Startups
Types of first customers
- Latent need - the customer doesn't realize they have a problem that needs solving. Traditional late adopter. Selling to them within 2 years won't happen.
- Active need - one who realizes the problem, but isn't motivated to do anything about it. It's on his mind, but not an active priority. Sell to them later when there is a more mainstream product.
- Early-vangelist - one who is actively searching for a solution and has a timetable for finding it. Problem is big enough that they've thrown together an intermediate solution. Customer has the budget to buy the product
The purpose of the first product is designed to be "good enough" for only the first paying customers
Understanding first customers objections First step is to understand what type of issues are being brought up (product? Presentation? Pricing? Wrong customer?)
4 types of startup markets
- entering existing market
- creating a new market
- resegmenting an existing market as low cost entrant
- resegmenting an existing market as niche player
Two key arms of startup:
- product development - focus on execution
- customer development - focus on learning, discovery, failure, iterations and pivots
The very best startup ideas tend to have three things in common:
- they're something the founders themselves want,
- that they themselves can build,
- and that few others realize are worth doing.
Microsoft, Apple, Yahoo, Google, and Facebook all began this way.
Small wins create confidence. Seek them out
Always err on the side of starting in too small of a market.
- it’s easier to dominate a small market than a large one. If you think your initial market might be too big, it almost certainly is.
Recruiting is a core competency for any company. It should never be outsourced.
Peer to Peer lending Prosper.com and LendingClub.com
A founder who knows whether wealth or control is his or her primary motivation will have an easier time making decisions and can make consistent decisions that increase the chances of reaching the desired outcome
“Is my idea good enough, or is my passion for it misleading me?”
as an early startup where the imperative is avoiding making the big mistake, having a group of equal partners with divergent views is a good thing. At that point, you’re all very polite and respectful anyway. When the time comes that your business is working and you need to act fast and make decisions quickly to grow and seize opportunities, the best thing is to have a dictatorship. Making the transition at the right time is the elusive challenge here.”
“If a startup has a COO, it’s a red flag: Either the COO doesn’t belong or the CEO doesn’t.”
Before you launch, you need a core story: a real-life story about a problem involving the people to whom you're telling the story and how your solution to that problem can make life better for them.
Guerrillas know that to remove the mystique from the creative process, they must think backward. They start by picturing the mind of their customer at the moment that customer makes a decision to purchase. What led to that decision? What were the thought processes? What made them take place? What were the customer's buttons, and what did you do to push them? Thinking backward takes you to the needs and desires that are crucial to motivation.
Success flows to organizations that inform, not organizations that promote.
If you want to increase your odds of understanding what your customers want and why, hire people who are like them.
Resources
- onstartups.com
- BestPlaces.net
- Determining equity
Children