Startup Is All About Speed - Klubify

Startup Is All About Speed

“Move fast and break things.” Mark Zuckerberg

 13 years into my soul-crushing indoctrination into entrepreneurship, it became clear why I’d failed so many times. I had acted based on assumptions instead of making decisions based on real data. When I purchased another company, I assumed I could bolt on $40,000 profit. Wrong. When I launched Informly, I assumed that if I created something great then people would buy it. Wrong. When I released a new version of Informly, I assumed that people would act according to the survey results. Wrong again. The only time I didn’t act out of assumptions was with WP Curve. I had no time to assume anything. I launched, and every important decision came afterwards. I based those decisions on real customer behavior, not assumptions. The ability to learn from real data is why the 7 Day Startup works. You wipe assumptions off the table. Your focus is on launching in 7 Days. 

Avoid Failed Validation Techniques

 “The Lean Startup” movement has made people think that business has become a simple scientific experiment. Pre-sell $10,000 worth of your product and there’s a definite need there. Create a landing page, and if you get conversions of over 30%, then you have a great business. It’s validated. In rare circumstances, this works. Let’s delve into some of the reasons why, in most cases, it doesn’t. Validation Doesn’t Work Well When the Answer Isn’t an Obvious “YES” The popular stories you hear about startup validation go something like this: 1. I created a website with a brief video. 2. It went viral. 3. I bought a yacht. Dropbox started from a 3-minute video posted to Hacker News and their signup list jumped to 75,000 people in one day. At the time of writing they are now a $10 billion company. That’s great if you can get 75,000 opt-ins in one day. But if you don’t, is it a bad idea? Maybe you just don’t have much kudos on Hacker News. Maybe people don’t understand it. Maybe your video is crap. Maybe the right people didn’t see it. The reality is that most ideas aren’t going to go viral. Let’s face it: the chances of you coming up with the next Dropbox are low. This is particularly true for bootstrapped companies. Email Opt-In/Beta Signup Totals Do Not Indicate Purchase Intent Email signups are often considered the key indicator of whether an idea is sound. With the first version of my analytics dashboard, I had 1,000 people sign up for the beta (three months) and 1,200 people enter their email to be notified of launch. These may seem like small numbers, but it took five years to build up an email list of 2,000 people in my last business. I really felt like I was onto a winner. There is a very big difference between someone entering their email and someone paying you each month for a product. I’ve consistently discovered that once I launch a product, on page conversions go down. It’s easy for someone to enter their email to be notified. It’s much harder for someone to sign up, try, and use a new service. People Saying “It’s a Good Idea” Doesn’t Mean It Is As part of validating Buffer, Joel Gascoigne “simply tweeted the link and asked people what they thought of the idea.” His post on validating Buffer indicates that he read a lot into this: 

“After a few people used it to give me their email and I got some useful feedback via email and Twitter, I considered it validated. In the words of Eric Ries, I had my first validated learning about customers

Really? A few of your mates said it was a good idea and therefore it’s “validated?” It turns out that Buffer was a good idea and a product that people were willing to pay for. Does that mean the validation technique was a good one? I don’t think so. Here are some of the things that people around me said when I built Informly: “It’s a great business.” (Startup veteran Jason Calacanis. I sent him a login; he never logged in). “I’m not sure if this email will make it to you, but you’ve managed to build the software most of us wished we already did!” (Startup founder and angel investor; didn’t end up becoming a paid customer). “Thanks for helping to solve a problem most of us face every day,” and “Great work man! I use this product frequently and have recommended it to quite a few people.” (Didn’t end up becoming a paid customer). “I have just jumped onto the new platform from http://inform.ly and love it!” (Didn’t end up becoming a paid customer). “I’m in love with it. Let me know if you ever need a testimonial. I’ve been waiting for this all my life”. (Didn’t end up becoming a paid customer). “Hey Dan! Informly is amazing! What an epic idea. You can manage everything that matters from one place” (Didn’t end up becoming a paid customer). These are unsolicited. I had a lot of friends telling me it was a great idea and also giving me great testimonials. They are bad at predicting their own behavior and even if they think they will buy, it doesn’t mean they will. People don’t want to hurt your feelings.

 Coverage in Tech Press Doesn’t Work 

When I launched the first version of Informally it was a personal validation goal to get featured by a respected tech publication. I thought having that level of confirmation would be some sort of indication that I was onto something. So I was thrilled to get coverage with The Next Web and Mashable, and Australian tech sites like Startup Daily, Anthill, and StartupSmart. This was pretty remarkable given that: I’d never built a consumer web app before. I had marketed it mainly through my own blog posts. When I started I had no network in the startup community. I had no funding and no co-founders. I’ve read stories of getting 12,000 users from Mashable coverage. Combine that with the other coverage, and I should be onto a winner, right? Guess how many paid users were sent by the above traffic sources? Zero. 

Targeted Surveys Don’t Work 

Not long after realizing that the idea wasn’t going to fly, I decided to pivot to a content marketing analytics app. This time I was determined to make sure I validated the idea before working on it for six months. I built a targeted list of keen content marketers and asked them a bunch of questions in a survey. The purpose of the survey was to ascertain: Were people measuring their content marketing? Would they pay for a tool that enabled them to measure it? It even included specific questions like “Would you pay for this feature if I built it?” The results are above and they are clear: People generally weren’t measuring the important metrics for working out if their content was resulting in more business. 60% would possibly pay for it. 20% would definitely pay for it. I thought it was tapping into a big need. 

Post-launch, most of the people in the beta list didn’t even use the product. No one paid for it and, after launching it to the public, the signup rate (on-page conversions) was well below the previous version of the product. Three people signed up to pay for this new iteration. One canceled within a week and the other two didn’t actually use it. I should blame the product for some of this. It was the best I could do within six weeks and it definitely needed improvement. But the results were shocking to me at the time. How could they be so different from the survey results? As Steve Jobs said, “People don’t know what they want until you show it to them.” The opposite is also true: People don’t know what they don’t want until they are forced to open their wallets. 

Pre-Selling is a Flawed Experiment 

Pre-selling your product before it exists is often touted as the answer to startup validation techniques that don’t work. This is how pre-selling works. You make an offer for people to pre-purchase your product at a discount. People are getting a good deal, but since the product isn’t live yet, they accept that they might have to wait a while and are happy to make that compromise. There are a few reasons why this approach is often not the way to go: Your goal at this stage in the business is to test your assumptions. Making overly generous offers is only testing whether or not someone wants to pay you the heavily discounted amount. It doesn’t test your real offer and is therefore a flawed experiment. People get excited about launches. Time and time again I get higher conversions on pre-launch pages than I do once products actually launch. The same applies to pre-selling. Just because you can get a few people to sign up for your “coming soon business,” it doesn’t validate the business. You may find after you launch that you have no momentum to continue building the business. In that respect, it might be a useful way to fund your idea, but it’s not a method of validation. The people who sign up for pre-sold deals may be your best customers. By providing them with a yearly (or god forbid lifetime) plan, you have killed any chance of building momentum with those people as you grow. Momentum is a key part of a successful startup. Countless businesses have died after an over-hyped launch and a failure to build ongoing traction. The idea of someone paying you actual money before you build something has a lot of appeals, but you have to ask yourself what you are testing. To really test whether you can build a business, you have to start building it. A few one-off sales don’t get you any closer to knowing whether you can do that. The Concept of “Validation” is Too Simplistic The fact is, business isn’t some sort of simple scientific experiment. There are a lot of factors that influence whether your company will thrive or die. “Validated” implies that it will be a good business, but there are a lot more influencing factors. Luck plays a huge part.

The timing might even be more important. The abilities to sell your great idea or build a team to execute your idea are also important factors. There’s a huge forgotten void between “idea” and “successful business” that validation doesn’t account for. A lot of the ideas that people have are great ideas that are already validated. If someone is doing the exact same thing you are doing and doing it successfully, then the idea is valid, right? Maybe; but does that mean you can create a successful business with the same idea? Not necessarily. Again, this is particularly true for bootstrapped founders with limited resources. “Validated” doesn’t mean the business will work. Achieving “product-market fit” doesn’t mean the business will work. Product/market/founder fit is probably more useful, but I’m beginning to sound like a university assignment. We’re living in the land of assumptions. No more assumptions. No more validation. Launch. 

Work More Efficiently

 When I was at university I figured out that I worked much faster the day before my assignments were due. At first, I fought it because it seemed like a slack student thing to do. By the end, I embraced it. When an assignment was announced, I would go to the library and copy ten or so books that were relevant to the topic. I wouldn’t touch the assignment again until the day before it was due. That’s when I’d crack open the books and delve into the content. For exams, it meant I was more likely to remember the content the next day and my work rate was insanely efficient. This strategy took me from failing three out of four subjects in my first year to averaging six and a half out of seven in my last year. They even put me on the Dean’s list for exceptional students. If only the Dean knew! You don’t want to do this every night, but there’s no doubt that a kick in the arse will drive you—at least temporarily—to perform at a higher level. It’s proven in research. You work more efficiently when you are close to a deadline. If you are a long way out, you make tasks up that you think is important.

As a result, you don’t get any of the important work done. Before you start a task, your brain visualizes the hardest parts to come. It then tries to simulate real work by focusing on small mindless tasks. In other words, you spend hours and days fussing over logos and website copy instead of selling your product! Once you start something with a clear end date, it drives you forward. Be an Entrepreneur A wantrepreneur is someone who wants to be an entrepreneur but is so obsessed with watching TED talks and talking about their business ideas that they never launch them. Do you know the type? Every time you see them, they have a new million-dollar idea. Or a sad story about how they thought of Facebook three years before Zuckerberg. They don’t understand that entrepreneurs are rarely the inventors who came up with breakthrough technologies. Instead, they are people who took a small problem and worked it to death until they found a solution that gained traction. If you have a conversation with a friend about your business idea this month, and next month you are having the same conversation, you are a wantrepreneur. If you want to be an entrepreneur, you have to launch. If you follow the ideas in this book, I believe you can become an entrepreneur by this time next week. 

But 7 Days is Not Long Enough

 Yes it is. It’s amazing what you can achieve in 7 Days. You can’t deliver on your whole grand vision, but you can launch something. When you do, you can start talking to people who are paying you money. This is when you start making sensible business decisions and avoid assumptions. Beware that launching fast requires you to compromise a lot. Once you commit to launching in 7 Days, you’ll change your thinking on exactly what to launch. In this book, I’ll run through examples from all sorts of companies that have been able to launch in 7 Days. These cover a wide range including services, software, product delivery, and marketplaces. Not just all businesses you would associate with quick and easy launches. Still not convinced? Is your business in non-professional services or consulting? You can call someone right now, help them, and ask for money. Do you want to launch a plugin or software app? What can you do manually instead of with the software—at least in the short term? What features can you live without? Start talking with real paying customers and use those conversations to decide on your next move. Are you looking to release an online training or membership site? The technology will allow you to launch it in 7 Days. Save your epic launch plans for later, when you can make decisions based on real customer behavior. Want to create a physical product? How about you sell someone else’s product first and get real feedback instead of acting on assumptions? People who start businesses in these fields take months or years to plan and execute it, only to learn that it wasn’t a good business to start with. Launching in 7 Days requires a mindset shift. In the past, a software app like the one described above would go into an incubator and get seed funding. The founders would build a team and work on the product for six months before launching. But what happens if it’s not a hit? They pivot to figure out why and try to work out how much of their wasted code they can salvage. The 7 Day Startup mindset is that you will launch it in 7 Days. You won’t waste any time building something that you don’t know people want. Once you aim for a week, you will start to question every assumption and figure out a way to make it happen. 

 No. Seriously. I Can’t Launch in 7 Days.

 If that really is the case then perhaps you are going about it the wrong way. If you have launched a dozen successful businesses, and you are doing it for fun, let’s face it: you probably don’t need this book. If not, what you need is to minimize risk and minimize the time you spend working based on assumptions. If your idea is going to take six months to test, then I would suggest choosing a different idea. This book will help you do that. Let’s get stuck in. It’s time to launch a startup! 

The 7 Pre-Launch Tasks 

This is not like a typical business book. Don’t bother with tactics to “find your ideal market” or “create your unique selling proposition” or “practice your elevator pitch.” These activities are pointless before you launch because they are based on assumptions. I will walk you through exactly what to do on each of the 7 Days. For now, let’s consider the things that need to happen before you launch. 

Day One

– You need to have an idea. I’ll explain how to generate ideas and tell a good one from a bad one (as best we can without having real customers). 

Day Two

– You need to have something to launch at the end of the seven days. I’ll explain what a Minimum Viable Product (MVP) is and you can start thinking about what you will launch. 

Day Three

– You need a business name. It doesn’t really matter what it is, but I’ll look at a few ways you can create a simple, user name. 

Day Four

– You need a landing page or some sort of online presence. I’ll show you how to build a website in less than a day. 

Day Five

– I will give you a look at free methods for getting your business in front of enough people to help you decide whether or not to continue. 

Day Six

– You need to measure what success means to you. The last thing you want is to launch and then not know whether you have a hit a few weeks later. I’ll help you set some goals and plan to make changes if you don’t reach those goals. 

Day Seven

– You have to launch. In the last chapter, “Business Rules to Live By” I will outline the general principles that you can apply to any business. If you were expecting a 50-page plan, I’m sorry to disappoint. You can use these steps when launching your business or any product within a current business. I’m assuming you are launching an entire business, so please keep that in mind as you read the chapters. Note you will also have to go through a process at some stage to set up a legal entity. As I’m not a lawyer, I can’t tell you whether you have to do that before you launch. I won’t be discussing the legal aspects of setting up a business