Doing the Little Things to Get Your Startup Off the Ground
Let’s be real, starting a company is no easy feat.
From inception through growth, there are continuous trials and tribulations that every founder will endure. In this post, I’m going to focus on how to turn your idea into a business and use examples from how we got Gridwise off the ground. I want to focus on this stage of growing a company because this is where most companies fail. In fact, over 95% fail within the first 18 months.
Why the high rate of failure? It’s not because everyone makes the same singular mistake — it’s all the little things that add up. If you want to be a part of the <5% that survives past the 18th month of business, you have to make sure you’re doing all the little things right.
From the early days of validating the concept for your startup, through the various stages of growing your company, you will always have a ton on your plate. As such, you’ll have to learn how to effectively prioritize your work. Keep in mind, you don’t exactly have the luxury of focusing all your attention on one function of the business; let’s say, marketing. You’ve got to wear multiple hats and execute on tasks across all functions of the business. You have to be executing on marketing, product development, biz dev, legal, and more!
Throughout this whole balancing act, you have to ensure that all of your actions generate forward progress, rather than actions that make you feel busy but aren’t growing the company. By using an effective goal-setting framework, you can stay focused on important tasks, and deprioritize any tasks that don’t create progress towards those goals. One goal-setting framework that has changed the game for our ability to execute tasks at Gridwise, is the Objective Key Result (OKR) framework. OKRs were created at Intel and are widely used at high growth companies like Google, Slack, HubSpot, Amazon, Netflix, and LinkedIn.
The OKR framework is simple, yet incredibly effective.
At Gridwise, we do not set more than 3 goals for an entire quarter. If you try to focus on too many goals at a time, there is a good chance that you won’t accomplish any of them. In the case where you are in the idea stage of the future company you want to build, one of your first goals may be related to validating demand for your product or service.
According to CB Insights, 42% of companies fail because there is no market need. Too many entrepreneurs go out and try to create a company without validating the demand for their product or service — don’t be one of them. You must crawl before you walk; you must walk before you run, and likewise, you cannot build your vision on day one.
Remember learning the scientific method you learned in elementary or middle school? Many don’t realize, but it is still one of the best frameworks for proving demand for your product or service and informing iterations of it over time.
6. Accept or Reject Hypothesis
To get to the point where you can use start your market validation test, you must have proposed a question (i.e. will people pay or my product? who is my target customer?) and created one or many hypotheses which you want to validate.
Once you have your hypothesis, it’s time to run an experiment. Ask yourself, “what is the most minimal version of my product that will allow me to validate my hypothesis?” The key word here being, minimal. Do not go and build an app for your first few tests — that’s far from minimal. Below are two potential methods which you could use to validate demand.:
● A/B Testing Landing Pages
Create A and B version landing pages that depict what you think the product would look like, allowing you to test messaging, product positioning, and more. With using a dummy landing page that depicts what you think the product or service would be, you can test customer willingness to pay and/or use your product without even having to create any real product. You can use tools like Instapage, Optimizely, or Unbounce to create these landing pages without having to write any lines of code.
Example: to prove out demand for his shoes, the founder of Zappos would go store to store taking pictures of shoes that he thought would fit his desired brand, posted them on his website, and would wait to see what people would purchase. This allowed him to test demand for shoes without having to hold onto any inventory.
● An App Prototyping Tool Like App Sheet
If the product you envision creating would be a mobile app, then you could use a tool like App Sheet to create a minimal version of the app (still after a few other preliminary experiments are run). App Sheet allows you to build and power an app through a google spreadsheet. The benefit of this tool is that it allows you to not only validating willingness to use your app but allows people to interact with a product that is tangible and most likely will provide early learnings through engagement data and user feedback.
The test below details the initial test we developed to validate demand for the concept of which later lead to creating Gridwise.
We used A/B Tested landing pages to test the initial concept. The flow worked as such:
Throughout the funnel, we used Google Analytics to understand the demographic information of users who were signing up.
Once users signed up, they were taken to our success page, which let them know that “Optidrive” (the name at that time) was still under development. What we did let users do, was sign up to become one of our first testers, and complete a survey to give us more feedback.
This experiment leads to us receiving over 500 signups in 1.5 weeks, with over 100 of them completing the survey. The data collected & analyzed through this test enabled us to validate demand for our product through users willing to pay, and gave us a ton of feedback from users who completed the survey, telling us more about the pain points they experienced, and the solutions they wanted to see from us.
These traction and proof points, in addition to the team that was assembled during the process, enabled us to receive around first $25k (now at $2M) of investment capital from a startup accelerator.
“First you must build a business, then use a product to scale it.”
– A wise person
Like I’ve said before, I urge aspiring startups not to build their ideal vision from day one. You don’t want to be the team who built a startup with a great product, but no users. If you start with a minimal product that allows you to run experiments for your ongoing hypotheses and inform improvements over time, you will be more likely to build a product that users/customers love.
You want to avoid the “product bubble.” This is where people tend to build a product without getting user feedback to inform product decisions.
You essentially are building a product within your own bubble of thoughts & ideas, and when it comes time to launch your product to the world, you have created a product that no one wants. How do you know if you are or someone you know is in the product bubble? They may be saying things like:
I’ve heard these kinds of quotes countless times; and in my first company, FXConnection, I am said similar things myself. They’re all red flags which signal that you’re building a product without getting out of the building to get feedback and learn from your customers.
Another part of the product bubble that you must avoid is the “app-trap.” Everybody thinks they need to build an app as their first product or service these days to be successful; that’s not the case. Building a mobile or web app is not a small project. At some point it may be necessary to build, but definitely not during the stage of validating your product idea.
Finally, don’t forget to get out of the building and talk to the people who may become your users and customers. Engage them, ask questions, and keep their feedback in mind while developing the product. Your early adopters provide valuable feedback, but they’re not the sole source of feedback you should be considering if you want to avoid the product bubble.
I can’t over-emphasize the importance of this. Without the right partner, it is going to be impossible to grow your company at a pace you and others will be happy with. Also, if and when you need to fundraise, you will realize that investors invest in teams, not individuals.
The first step in finding the right partner is to map out your strengths, weaknesses, and the ideal personality traits you feel that your partner should embody. Once you’ve identified gaps in your personality, skill-set, and experience, you’ll be better able to find partners who fit those gaps. Now, there is no perfect recipe or source for finding the right partner — but from my experience, I would begin by putting out as many feelers as you can. Reach out to movers and shakers through your 1st, 2nd, and 3rd-degree connections in your network, let people in your network know that you are looking for someone on social media networks such as LinkedIn, and go to events where you feel that your ideal partner may be. Look for your partner online, and offline.
After you’ve connected with your potential business partner(s), you need to get to know them and see how your personalities mesh. ‘Date’ them as you would your future spouse — at the end of the day you’ll spend as much time with them; if not more than you would with any significant other. Working in a startup together is a big commitment.
“It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood; who strives valiantly; who errs, who comes short again and again because there is no effort without error and shortcoming.” — Teddy Roosevelt
As it is inevitable that you will encounter numerous naysayers throughout your life, you want to ensure that you do your best to not surround yourself with those who are only going to be critics of what you are doing. Their negative energy is only going to bring you down. You need to surround yourself with other like-minded and motivated people who are focused on growing themselves like you are.
No matter how smart you consider yourself, you’ll never have all the answers it takes to run a successful startup all on your own. You need to surround yourself in your business life; and personal life, with people who can present sound advice, and provide good judgment. You never know when your friends, mentors, employees, advisors, or investors will provide that crucial piece of feedback or introduction that will provide immense value to your company.
Understand that you will never be in the “perfect place in life” to jump into your startup full-time. It’s easy to say, “I will jump into this full-time after a few more years of work experience,” or “I have two kids, I don’t have time to start a business,” — but if you really want this and believe in the opportunity, you will find a way to work around any schedule constraints.
For example, when I got the idea for Gridwise and was working to get this idea off the ground, I was working full-time in banking (7:30 am — 5:30 pm) and just had a newborn son. As you can imagine, my time was limited. To be able to work on Gridwise and still have time for my family, I spent the last 6 months of my job working on Gridwise under the following schedule:
○ 4:00am — 6:30am
○ 8:00pm — 10:00pm
This was not an easy thing to do, but I knew that in order to jump into Gridwise full-time, I would need to get enough traction to get funded by an early-stage startup accelerator. In order to get to that point, I had to operate under this schedule and find a partner along the way.
Again, don’t make the leap until you’ve done all the little things I’ve listed above. Validate demand for your company before you make it a full-time commitment, and make enough progress with your idea to allow for some level of financial support through either revenue, financing, or both.
So, now you’ve made the leap! Great. Your startup is your full-time job, and you are going to be raking in millions any day now, right? Probably not… yet. Running a startup takes a lot of work, and you’ll be faced with challenges that will require you to learn and adapt.
I continue to learn new things every day, and the more I learn, the more I want to share with others who aspire to start their own businesses.
If you’re interested in staying up to date on any future posts I publish — give me a follow — I’ll be writing each month and I’d love to hear your feedback. Let me know if there are any topics you would want me to write about.
– Ryan Green
Doing the Little Things to Get Your Startup Off the Ground
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