As a result, I’ve spent a lot of time working with incubators, speaking at tech events, and mentoring startups to help grow the ecosystem.
As I mentored companies, built my own or helped build others, I noticed that I was hearing the same issues and was offering the same advice, so I started to create a playbook to building a startup. I’m hoping that learning from my mistakes will help save you from making some of them yourselves and get you to your next milestone faster.
I’ve never been a one for writing, so I’m going to try a different format for this post... ie. Lots of bullets!
Identify Your Purpose
As a founder, there are two important things you need to do:
1. Be ready for the long journey
2. Hire great people to delegate as quickly as possible
You’ve heard this many times, start-ups are hard. There will be high-highs and low-lows. Having a purpose for yourself that you truly believe in will help you get through the many times you'll want to give up.
But that's not enough, where I think a lot of new founders make the mistake is not spending enough time to clearly articulate to their team what the company’s purpose is. This may or may not be the same purpose you have as an entrepreneur. Once you have identified this purpose:
- Make sure everyone in the company knows what this is and all interpret it the same way.
- Make sure you only hire people who believe in and are legitimately excited about this purpose.
- Your progress will accelerate dramatically as soon as you start to hire people that you can delegate to and get load off of your plate. If people are aligned on the goal, you can be confident that they can make decisions autonomously and will focus on the right things.
What problem are you solving?
Ok, so now you have a purpose, but what problem are you solving and is it really big enough? I've heard hundreds of company pitches and probably 99% of them were either too small or weren't solving a painful enough problem. Or even worse, they were a solution in search of a problem.
My rule of thumb when trying to identify a problem is to ask these questions:
- How painful is this problem?
- If you were to shut down would your users be knocking down the door to get you to reopen?
- How big is the market the problem is solving? This doesn't mean I want you to go solve the problem for everyone that has the problem immediately, more on that later, but you should see a path to large scale.
Who are your customers?
- Figure out at least 3-4 personas of potential customers you think would benefit from your product.
- Start to test these personas, whether through product features, user studies, research or sales. At Perx, we tested new merchant personas almost every week to figure out who really needed our product.
- Start to eliminate personas as they fail your tests. This may mean they don’t convert at high enough rates, they don’t find the problem that compelling, they have poor retention rates, or they are not ready. You don’t have time to waste on difficult personas, they can come later.
- Once you find your “easy-money” personas, it’s time to double down. Focus your entire team on this customer. Plaster it everywhere in your office so everyone remembers. When everyone is aligned, you suddenly see that your product team knows what features to prioritize, your sales team knows what customers to sell to, your management will all be able to make decisions much faster.
- Don’t worry about having a narrow focus. If you create a great product for this customer and scale them, you’ll find that a good portion of what you built will apply to the next persona you target and the next and the next.