When I reflect on what I have learnt from these companies and their founders, I am drawn to three messages worth sharing
Since immersing myself in the startup ecosystem, one thing has stood out above all else: people’s willingness to share the lessons of their own success or failure and help the next generation of startup founders.
While many early stage employees and startups blog about how they raised a seed round, were accepted into an accelerator program or uncovered some awesome growth hack, few embrace the concept as openly as Buffer, Baremetrics and Groove HQ.
In fact it was these three companies that encouraged me to embrace the concept of complete transparency with my new startup Task Pigeon and kick off a blog that documents our journey from day one. And when I reflect on what I have learnt from these companies and their founders I am drawn to three messages in particular that I believe are worth sharing.
1. Validate customer demand and customer #1
Joel Gascoigne, the CEO and Co-Founder of Buffer, knew that the best way to validate demand for his social media scheduling tool was simply to ask if people would pay for it up front. He didn’t start with a pre-launch campaign or even try to get the website perfect. He simply asked for people’s credit card details to see if they would pay.
In doing so he not only found that there was real demand but realized that you don’t need a massive launch to ensure success. You only need one customer to start, and in Buffer’s case it took four days before anyone signed up. And even then it was only for $5. So if your startup doesn’t launch with a bang on day one, just remember that it always starts with a single customer.
2. Ask yourself if you are solving a major pain point for your customers
Josh Pigford, the founder of Baremetrics, pens a powerful line in one of his original blog posts in which he states, “Look at any B2B product that’s been built…ever. It’s almost always been birthed out of the need to get rid of a painful process. The reason is, pain is inefficient. We avoid it at all costs. But in reality, that painful process is also usually pretty necessary to the health of the business.”
All startups should reflect on this and ask themselves what level of pain they are solving for their customer. The more painful a process is, the more value the business will obtain by removing it, therefore paving the way for an easier sales cycle and higher lifetime customer value.
3. It’s okay to launch in a space that is already competitive
Alex Turnbull is the CEO and Founder of Groove, a startup providing customer support software. The part of Groove’s story that immediately stands out is the fact that Alex chose to build a business in an industry where Zendesk and Desk.com were already significant players.
While not all hugely competitive industries present the same opportunity, Alex saw the fact that multiple startups were already fighting over the space as validation that the idea had merit and equally as important, his ability to deliver significant revenue. Furthermore, Alex shared the math in a blog post that showed even if you took just 5% of the world’s small- to medium-sized enterprises and then assumed that 80% of those would go to one of the top three players, there would still be a sufficiently large customer base to support another 171 companies generating $100,000 in monthly recurring revenue.
At the end of the day, each of these startups has their own unique story to tell. What they share in common, however, is their willingness to share it. For the next generation of entrepreneurs and startup founders, this provides a wealth of knowledge which we can tap into, learn from and adapt to reflect our own environment and business beliefs. Ultimately it creates an environment of knowledge transfer that can only benefit startups, startup ecosystems and the people and companies that populate them.
The views expressed are of the author.
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