What your to-do-list consists of, and what your metrics for measuring progress should be, depend greatly on the stage (see article on stages) you are at. If you spend energy on a task that should not be on your priorities, it is counterproductive. It can be even lethal. No matter how good or hard working you are.
activities done in startups are inherently wrong. They might be exactly right –
for someone in a specific situation. But are they right for you, right now is
example of this is premature scaling -
the #1 cause of startup death. The activities being performed can be exactly
the right ones – for someone who is ready to scale. But if you are not, you may
commit a suicide as a result.
A related topic is, what should be the key indicators of your progress. If you are in PMF stage trying to measure Customer Love, think what is a good proxy for that? You get what you measure, so picking the right indicators for each stage is important.
Identify the stage where you are at and what should be on your to do list accordingly
Identify the right indicator to measure your progress towards your next milestone
Shortage of time is your biggest obstacle - spend it wisely
Time is the biggest shortage startup has. So you need to spend your time doing right things at right time - otherwise you hours will be wasted on doing something that could have been done on later date.
One of the lessons I learned while entrepreneur was: You can spend your time doing things right (corporation) or right things (startup) !
You have a
plan, you execute but the results (such as sales) are not there. What’s the
problem? Bad salesguy, so fire him and hire a new one instead? Or could the
problem be a more fundamental one: is your plan wrong, or more precisely, the
assumptions your plan is based on are wrong?
plan x execution. It’s not always obvious which one is wrong. Both could be.
But for startups struggling with sales, the biggest issue is typically not
about sales execution (it might be suboptimal, but not the root cause). It is
likely to be a product/market fit issue. Or even more fundamental,
problem/solution fit issue. If there is no real opportunity, not even the best
salesguy can get a deal.
In most cases, rather than rotate through a number of salespersons, you should go back to your basic assumptions about the market, customers, their needs and expected behaviour. You probably have missed something. Learn from your experiments, adjust and then try again.
Steve Blank wrote ” The difference between winning startups and those whole lose is that the winners understand why customers buy. The losers never do”.
This is the material question of problem/solution fit.
There are different ways to address the problem/solution fit. One of the first tasks is to segment the information you have verified on customer segments. This should continuously be kept up-to-date.
On good tool we have found is from Ideahackers ( https://ideahackers.nl/ ) and their problem/solution fit canvas:
Corporate way of thinking: We carefully prepare a plan. Then we implement it precisely. The results will be as stated in the plan. Failure is due to bad execution.
Startup way of thinking: My plan is not really a plan, it’s just a sum of my hypothesis. For sure it will be wrong but I don’t know where and how. I need to run lots of structured experiments to test my hypothesis. When I have validated my assumptions, I may have a plan that is worth something. Failure is due to not running enough different “tests” with customers.
startups behave like corporates in this regard, assuming their plan will work –
just throw in money and people and voila. No. Be very aware that until you have
validated your assumptions you do not have a plan. Then you can not be
implementing a plan (read: scaling), all you can do is run experiments.
of an experiment is to increase your knowledge – does this work, Yes/No. The
job of a startup is to run experiments. A good startup learns a lot while
spending very little effort and money. A bad startup spends a lot and doesn’t
learn much.Cost efficiency of your learning should be a key
objective while in the experimental phase (=all phases before scaling, by which
time you should have a validated plan you can just implement). Cost efficiency
of running your operation should be your key objective once at the scaling
is like a newborn baby. The development of a baby always follows a certain
sequence: learn to eat, get the digestion system going, then crawling, walking,
talking, running, reading, writing etc. The first close to 20 years of a human
life are spent on just learning the skills needed to be a real, adult human
being. And it always happens in a certain sequence.
expect a 2 year old to be able to run a marathon, nor a 2nd grader
to apply for a university.
follow a similar kind of a development. But that is poorly understood (or
accepted), resulting in “2nd graders trying to get into a
University, with the help of a rich dad” – in startup parlance known as
“premature scaling” (usually fuelled by foie gras funding).
babies and startups alike should focus on developing skills that kids of their
age are meant to. Even Wunderkinds who have special skills and are faster
learners than most have to follow the same sequence, they may just advance
faster.“The Startup J Curve” by Howard Love defines a 6
stage development process a startup has to go through, in sequence, to make it
to the finish line. A brief summary of the stages can be found here
Every startup should identify their place on that curve, and understand what should and SHOULDNOT be on their priority agenda while at that stage. And when are they ready to move to the next stage.
One way to
look at the stages is as a startup Founder to do list:
Provide evidence that there is a real business opportunity with real problem worth to solve. (problem/solution fit)
Provide evidence that a) you can build a product that does the job (product) b) you can find a market segment that loves your product (market). (product/market fit)
Provide evidence that you can build meaningful business. (business model)
Provide evidence that your business is scalable. (ready to scale)
move to the next item on the list only when you have ticked the previous off.
And expect to do a lot of iterations – one step forward, half a step back.
Sometimes all the way back to square 1.
Problem/solution fit needs to indentified & verified prior you can start looking for product/market fit or scaling. Here is a presentation that can help you on identifing the problem/solution fit.
Typically entrepreneurs feel pressure - both “internal” and external - to rush to scale. Many time even without understanding their problem/solution fit and how it differs between segments.
This results in not finding product/market fit or in inefficient and pre-mature scaling (read waste of money).
The aim of problem/solution fit process is to be able to identify the best opportunity to pursue further.
Startups have different stages. Howard Love has well articulated the different stages and we have included the problem/solution fit, product/market fit and scaling “fit” for you to understand how these stages overlap each other.
Where is your startup ? What are the KPI’s relevant for the stage you are in ? Have you “overleaped” one of the stages ? What kind of verification and facts do you have ?
Is you startup still in search mode or are you trying to scale ?
Too often startup entrepreneurs mix searching and scaling - which in reality are two important but totally different things. Searching is something each startup has to go through and make own discoveries. It is typically related to 1-3 first years of the company, while either in finding problem/solution fit or product/market fit.
Scaling only comes and should be done when those both have been found. The biggest reason why startups fail is premature scaling !
The overarching higher cause for us is about making the whole startup community aware of an alternative to the stereotypical “how to raise as much money as possible” thinking (which results in having to tell a really bold story to pump valuations up, and everything that forces you to do). We want to help build more successful startups, which reward the founders and investors for the risk-taking. One cornerstone of that is the acceptance of basic facts such as statistical probabilities of success in different scenarios. Hence we favour a rational approach to risk and funding, as on average the survival rates are much better when your plan does not depend on winning-the-lottery type odds.