Why Startups Need a Well Articulated Strategy (And How to Think About Yours)

Mark Suster 

Put simply – you need enough users in a segment who care about what you’re doing to dictate investing further in the product or in sales & marketing resources. If you solve a deep problem for a niche user group but not enough users have the problem you won’t achieve product / market fit. Or if you solve a problem for a big segment but your solution isn’t significantly better than alternatives – you won’t have a fast-growing, successful business. I often call this “going a mile wide and an inch deep.” The answer to either problem may mean simply refining your product to solve deeper problems or expanding the product scope to meet a larger group of customers’ needs.

 



Filed Under:
Collection: Strategy & Starting Up
Category: Starting Up

Startups are Here to Save the World

Babak Nivi

If the service provider’s duty is to eliminate the frictions in the startup’s journey, then it is the entrepreneur’s duty to only start companies that can make a meaningful contribution to the advancement of humankind. That means saying no to businesses that are the Internet equivalent of McDonald’s. And it is our duty as entrepreneurs to never sell, shut down or give up until we’re delivering innovation at scale.

 



Filed Under:
Collection: Strategy & Starting Up
Category: Starting Up

The Entrepreneurial Age

Babak Nivi

In the entrepreneurial age, physics and information will be replaced by entrepreneurship: the ability to serve a customer at the highest level of quality and scale, simultaneously. We will learn to put entrepreneurship to great use and it will be the basis for an organization’s differentiation and victory. This is not a statement that the winners are going to win. It is a statement that (1) the best strategy is to attempt to deliver the highest quality with the highest scale and (2) other types of differentiation should only be tactics that serve an organization’s entrepreneurial capability.

 



Filed Under:
Collection: Strategy & Starting Up
Category: Starting Up

Product > Strategy > Business Model

Fred Wilson

Getting product right means finding product market fit. It does not mean launching the product. It means getting to the point where the market accepts your product and wants more of it. That means different things in consumer, saas, infrastructure, hardware, etc, but in every case you must get to product market fit before thinking about anything else. And, I believe, moving to business model before finding product market fit can be the worst thing for your business.

 



Filed Under:
Collection: Strategy & Starting Up
Category: Starting Up

Why The ‘Fail Fast’ Mantra Needs to Fail, Fast

Mark Suster 

Validate that you can make money before starting. This means looking at what your buyer pays for similar products now, what the history of other people who have tried to monetize in this way have experienced, what your costs to acquire customers will be and what you believe you can make over the customers’ lifetimes.  These are all assumptions – nothing more.



Filed Under:
Collection: Strategy & Starting Up
Category: Starting Up

Corporate Entities

Fred Wilson 

There are many people who run a business and don't incorporate. A good example of this are many of the sellers on Etsy. They make things, sell them, receive the income, and pay the taxes as part of their personal returns. But there are three big reasons you'll want to consider incorporating; liability, taxes, and investment. And the kind of corporate entity you create depends on where you want to come out on all three of those factors.

 



Filed Under:
Collection: Strategy & Starting Up
Category: Starting Up

Building Products for Mass Adoption

Mark Suster

Technology products that want mass adoption should be designed for novice users.  ”Normals” as Chris calls them.  Products need to be blindingly simple.  You take your User Persona and try to see the product through their eyes, not yours. You then invite people who match this User Persona and watch them use prototype of your product.  There is only one way to really know whether you’ve achieved product nirvana: film users playing with your product and watch them interact with it.  I’ve seen this many times first hand and even your best attempts at designing “simple” products will surprise you when you see Normals trying to use them.

 



Filed Under:
Collection: Strategy & Starting Up
Category: Starting Up

How to Bring a Product to Market / A Very Rare Interview with Sean Ellis - by Babak Nivi

Babak Nivi

In an early stage startup you have an opportunity to put a product out there, get that initial user feedback, and then you have two choices. If that feedback is really strong and the users say that they’d be very disappointed without it, in a large percentage, then you can try to grow the business. Alternatively, if they come back and say that they wouldn’t be that disappointed without the product, then you have the choices where you can either try to grow it or you can decide that you’re not going to try and grow the business. And to me, my recommendation has always been to decide not to grow the business if it doesn’t have a lot of people that are real passionate about the solutions.

 



Filed Under:
Collection: Strategy & Starting Up
Category: Starting Up

Why did Skype Succeed and Joost Fail?

Chris Dixon

Skype and Joost are interesting companies to compare – they are about as close as you can get to one of those sociological studies that track identical twins who are raised separately. Skype was a spectacular success. Joost never got traction and was shut down.

 



Filed Under:
Collection: Strategy & Starting Up
Category: Starting Up

Are Business Plans Still Necessary?

Mark Suster 

In an era of “launch and learn” is there a need for a business plan? Short answer: absofuckinglutely.  I have seen really great product people espouse the death of the business plan.  Do so at your peril. So, definition: when I talk about a business plan I’m not talking about a 40-page Word document outlining your market approach.  That died with waterfall software development.  I’m not even talking about your 12-page Powerpoint presentation that you need to raise venture capital or to talk with potential biz dev partners. I’m talking about your financial spreadsheet.

 



Filed Under:
Collection: Strategy & Starting Up
Category: Starting Up

Most Common Early Start-up Mistakes

Mark Suster

I often talk with entrepreneurs who are kicking around their next idea.  Sometimes they’re working full time at a company or sometimes they’ve already left their employer and they’re bouncing around ideas with friends.  These periods of time can leave a founder very vulnerable in the future.

 



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Collection: Strategy & Starting Up
Category: Starting Up

The Startup Pyramid

Sean Ellis

Product/market fit has always been a fairly abstract concept making it difficult to know when you have actually achieved it. I’ve tried to make the concept less abstract by offering a specific metric for determining product/market fit. I ask existing users of a product how they would feel if they could no longer use the product. In my experience, achieving product/market fit requires at least 40% of users saying they would be “very disappointed” without your product.

 



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Collection: Strategy & Starting Up
Category: Starting Up

Don’t Hire a Marketer before Product/Market Fit

Sean Ellis

I add a customer development specialist when the Validation Step begins, which is the role I fill with startups. I belive eventually many people will specialize in this critical stage.  Without a specialist, startups waste critical time and resources deciding where to execute. It’s surprising how similiar the process of uncovering the critical information needed to drive customer adoption across different types of startups.

 



Filed Under:
Collection: Strategy & Starting Up
Category: Starting Up