3 quick steps to ensure your startup is on the right track in the new year
1. look for a real consumer (or customer) need
The best startups address a real need, that much is obvious. However, ensuring that you optimize your product or service to meet this need isn’t easy. Amazon stays true to this philosophy with its “Working Backwards” approach, starting any new project by writing a press release describing the offer to the end consumer. Amazon’s next steps are writing a frequently asked questions document and defining the full customer experience before finally developing the product. Stay true to your consumer’s needs and beware any compromise you make – each one provides oxygen to your competitors.
2. look who is meeting it now and disrupt them
Most consumer needs are being met today in some way, the question is whether you can meet them better. For example, Netflix meets a consumers’ needs better than traditional highstreet based video rental businesses. In fact, Netflix turned the incumbents’ expensive retail channels into their Achilles heals by distributing via the internet. It then leveraged the strengths of the channel to improve the customer experience, offering tailored recommendations, greater movie choice (at lower cost because of centralised stocking) and greater flexibility. Netflix even smoothes demand by inviting customers to create a list of films they want to watch and the company chooses the order in which they receive them. Netflix owns more than 55 million discs and, on average, ships 1.9 million DVDs to customers each day while Blockbuster filed for Chapter 11 in September. Recognise how your consumers’ needs are being met today and turn your competitors’ strengths into their weaknesses.
3. launch with ‘just enough’
Once you’ve identified the consumer need and turned the incumbents’ approaches into their Achilles heals, it’s time to launch. Launch with just enough to gauge whether your hypothesis is right and learn fast. Too often startups kid themselves that they need more features both before launch (a basic self-protection mechanism?) or after launch (to avoid addressing poor uptake by consumers?). Dropbox is a great example of a product that kept it simple: MIT-grad Drew Houston was frustrated with how often he forgot his USB drive and developed what he thought was a better solution to meet his need. To test whether anyone shared his need he initially released a short video explaining his plans on Hacker News – the video received 1200 Diggs and Houston realised that they must be onto something. The team then built the simplest version of the product possible, which retains its wonderfully simple UI today. The lesson, launch with the bare minimum to meet your consumers’ needs and learn fast.
Have a disruptive Christmas