Here are five things you should start doing if you think you have a great idea for a startup.
There is a palpable excitement in the air when you walk around Tech City in London. There’s a frenzy of activity as entrepreneurs leverage technology to make dreams a reality. Technology has changed our lives for the better, and will continue to do so at an accelerating rate with the introduction of the IoT, Machine Learning, and Blockchain.
States Logan Hall ex CEO of Rebel Hack. However, not all these startups are going to survive. Some entrepreneurs are just making products for the sake of making products, which creates… well, a lot of noise.
So with all this noise how do you begin to validate your idea and give yourself the best possible chance of success. Here are five things you should start doing if you think you have a great idea for a startup.
What problem are you really solving?
This is where is begins. You realise something frustrates you and could be done better-using technology, but identifying and articulating the real problem can be really hard.
More often than not, the problem you’re trying to solve is not what you think it is. Choosing the right problem to solve can make significant differences to what your business becomes.
Look at Uber and Hailo. They both tried to work on what might be perceived as the same problem - moving people around the city. However, there was one obvious winner. Why? Uber identified the problem correctly, found a way to fix it and took off into the stratosphere… Hailo didn’t quite identify the problem properly. I believe Hailo misidentified the ultimate problem they were aiming to solve, and focussed on the ‘hailing’ process, hence the name! However, I believe the real problem was that licensed taxis were expensive, and Uber took about solving this in many ways, but ultimately increasing supply by helping more people make money and become taxi drivers!
When we take on a new partner (aka client), one of the first processes we undertake is a Problem Solution Analysis Workshop. We interrogate the founders of the business to find out if their proposed solution is solving a real world problem in the most efficient way.
Beyond the meeting, we also undertake user research, where we identify if the ‘real world problem’ identified by the founders is a genuine problem others' encounter. We use a combination of onsite, email, phone and in-person surveys. Our job is to go out and validate (or falsify) the assumptions on which the business is looking to be founded.
So you need to ask yourself what assumptions are you building a business on because it’s these that you want to test early on. You should be able to distill these down to a few key sentences, which you can call belief statements. Then go and find out if others share your beliefs.
Know where to talk to your niche markets
There’s a great book by Malcolm Gladwell (http://gladwell.com/) called Crossing the Chasm (http://www.amazon.com/Crossing-Chasm-Marketing-High-Tech-Mainstream/dp/0060517123) that explains how focusing on a small niche market will significantly increase your chances of success.
A niche market is a group of people that already talk to one another (either in real-world or digital spaces) so they can do your marketing for you via word of mouth. You need to keep your launch super focused. Know your early advocates by name and be regularly engaging with them on relevant social media. Each niche market will have a slightly different set of needs, therefore focussing on the needs of one niche will help you solve their specific problem.
Identify 3 niche markets and the channels where they reside. Then I would get busy and engage with everyone in that niche - over time gaining influence, but more importantly listening and learning about their pain points. You should be looking at channels where you can do outreach on a 1 to 1 basis. Social media is a great place to start.
Think small, think focussed. You want to gain a niche market monopoly first.
Identify the value propositions for your personas in those niches
Ok, so you have now identified a problem, validated that others have it too and have a simple solution that people find compelling. You even know where your potential customers hang out and have some influence! The job now is to learn how to explain what it does, and the value it gives the user.
The main point of this stage is to find a compelling value-add for the user that makes them want to part with their contact details in order to be part of something special. Again, wrap your value proposition around the problem and think about how your solution relieves that problem. It should be short and simple. Don’t use big words. Rob Fitzpatrick suggests you ask your mum (http://momtestbook.com/) - if she doesn’t get it, no one will.
Then build and deploy a simple landing page. You can use a great product such as Launch Rock (https://www.launchrock.com/) for this.
Ask your potential customers what to build
So this is the bit that I think many people get wrong. You have a validated problem and a simple solution. Now you need more validation and some guidance from prospective users about what direction to go in first. Build 2 basic surveys using SurveyMonkey (surveymonkey.com) that do the following:
Identify which product categories are most important to the users Identify which specific product features should be built first.
You should be able to acquire anywhere between 10 and 100 new completed surveys per week (depending how much outreach you are doing, and how big the market is). Now although these numbers don’t offer you a statistically significant data set, it should inform your instinct. Remember, all you have at this stage is gut instinct, and the role of data is merely to help you make business decisions. Don’t get bogged down in Bayesian Statistics.
Once you have this, you should be able to form a product roadmap and get developing. Release often, release early. Feedback is critical - you won’t succeed without it.