3 Principles Every Early Stage Startup Needs To Know | Street Fight

3 Principles Every Early Stage Startup Needs To Know

3 Principles Every Early Stage Startup Needs To Know

Businessman removing a wooden card reading Start up from his poc

I recently gave a talk to early stage entrepreneurs at a weekend hackathon in Washington.  It was fun, challenging and educational for all of us

Given that the individuals were just starting on their journey, I choose to focus on things they should be considering coming right out of the gate.  Below are the three things I addressed with them, which I feel any startup needs to think about as they bring together their team and begin to build out a first version of their product or service.

1. Cofounders
The very first thing you must think about is your team – who should or should not be on it. Get it right or pay the price later.

Especially when you are starting something at a weekend event like a hackathon or Startup Weekend, it’s tempting to just grab any able body so you so you can fill your empty seats. This is ill-advised since even one wrong sailor on a can bring down the entire ship. It’s very important to fill specific roles within the team to put your company in the best position to succeed.

Here are the three positions I feel need to be filled if you are considering forming a team to build a software/app based startup:

The Developer.  First – and especially if you are starting something in tech – you’ll need a technical person.  This individual is the one who architects the product and who writes the code. Great engineers are able to balance pragmatism and perfectionism, are not averse to debugging and bug-fixing, and employ a healthy skepticism of their code and the world around them. This is the engineer.

The Designer.  Second, you’ll need someone who makes the code look pretty and readable to the layman, creating a great user experience.  Great designers understand that 90% of good design is not about the pixels, they understand basic coding and have a well rounded view of other sciences of the world. This is the designer.

The Hustler.  Lastly you’ll need someone who can sell your product, or the one who understands how to get it in the market and found by people. This is generally the business person, the CEO, and initially the lead sales person. To quote Fred Wilson, CEOs really need to just focus on 3 things: They set the overall vision and strategy of the company and communicate it to all stakeholders. Recruit, hire, and retain the very best talent for the company. And lastly, make sure there is always enough cash in the bank. That’s the Hustler.

Fill those roles first, or deal with the consequences later.

2. Customer and User Validation
The second thing early stage founding teams need to think about is finding out who will actually use the product by doing customer discovery and validation.  The knee-jerk reaction of most founders is to believe they are so genius they can think up an idea in the shower, grab a few developers to build the app and then sit back and enjoy millions of downloads from all over the world. This is very, very, very unlikely.

It’s imperative to get out of the door and talk to actual people who YOU THINK would be your end users.  If you sell to SMBs, typically the decision-maker (owner) is not your end user so you must do the legwork to find out who will be interacting with your product. You need to interview them, asking questions about what problems they are encountering, why they are having those problems and how are they trying to solve them today (they usually just piece together a few random tools to solve it until something better arrives.) Figure out how they are doing it now so you can offer a solution 10x better than what is available on the market today.

And rather than trying to plan the entire thing out before talking to customers — sitting in an office and writing a 30-page business plan — just start with a hypothesis, do some interviewing and testing on a few good ideas on how to solve problems, and then adjust and pivot with the results you observe.  You will learn more in a week or two of testing hypotheses than months/years of preparing a well-written business plan full of (mostly) wrong assumptions.

Do your customer interviews now or learn later no one wants what you just spent months to build.

3. Product Simplicity
The last one is a biggie. It’s vital that a founding team finds their vision, understands what they are trying to change in the world and then break it down into approachable and achievable pieces.

As a founder you need to think about your entire vision as a large iceberg. The challenge is to find the tip of the iceberg and only build/release that as the first version. As we all know, the rest of the iceberg is under water and very large, just as your entire vision is in your head and not visible to the rest of the world. Some think of this as an MVP (minimum viable product) and I concur, I just like the iceberg illustration better.

Where most foundering teams go wrong is they make the mistake of not finding or determining the tip of the iceberg and thus end up building the whole iceberg, resulting in lost time, a bloated product and a lost value proposition.

For every Uber – a very simple and easy-to-use app – there are thousands of apps that get it wrong and initially build too complex a product. They end up confusing users and not even getting to the point of exponential user growth.

Twitter was simply a status update and following what others were doing or thinking. That’s it!  And since people quickly understood it they easily talked about it and shared it with their friends. Snapchat was pictures you could send to friends that disappeared after 10 seconds. Easy. Groupon was absurdly simple, we all sign up and get the deal together! It was so simple, in fact, that typically too many people purchased the deals and ultimately threw off the proper economic structure for local SMBs.

The key is to break down your complex problem into its essence. Know the end game and the large vision but find the simple starting point where millions of people will understand what to do with your app. Your challenge is to find the fewest amount of features and code possible to solve your initial set of problems.

These three principles are essential to a successful product launch.  If you don’t pay enough attention, these are the core issues that will keep you from building a solid product, launching it successfully and achieving any traction in the market.

Nick HughesNick Hughes is director of business development for Knotis. He previously founded the mobile payment startup Seconds as well as Coinme, a new company built around expanding bitcoin and digital transactions into the physical realm via Bitcoin ATM’s. In addition to those projects, Nick is co-founder and the host of Founders RAW, a multi-media platform focused on highlighting stories of startup founders and their companies.