Starting Up covers what you will likely face in the first stages of starting your business. From forming a legal entity to shield yourself from liability, to validating your business concept to ensure your addressing a real problem, considering the issues covered in this section can immediately save you time and money.
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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.
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.
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.
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.
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.