![]() ![]() Most important, this step ignores the problems of building bullet-proof, bug-free products that scale getting press acquiring customers beyond the bare minimum required to determine fit setting up distribution channels viral loops implementing the right business model designing a grand strategy hiring VPs building a sales organization marketing business development creating departments raising money from VCs unless your team has a track record or an amazing demo (you probably have neither) and so on.Įverything is subordinated to the task of achieving fit. How could you know what the right business model will be when you don’t even know what the product will be? Wait til the people walk until you pave the paths. But we ignore the problems of acquiring customers profitably, in quantity, or with the right business model or pricing. To complete this step, a startup needs to take some money out of the customer’s pocket - somehow - to prove customers will pay for it. When this step is complete, the company will be immensely more valuable than when it started. This approach reduces the manifold risks of building a startup to the problem of building a product that is a must-have for a large market. The product team works forward from the founder’s hypotheses, the customer team works backwards from the customer’s problems. The team is organized into product and customer development teams consisting of founders, technical engineers, and marketing engineers, with no other titles. The company keeps iterating until (1) the product has achieved measurable product/market fit and (2) the company has taken some money out of earlyvangelists’ pockets. In it’s infancy, a startup releases a Minimum Viable Product (MVP), puts it in the hands of a few customers, incorporates their feedback into the next MVP, and repeats this cycle indefinitely, perhaps pivoting along the way. There’s a gem behind every link - we’ve curated years of readings for this article.) ( Note: We don’t define terms in this article click the links for definitions. If it likes, it can even move back-and-forth between profit and loss. The business may break even at any time in this process. This is a strategy to Get Big Fast - rationally. (The opposite strategy is documented in Achieving a failure.) Finally, it spends the money to acquire those customers. Then it creates profitable distribution channels so it can print money to acquire customers as quickly as it likes. It’s hard to distribute a product customer don’t love, so the business achieves product/market fit first. This strategy is particularly useful for startups with significant market risk. Creating profitable distribution channels.This article describes a process where customers, product, and team all move forward, together, to rapidly reach predictable profit by: The product’s requirements pulls a team into place.Įverything else startups do (raising money, patents, press, regulatory compliance, recruiting…) only exists to serve this triad: The customer’s checkbook pulls a product out of the company. Startups spend their time on three things: building product, acquiring customers, and building their team. “Most businesses don’t need more cash, they need more brains.” ![]()
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