How to set your product up for success in the market
This is cross-posted from the original article published on Forbes.
Being a startup founder comes with a lot of challenges. Most founders know that starting won't be easy, but few of them are prepared that it will take much longer to get off the ground than anticipated. What's more, the product idea they begin with often won't be close to the product that eventually finds product market fit.
Both of these things can happen without it being a commentary on a founder’s success or failure. The reality is that the day-one vision for a company is just that—a vision. More often than not, the most successful founders will learn early on that they have to be very flexible about how their vision is executed and be willing to pivot when the data reveals a better idea.
So, how do founders determine that their product is the right product to go to market with? There are a few things founders can do early on to help the product, and company, succeed.
Know What Type Of Business You Want To Run
Before a startup founder begins thinking about the product, they should have a general sense of what the end state of the business will look like. Do they want to raise outside capital from VCs or grow and scale the business off profits alone?
The former is going to require an idea that can hit venture scale, delivering a potential outcome that is over a hundred times greater than the amount of capital investors put into it. The latter means they will have nearly 100% ownership of the business, but they will have to grow the old-fashioned way—reinvesting profits back into the business.
Depending on which option a founder chooses, this will dictate what type of company they incorporate as. Setting up an LLC is fast and relatively cheap to do, but if you start to look for outside venture capital, an LLC structure isn't going to be able to support that. Starting with a C-corp takes a bit more work initially, but it gives you more options for outside capital in the long term.
These early decisions have long-lasting repercussions. Changing the structure down the line requires much legal work and time. Those are the very resources that could be spent growing the business instead. That's not to say an LLC won't work in any circumstance. If you're interested in running a business on your own without investors, it can be a solid choice, but that's a business decision that's better made early on. This is a recurring theme with founding a startup—do a cost-benefit analysis on your decisions, and if it will benefit you down the line, it’s oftentimes worth the upfront expense.
Be Willing To Put In The Work On Design And Presentation
Before starting Percent, I started a strategy consulting firm. It was a huge transition going from a consultancy to creating a technology platform—a product versus a service. Through that consultancy work, though, I learned the power of presentation and design. Good design is to be expected now, and the tools are easier to use than ever; the bar for what is “good enough” continues to be raised.
Good branding and design have to permeate through the organization and be a core part of the company’s philosophy, regardless of the industry. Investors and customers alike are constantly evaluating what you offer, and by not spending the time to deliver a good experience or a well-designed narrative, you give them just another reason to say no.
Founders need to take design and the user experience seriously as it affects how you and the company are perceived.
Credibility Matters As Much As Product
Founders have to manage through all kinds of competing agendas. A big part of your job is to lay out the future—the ideal end state of your company. Investors want to hear this vision; this is the reason they were compelled to invest and why they believe in you. At the same time, this desire to sell the dream needs to be counterbalanced with reality and the now. Prospective customers need to understand what pain point you’re solving for them and why your offering is exponentially better than the status quo.
As an example, my team and I first ran through a number of transactions ourselves, using our technology much like a client would, before going out to market in earnest with a battle-tested platform. In doing so, we could go into sales meetings knowing firsthand what their issues were, and we could point to specific ways that we solved their problems. Another byproduct of transacting in the market on our own was our ability to build up a reputation for ourselves, giving us credibility with the people who would eventually become our clients. That's a fantastic position to start from, and the work to build up this credibility can often inform critical product decisions early on that set your company up for long-term success.
Final Thoughts
Running a startup isn't easy, but thinking through the whole lifecycle of the startup journey early on can help avoid common pitfalls. As much as a startup’s success is based on hard work, it’s also down to a little bit of luck and a lot of making fewer mistakes. Regardless of what sector you’re in, getting a startup off the ground often follows a very similar playbook, as the fundamental path in taking a product to market is similar at the early stages. You will always need to incorporate, capture the mindshare of potential customers, put your best foot forward with great design and be willing to do customer-driven product development.
If you choose to embark on the startup journey, know that sometimes good breaks and luck do come. But the more prepared and ready you are for when those opportunities come your way, the better position you’ll be to take full advantage of them.
