to make it a success. However, there’s only so much one can do and they need different skills to deal with different aspects of the business.
At times, all a founder brings to the table is just the idea and possibly some passion. However, ideas are worthless and passion can wither away with the first failure.
They don’t bring any leadership or resources; they can’t get anything done and, eventually, always rely on others to get things done. Such founders are actually detrimental to their own success and their founding team would eventually move away to work on something better.
Entrepreneurial Tip #6: Giving up too soon
Arguably the most important point but certainly the final nail in the failure coffin. Failing shouldn’t lead to giving up – instead, to learning a lesson and using that knowledge to move forward.
We go into this in more detail in the single lesson from Silicon Valley piece so here we’ll simply cite Thomas Edison’s well-worn quote –
“I have not failed. I’ve just found 10,000 ways that won’t work.”
There are many hurdles to overcome in creating a successful business but these are the six most common we encounter among the startups we help and how you can avoid making them too.
Innovify is an end to end digital product management company with a focus on startups.
To learn more tips about avoiding the mistakes that startups make, read here. Avoid 6 Most Common Mistakes That Start-ups Commit
Also, if you’re hiring a CTO, read – What Should You Look for in a CTO -Chief Technical Officer?