3 Different Startup Stages
A recent poll conducted brought to everyone’s attention that almost 99% percent of startups fail. The reason for this dramatic figure is, not enough customers. The second issue is with the plan of operation, startups are definitely not like traditional or mainstream businesses, and so all the advice gathered by ancestors over the years rarely works.
Startups usually account for rapid growth, most commonly beginning with a product, specific business model or a rare idea. Upon closer inspection there are a lot of moving parts in here, making it difficult to predict the right approach to finding the correct number of users.
It can only be done through constant feedback from the limited users you have throughout the process and made to keep mutating along the way.
A separate survey showed that approximately 65% of startups end up changing their business plan as they go along and keep coming up with new ones. There are different reasons for this but the most common is that people estimate everything before getting their feet in the market but after getting in there they notice everything is a lot different. At this point, they have two options, follow their guesses which might start turning into fallacies or start reworking everything that they had estimated, with information that is more accurate. Most startups looking for investment do not have a lot of time to play this game. Finding the right validation and feedback from your audience should be done as soon as possible so you can begin reducing the risk that may or may not exist with your strategy. we will break these down into 3 separate parts.
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CUSTOMER DISCOVERY
A startup that usually starts with an idea that’s generally quite innovative. In most instances, the idea is a solution to a problem or working toward making someone else’s life easier in some way. When going through the customer discovery phase, find out if the problem you are looking at has a market in need of the solution. That should be the first step. The second step, if the solution can be monetized. The idea should make sense that people do want to pay money for it. With the number of people paying for your solution, you should be able to work harder at making it better.
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CUSTOMER DEVELOPMENT
This is where you should be willing to take some chances and see if there is someone out there willing to buy your product. More than buying though, you have to make sure that people out there will use your product. Most importantly, make sure that the general numbers you went through are functional. Basic math like, how much would you have to pay to acquire users, and is it or will it be profitable in future? After going through this and making sure everything makes sense, you get a market fit product. Now is the ideal time to start scaling up your startup.
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USER ACQUISITION
User acquisition is the most expensive of the three steps. If you got this far, you are armed with the knowledge that your product will sell, and you have a business model that is largely functional, you should be able to scale your business model whenever required. It is alright to spend money, within budget, to start advertising and for a few marketing campaigns. It is better to handle this at this point since it can give you a better understanding of your users.