- Idea – Validating an idea requires initial feedback and feel amongst a select group of potential buyers. This can be done via surveys either in small verbal groups or large online surveys. This can also be through the first 10-20 customers where many may be friendlies.
- Product/ Service – This is the long sought-after “product-market” fit stage where validation comes from the first cohorts of buyers – scaling from 20 to 100 inorganic customers. Depending on the product/ service, engagement metrics may also provide validation.
- Company – Let’s call this stage the growth stage for a company. At this stage, validation comes from lower customer churn. In many cases, competition will be fiercer here, so churn could be a problem.
- Category/ Market – There are clear market leaders with more niche players taking the smaller 20% of the market. (Follow the 80-20 rule.)
rate at which a business model captures monetizable value from its users
- Created value > captured value. That is, the value a customer receives is greater than the value the company receives (the customer pays).
- Captured value ≥ cost (delivering solution). This is simplistically understanding revenue is greater than (or equal to) cost.
- Created value ≥≥ cost.
This is a pretty simple to understand. For companies looking for investment (well, any company looking to be successful), it’s important to understand traction and all the drivers thereof. As an early-stage startup wiggles and fights its way towards product-market fit (or service-market fit), traction will likely be near-flat. But as the company reaches product-market fit, that traction curve starts to climb fast. Here, focus turns towards customer acquisition, and thus, the sales and marketing machine commences.
- Have first-hand experience in the market you’re trying to address. You can develop empathy easier, you may have a network of like peers, etc.
- Absent first-hand experience, be a sponge and do a lot of customer discovery to explore the problem and present your idea of the solution to get buy-in
- Selling on the dream is hard. Instead, sell on the primary value and benefit you’re providing with your MVP. You can share the dream, but sell hard on what you do provide
- Focus on the problem you’re solving and the benefit you’re delivering. Don’t try to jam-pack more features that deliver incremental benefit. Focus on what delivers the most benefit in the shortest amount of time so customers get it
- Launch, learn, iterate, repeat as fast as you can as long as you have sufficient “gut-feeling” on how the current approach is going
- Customer discovery up front (early and often) mitigates significant cascading risks down the line
|Body Boss Pods on the tablet and smartphone|
|Reflecting posthumously… Source: http://news.bbcimg.co.uk/media/images/64480000/jpg/_64480391_sunset_rocks.jpg|
“My contention, in fact, is that they [startups] fail because they never get to product/market fit.” – Marc Andreessen
- Capture data, and you can start to see a story. For us, it was poor product-market fit at the beginning which could be explained, largely, by a lot of hubris on our part (we thought we could be like Steve Jobs and tell coaches what they really wanted) and by poor customer discovery up front.
- Speed kills… or rather, lack of speed. If I could, I would’ve funded the team so everyone could be full-time on Body Boss, and thus, no other distractions of full-time employment elsewhere. Without distractions, perhaps we could have churned out the right features and user experience [quicker] to reach closer and closer to product-market fit.
- Have Empathy and Let the Currents Take You. As I mentioned above, there were many moments we, as a team, failed to listen to our customers. We naively believed we knew the better way to do things. We lacked empathy, and even though the market was trying to pull us in the right direction, we didn’t let it. When enough of the market tells you to move one way, you have to put aside your ideals for the greater good.
- Failure/ quitting is always an option. I don’t want to say “quitting” is always a bad thing, because sometimes, it’s the right thing. Like I said before, I could be blinded by what I believe is there. That’s why having a great team is important, too… to not just say, “YES” to everything I say, but to challenge me.
- Regret is a damned thing that can haunt you, but you have to move on. The experience with Body Boss has taught me a great deal on startups, about building a team, and much more documented in the 21 Lessons Learned. However, in corporate settings, a failure is a failure. In startups, failure is called experience. Embracing the lessons learned will give me great hope for the future.