Every successful company begins as a startup. For example, Nike was a distributor of Japanese athletic shoes before becoming the world’s largest sportswear maker. Amazon, Apple, and Google were all founded in a garage. Even Starbucks started as a modest coffee shop.
And yet, studies show that nine out of ten startups will fail eventually. Those are not great odds. Whether you are launching a small business or the next big global brand, you’ll need to work smarter if you want to succeed.
IIn this article, we’ll try to help look at how to build and grow a successful business and enjoy an even more successful product development process.
But what exactly is a startup? Neil Blumenthal, the co-founder of Warby Parker, defines it as a company working to solve a problem where the solution isn’t obvious, and success isn’t guaranteed.
This is a useful definition because it forces the founder or co-founder to develop clear differentiation. Beyond Meat, for example, developed a plant-based product that makes a great burger. In fact, nearly all successful companies offer great products. Many of the world’s largest companies were told they’d never make it when they first launched.
In the world of startups and venture capital (VC), unicorns are startups that have reached a valuation of $1 billion. Recently, Grammarly, one of the most used editing tools, joined this exclusive club. Becoming a unicorn is every startup founder’s dream, but it’s not a walk in the park. Billion-dollar startups are called unicorns because they are just as rare as this mythical beast. For every 10,000 startups that get venture capital (VC) funding, only one becomes a unicorn. So 1 out of 10,000 already successful companies that were able to secure venture funding. You can begin to see just how rare a startup unicorn is.
While we can’t guarantee that your startup will become a unicorn, there are a few things that can enhance the chances of your start-up succeeding.
Running any business is never easy, and launching a startup is even more challenging. Typically, startups are attempting to create something new and usually do not have a lot of funding. This means that many things can go wrong, and unless you have a concrete plan, they most certainly will. Here are a few things that you should pay attention to when building your successful startup.
Every great startup starts with an idea, a vision to build a new product that solves a market problem. Because you’re building something that doesn’t exist yet, it’s easy to make mistakes along the way. You must be clear about what problem you are solving and how your product helps to solve it. If you aren't clear about your purpose, you’ll find it hard to attract potential customers, stakeholders and convince top talent to join your team. You’ll also see how challenging it is to get customers.
As a first-time business owner, you should clearly define what your startup is about, what the product development process is, and who your target customer is. You don’t want to build a bad product.
The backbone of every successful business is the team. Without hard work and a great team, your chances of building a successful product are extremely low. Don’t fall into the trap of hiring sub-par product managers with the excuse that they are too expensive or that such a move will expose your weakness of not having the required skills yourself.
Building a successful startup, and if you’re lucky, unicorn requires you to be self-aware and understand your weaknesses. This is the roadmap to success. You don’t have to be good at everything. To build a successful startup, focus on what you’re good at, and look for team members, employees, or partners that can fill the gaps, come up with an incredible marketing strategy and offer new perspectives. If you are good at product management, you should build out your team with members experienced at driving marketing, sales, and the user experience. The whole idea of a team is to have diverse skills that complement each other and make your offering stronger.
When you start a business, you’re selling yourself strongly, but if you try to build your business all by yourself, you’re selling yourself short.
Along the journey of building your startup, you must always keep in mind that the customer is always right. This means that no matter how great you think your product is, it’ll mean nothing if your potential customers don’t want it. The only way your startup will be successful is if the product you build solves a real problem for a large enough market to make a profit. This is called a product-market fit (PMF). Without this, you’ll end up investing precious resources into a product that is doomed to fail. Unfortunately, most startup founders under-estimate just how long this might take. According to a Startup Genome study, Startups need 2 to 3 times longer to validate their market than most founders anticipate. Therefore, you want to be sure that you’re building what the market wants at every product development stage.
To achieve this, you need to do something called Validated Learning. Validated learning is a part of the agile methodology of product and project management. PayPal co-founder Eric Ries popularized it. Validated learning is a unit of progress that can be quickly verified to determine if your chosen direction is correct. It treats product development as a series of experiments that use a scientific approach to answer questions about what the market wants.
The concept is as simple as it is brilliant. You start by creating a hypothesis about what customers want. Then test the hypothesis by creating a prototype, known as a minimum viable product, or (MVP). Then you ask potential customers to use the product and collect feedback about the MVP. That information is then used to validate the hypothesis and decide if you are in the right direction.
Here’s a scenario of how it can be useful. Imagine you’re building a product, and you work on it for 6 months, investing tons of money and research, only to release it, and nobody buys it. Now you’ve built a product that no one wants, and you have to go back to the drawing board to restrategize. However, you could have found out that your product was not viable if you had simply taken an opinion poll or created a demo that your market could make decisions over. Your MVP would have shown that your product wasn’t the right fit for the market without spending so much resources.
This is perhaps the most important step, as your startup cannot be considered successful unless you have paying customers. Sales is an important metric that shows how successful your startup is. Your customers are the very reason you are in business, and growing that base is crucial.
You can’t afford to leave the task of building a customer base after you’re done building your product. Instead, you need to start building an audience, a ready market from the first day you start your startup. You must have strategies and plans to generate leads and eventually convert those leads to customers.
Leads are people that are interested in your product and are willing to listen to you and eventually become paying customers. One of the most essential tasks that you have as a startup is lead generation.
Lead generation helps you locate the people who need your product. For some ideas on how to generate leads for your startup, check out our article on lead gen, and how to carry it out.
Customers are vital to the success of your startup. You need to know how to find and attract leads, nurture them, and eventually convert them into paying customers. This is why your startup needs a Customer Relationship Management (CRM) System. A CRM system will help you locate customers and build a positive relationship with them throughout the customer lifecycle.
There are many CRM solutions available on the market today, but few are suitable for small startups. Most of the CRM space market leaders are perfect for large, enterprise customers but can be overkill for a small company.
Tapdesk is a CRM platform that caters to smaller companies, as small as a solopreneurship and can handle companies with up to 250 users. It’s designed to help startups start, generate revenue, and begin to grow. The platform is powered by powerful AI-technology that makes lead generation much easier and will make your sales process faster and more effective.