The FounderSensei program is all about helping entrepreneurs find scalable, repeatable business models. We focus on this area because in the end, it's the only thing that matters in the early stages of a startup.
Since our last five startups were profitable with no outside capital, people often ask me, "What is the key to success?"
Here's what I think are the five most important keys to startup success.
1. Recognize your first idea is probably not going to work
One of the biggest differences between newbie and experienced entrepreneurs is the level of awareness between what matters and what doesn't.
A newbie entrepreneur thinks being right is what matters.
An experienced entrepreneur knows being successful is what matters. Who cares if I'm right.
The difference is that an experienced entrepreneur has experienced failure. Failure that has humbled her. Failure that has delivered a message - you're probably going to be wrong about how this startup plays out. The good news is that it doesn't really matter. What matters is recognizing that you are going to be wrong about stuff so you better find out where your holes are as soon as possible.
2. Rely not on opinion but on customer behavior
Startups are incredibly unpredictable. Entrepreneurs see things that other people don't. In my view, any startup process that relies on opinion is doomed to fail.
Opinions were just flat wrong about Tesla, Amazon, Airbnb, Twitter, Facebook...shall I go on?
What all these entrepreneurs have in common is they ran experiments and interpreted customer behavior to find their business models.
When I see entrepreneurs meet with mentors, investors and venture capitalists to "get their opinion," I just shake my head.
Opinions are like assholes. Everybody has one.
We need data. Data will lead us to the promised land.
3. Test your riskiest assumptions first
Testing your riskiest assumptions first is a fundamental principle in lean startup. This is absolutely correct. If you don't test your riskiest assumption first, you know, the one you are scared of, then you are creating waste. It's really that simple.
Here's a shortcut to determine what some of your riskiest assumptions are early in the process.
4. Tune into what resonates with customers, especially if it's not what you are expecting
When I worked as a product development engineer at Procter & Gamble, many, many years ago, we used to call surprises "Ah Ha Moments." These are surprising insights that explain customer behavior in a new way or are completely different than what you expected. It's really important to listen to these Ah Ha Moments.
Many times, surprises hold the keys to success. Surprises are counter-intuitive. Surprises are little gold nuggets that you just found and that your competitors don't know about. Pay close attention to surprises and drop everything you are doing when you hear them.
The standard for what matters in business model validation is customer resonance. This is the customer's emotional, often non-verbal response to the problem or solution. Resonance is so important because it is a signal from the Universe of what it wants to create through you.
Be still. Just listen.
5. Remain open to how you are going to get there
Maintain focus on the customer and problem, but be infinitely flexible in how you get there. Because the startup process is unpredictable, it's critical to remain open to how the journey unfolds.
Very often, where you end up is not where you start. Don't resist this truth. Embrace it and become friendly with the uncertainty of how your business model will evolve as you gain more insight from customers.
Founder of FounderSensei.com
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