Building a successful Startup is hard work. You always start with a big vision and lots of energy. But after some first iterations of your idea you get to this crucial stage. Will our Startup takeoff or will it go nowhere? The following questions help to find our in a (more or less) structured way.
1. Are we tackling a real Customer Pain or Need?
Is your Startup on to solving a real problem or fulfilling a real need of customers? That is the first an most important question. Customers prefer to work with established companies from a risk management perspective. So, you need to be sure that you find a unique pain or need to fulfill. Go out and meet the potential customers and validate the pain or need as soon as possible (see Customer Development). Some things to keep in mind:
- Focus on a broad need, rather than focusing on a smaller pain. This will give you more room to adapt and pivot (make a change in the direction of your Startup). We see many Startups that in fact are not much more than a Mobile App. You need to build something more compelling to have a sustainable business.
- Really validate: don’t base your value proposition on the assumptions of you and your peers only. Really validate and have at least 30-50 potential customers that confirm the pain or need. Be sure to ask the right questions and get some early adopters on board.
- Buying is pain as well: asking potential customers if they would buy your product or service is a good thing. But, this won’t immediately turn them into actual buyers. The pain or needs must be substantial enough for customers wanting to go through the actual pain of buying your product or service. Their pain or need needs to be frequent, substantial and have no substitute solutions.
2. Do we have Product-Market Fit?
With your the pain or need validated the next step is to find product-market fit. This is bringing the gap between your value proposition and the target customer. Ideally there is no gap and you have a clear understanding of who your customers are and why they buy your product and/or service. The ‘Why’ question can be answered in terms of functional, social and emotional benefits you offer your customers. The ‘Who’ question can be answered with a customer archetype. What are the characteristics of the customers that seek these benefits? This archetype or persona can be as concrete as a picture on the wall of your Startup office with name, age and preferences. Be sure to find the Product-Market fit as soon as possible.
3. What is our scaling strategy?
It is nice if you are able to gather some proof for your idea on small scale. Working with Early Adopters and Pilot Customers will provide useful insights. But you will have to think about scaling as well. How do you go beyond the level where you know your Customers and Scale your Startup for success? This scaling is not only about acquiring new Customers, but also about keeping them. You will need loyal customers that are promotors for your Startup. For scaling it is also important to have a business model that scales well. This about your revenue model, the key partners you require and the relationship and channel you need to become successful.
4. Do we have the superpowers to execute?
Execution is key to Startup success. It is all about team, traction and focus in this one. First you need to have a team that is really into tackling the Customer Pain or Need. The team members should be passionate about this and have the necessary skills and experience. Second you need to find your way to early traction. Traction is the proof that your Startup is on the track to success (e.g. growing user base, converting visitors, word-of-mouth, press coverage). This traction can be used to access the additional resources you might require to raise your execution power. Finally you need focus. All iterations during your Startup process must be focused. Not that you can’t change your path. You should make so called pivots when needed (see Lean Startup principles). But, focus on your big idea and focus on making the most out of all iterations is key for execution power.