Sam Kamani and Will Schmidt
What Multi-Billion Dollar Industry will be Created because of Your Startup? (Location 100)
Creating a new business, even just a brick and mortar shop, never guarantees success – and tech startups have even less guarantees. (Location 134)
According to Jessie Hagen of U.S. Bank, 82% of new businesses fail due to cash flow issues, and nearly 79% fail due to starting out with too little capital. (Location 135)
If it’s not lack of funding, what is the key differentiator between startups that succeed, and the majority that fail? In The Lean Startup (2011), Eric Ries argues that the main reason startups fail is because they spend far too long trying to build the perfect product only to launch, almost out of money, with a “perfect” product... that nobody wants. (Location 159)
A great business idea isn’t enough. You need to quickly and cheaply test your assumptions to establish whether your product meets the needs of a market and fills this niche well enough for people to pay for it. (Location 164)
The early days of a startup should involve constraint testing, tweaking and learning with the ultimate goal of discovering product/market fit. Your product should solve a painful problem and be something the market both needs and wants. (Location 166)
Start small and embrace failure Sometimes it is only fear of failure that stops would-be entrepreneurs from pursuing their startup ideas. Even if they don’t care about losing money or wasting months in development, they hate the idea of creating a business and then seeing it flounder. (Location 169)
If your MVP launches to deafening silence, you have the opportunity to rethink or pivot on the idea. After all, you’ve successfully tested out your hypothesis. Now you can go back to the drawing board and adjust accordingly. (Location 174)
Although an MVP is often a functional working product, it can be even simpler than that. It could be a clickable prototype that you show to relevant people in the industry; it could be a YouTube video of the problem and the potential solution you hope to build; or it could involve selling a manual service (to be later automated with software once the idea has been validated by people paying for it). (Location 179)
The overarching goal of an MVP is to test whether there is enough demand to justify spending time and money on building the full version of the product. (Location 182)
Sometimes your MVP will be too basic to warrant charging money, or it won’t actually be a usable product. If that’s the case, there are other ways to measure demand and judge whether your MVP has been a success: Asking for pre-signups (offering a special deal to sign up before the full product launches). Asking for email-signups so users can stay in the loop as the full product is built. Monitoring usage and other user behaviour of your MVP (which could be a static website) using tools such as Google Analytics. Offering a ‘Pro’ version with pricing options, but informing users it is ‘currently in development’ when anyone clicks on it for more information. (Location 185)
All you’re doing is testing your ideas and being prepared to start with something unpolished. (Location 192)
“It’s critical to understand that an MVP is not the product with fewer features. Rather it is the simplest thing that you can show to customers to get the most learning at that point in time.” – Steve Blank, Founder of multiple startups (Location 194)
Having a fantastic idea for a new business is like falling in love. The idea is constantly on your mind, and even the most mundane activities end up being enjoyable as you run through the idea over and over in your mind. At this point, it’s tempting to jump all in. Having visualised the dream product, you want to start building it right away. While this passion is great, and is the way many startups begin, it’s only going to take you so far. And if you never achieve product/market fit, your enthusiasm will wane as you struggle to make your business profitable. The answer is to test the waters with an MVP. Take your product idea and shave it down until it is just one dedicated tool that you can build in a few weeks – a tool that solves a specific problem. Build just that product, promote it, and gather feedback. Then you’ll have real data to decide on your next course of action. (Location 203)
The ability to cull your idea down and ship an MVP fast is a huge indicator of how successful your Startup will be. How could you build an MVP version of your product it in a matter of days or weeks, not months? What is the core functionality you could focus on while ignoring every other possible feature? (Location 214)
It was a ‘scratch your own itch’ idea – he looked for the ideal solution and couldn’t find it. (Location 226)
Launch early and make it a paid product. (Location 239)
Josh charged for the product from day one because he wanted early proof that it was a product idea worth pursuing. And after the product was live, it was much more valuable to get feedback from real paying customers about what features to develop next than listen to people trying it out for free. (Location 239)
N.B growing and maintaining a two-sided marketplace is always a tricky problem to solve (you need enough subscribers to pay the bills, but you need enough highly skilled content producers to maintain the library and keep subscribers around). (Location 284)
Joel and John quickly realised that happy and effective instructors result in a more exciting content library, which in turn makes it easier to capture new subscribers (and retain existing ones). (Location 286)
The startup managed to get 200 signups in the first week by casually promoting its website on various Internet forums. (Location 314)
This simple “email first” startup went on to raise $900,000 in seed funding. By sticking with a narrow product focus and heavily investing in content marketing, the founders continued to grow the business which currently has 160,000 users and a customer base which includes well known companies such as Zappos, Shopify, Mozilla and Tripadvisor. (Location 332)
“Build first, then worry about scalability. You simply can’t anticipate every problem that 10 customers will bring, much less 100.” (Location 369)
1. Landing Page MVP (Dropbox style) If you have a great idea, but can’t yet build the product, one of the best first steps is to build a Dropbox style MVP, i.e a one page website that includes a video and an email opt-in form. (Location 385)
In some cases, you can build initial cash flow for your startup via concierge services, and then use this to self-fund developing the software solution which will eventually replace it. (Location 423)
Besides validating the business idea, the advantage of starting with a Wizard of Oz type app is that you can slowly improve your processes and incrementally replace various human tasks with software. (Location 437)
Their goal and vision is for Uber to become the world’s ubiquitous travel company. To achieve that goal, they essentially built an app as a concierge MVP. Instead of self-driving cars, they’d got an army of human drivers taking up the role of self-driving cars. (Location 448)
Whatever budget you have to work with, don’t use it as an excuse to hold off on building your MVP. (Location 456)
With $1,000 or less to invest, a Landing Page MVP is probably the go-to option. Present the problem you’re solving and describe the product idea. (Location 460)
Another option is to create a Concierge MVP – create a landing page and embed a Typeform form (www.typeform.com). This means when customers submit an enquiry, you can fulfil the service manually yourself (or use a third party). (Location 461)
Once you’ve got a landing page or website, a guerilla marketing approach will be needed. (Location 465)
Ideally, you should leave around half of your budget to spend on marketing. (Location 472)
Up to $30,000 or “I have some initial paying customers who will use it” At this level, you should be able to build a fully functional prototype of your product idea as long as it is ultra focused and solves just one major problem. Your budget should allow for paying a freelance full-stack developer to build a custom web application, but it is vital to guard against scope creep. By adding in just one additional feature, you could introduce unforeseen technical complexity, which will blow your development budget. (Location 473)
He wanted a world where, no matter what computer or device you were working on, you’d have access to all your important data. (Location 495)
A lot of startups can be created by building a simple first version in a few weeks, throwing it out in the wild, getting feedback and then iterating. The problem with Dropbox was not that an MVP would be difficult or expensive to make, but rather that it needed to work 100 times out of 100, if people were to switch to it as a way to store, access and share their files. (Location 497)
Surely if he built a tool which saved him time, and provided him tangible benefits, it would be a product others would pay for as well? However, instead of jumping in and starting the project, he wanted to learn from some of his earlier mistakes and opted to take a much more “leaner” approach to launching this new app idea. In fact, arguably the first MVP for Buffer wasn’t even a working app, but rather a landing page with a link to a fake pricing page! (Location 549)
After a month, he had three paying customers which gave him the confidence to double down on his efforts and continue adding functionality while also marketing it wider across the Internet. (Location 567)
By taking a lean approach and being profitable from the get-go, Buffer was able to grow on its own terms. The company gave up only 6.2% without giving any investor board seats. Since that time it has become even more profitable and, in July 2018, Buffer made the decision to buy out its main Series A investors for $3.3m using cash in its business bank account. (Location 574)
“The advice I always give [to help early stage founders] is to try and cut as much as possible out of the first version of the product. That way, when you launch, you’ll hopefully have fairly binary feedback: either people love that one feature, or they don’t find it useful. (Location 577)
It’s easier to figure out what to build out from a single feature people love, than to launch with a bunch of things and figure out what is working and what isn’t.” – Joel Gascoigne, Founder of Buffer (Location 578)
Depending on which research you consult, the failure rate of a custom software project is between 50% and 80%. According to four different research firms, only 20% of software projects are finished in a timely manner (and without loss of quality). In fact, research tells us that “the average project runs approximately 200% late, roughly 200% over budget, and contains only two-thirds of the original (agreed upon) functionality.” (Location 630)
When it comes to writing code, you can’t have tangible value without working software that you and your users can log into and use! That’s why the key focus for your project, the number one way to avoid overrun budgets and timeframes, is to ask yourself: “How can I get my hands on a working app as quickly as possible?” (Location 657)
How to simplify down to the first version How do we figure out what the first version of an app or web application should be? The most effective way to do this is to break everything down into ‘user stories’. What are user stories? Before you design (or even do rough sketches) you should map out all the ways in which the end users need to use your web application or mobile app. Instead of talking in terms of ‘features’ and ‘functionality’, you should write out basic user stories. These are sequences that users need to go through in order to achieve something useful. (Location 669)
In fact, according to Microsoft’s own research, the average user uses just 8% of Word’s functionality. (Location 703)
You can take your app idea and in 20% of the time have a product that’s 80% finished, which in most cases is all you need for version one (and maybe even all you’ll ever need full stop!) (Location 708)
In reality, all-in-one, all encompassing software products are mediocre at best, with functionality that mostly works but leaves users with a feeling of mild to high frustration. (Location 737)
“That’s been one of my mantras – focus and simplicity. Simple can be harder than complex: you have to work hard to get your thinking clean to make it simple. But it’s worth it in the end because once you get there, you can move mountains.” – Steve Jobs, Founder of Apple (Location 741)
“Good enough is good enough. There is time for refinement later. It’s not how great you start – it’s how great you end up.” – Guy Kawasaki, Investor, Author and early stage Apple Employee (Location 834)
Content marketing is important, not just because it works for building trust, generating leads, and cultivating customer loyalty – but also because it has become the new normal to acquire customers’ attention. (Location 853)
Search engines love videos – they see them as high-quality content. Google’s algorithms are increasingly prioritizing websites with video content. (Location 922)
Focus on engagement Google focused on creating an experience not a transaction. While people are waiting for Google to compare their selfies with paintings in museums, users are building their expectations. (Location 986)
What you can implement today - Think of your customer and your industry - what tool can you quickly and cost- effectively make that will either entertain or be useful to your prospective customer. (Location 994)
What can you implement today? Search and find an event in your industry that your target audience is likely to attend. Think of different ways you can capture attention at that event. Offline and online. For example: Facebook ads or Twitter campaign for the hashtag of the event. Use a lead capture solution like eventhook.co to capture more higher quality leads at your next event. (Location 1043)
It is important to find the right influencer for your product or service. Make sure their audience is aligned with your offering. (Location 1095)
Find a way to make your influencers look good. On top of paying them, give them coupons, voucher codes or a free product they can hand out to their fans. You are building their brand as much as they are building yours. Make it a symbiotic relationship. (Location 1098)
No one likes to follow influencers who are always just selling stuff. So talk to your influencers about how they can promote the product without looking like a sell-out. (Location 1100)
It makes sense to form this partnership because these companies have an existing customer base that you would like to tap into. In turn, the partnership benefits them because you have a cool new product that can be added to their offerings. (Location 1118)
Partnerships can cut customer acquisition costs (Location 1140)
Acquiring customers for any new startup can be one of the biggest expenses. One of the easiest ways to reduce your CAC is to form partnerships where you get access to your strategic partners’ client base. To form such partnerships, you will have to provide real value to your strategic partners and their existing clients. (Location 1143)
Forming a strategic partnership can be your fast-track to building an initial user base. (Location 1148)
You should be looking for non-competitive, adjacent complementary businesses to partner with. Once you’re engaged, treat them as your equal. (Location 1150)
Case Study Mailchimp’s landing page has all the ingredients necessary to make it a great one. (Location 1178)
Some of the key learnings from Mailchimp’s landing page are: It has a clean, organized design. A good landing page ensures there is a strong contrast between call-to-action buttons. The bright yellow background makes the darker Sign Up Free button pop out. It is minimalistic. There isn’t voluminous text on the landing page. It is to-the-point. Users can scan the landing page quickly and find what they are looking for. It makes abundant use of trust signals, indicating to visitors that featured offers and brands can be relied on. Offering further reassurance is a ‘client testimonial’ with images and logos from various clients. It is mobile friendly. According to statista.com, more than 52% of web pages browsed on online were via mobiles in 2018. (Location 1187)
Freemium - In the freemium model, there is always a free tier of the product. Most of the time it’s a very basic version and you will be often offered paid upgrades. (Location 1204)
Both these strategies have positives and negatives. According to Rob Walling, “Freemium is like a Samurai sword: unless you’re a master at using it, you can cut your arm off.” (Location 1213)
We answered these questions without requiring people to signup or enter their email address to use our product. This made it user friendly and so people wanted to share its benefits. (Location 1284)