10 common startup mistakes: #1 an idea = a businessJune 8, 2017 by Lee Erickson
About this blog post series…
I was recently asked to give a talk at a conference about my work with startups. In thinking about what to talk about, I realized that a question I get over and over is, “What is the biggest mistake that startups make?”
Always a great question. Learning from those who have “been there done that” so you can “be there and not do that” is an excellent way to de-risk your business and avoid costly mistakes.
Having worked with teams for a number of years, I’ve definitely seem some patterns. So, I decided to create a list of the top 10 mistakes for my talk. I’m sharing these thoughts in this blog post and others to come over the next few weeks.
I’ll also point out some some resources that might be helpful in hopes that it can help some other startups to avoid these common mistakes.
Mistake #1: an idea = a business
Clearly ideas are important and they are a starting point. But, an idea is…
- not a product
- not a patent
- not a revenue stream
- not a business
- and probably not even unique.
Ideas are easy. Implementation is hard. ~ Guy Kawasaki
Guy Kawasaki nailed it with this quote. I’ve seen startup after startup spend hours talking about how great their idea is. How it will make tons of money and everyone will want it. But, until you’ve released something and are getting real feedback from customers, it’s easy to imagine that you’ll be an overnight success. Eric Ries calls this the “audacity of zero.”
It’s not a business until you have a product out in the market (or at least a prototype that you’re testing). But, moving from talk to action is often one of the hardest things to do. It’s scary and it takes work. Plus, after you do some research, you’ll probably find out that someone is already doing what you want to do.
So what’s a startup to do?
Go talk to potential customers or industry experts.
All ideas need to be validated. Best way to do this is through customer discovery.
Get out of the building and go talk with potential customers or industry experts (especially important if you’re not well versed in that industry).
After talking (ideally in person) with about 10-30 people, you should be able to answer the following questions:
- What is the specific problem/need to be addressed?
- What are the specific characteristics (not just demographic) of the target customer ?
- What are they doing today to try to solve the problem/meet the need? (If they aren’t doing anything, than the problem probably isn’t worth solving.)
- Where are they still unsatisfied, frustrated, or wanting more? (A great way to identify opportunities for your company to fill the gap, reduce barriers, or provide additional value.)
Leave the surveys for later. Early customer discovery is about clearly understanding the problem/need and who has it. You should be focused not on a solution, but on building an understanding, at the deepest levels, about your potential customer.
Resources to check out:
- Lean Customer Development. Cindy Alvarez.
One of the best, actionable books I’ve read about setting up, interviewing, and analyzing the “so what” of what you are learning from your customer discovery.
- Understanding the job. Clayton Christensen.
From a leader in innovation, a helpful way to look at how to create solutions that really connect with customers.
- Discovering the job to be done. The Innovator’s Toolkit.
Specifics on how to articulate the job your customer is really trying to do.
- Customer discovery videos and examples. Steve Blank.
Details and further readings on the value and purpose of customer discovery.