Shared for startupsYou are launched is working with Accelerators, VCs, and Startups since 2014. Software development is the basics. Major part of the teammates have come from this direction. Such a symbiosis of experience and expertise allows us to solve startup issues.
Product / Market FitProduct/Market Fit means owing the product that satisfies the market. In other words, owing the desired product. There are 5 stages that any Startup needs to go through:
Sure, the majority of start-ups are ignoring this. But to override startups who are in 99.7% zone you can scale your product only in the last 2 stages.Lets deep into every stage of your future product lifecycle:
- Revenue and Scale.
According to Steve Blank, the first three stages are the most important part for startups. He calls them “Customer Development”.Probably, you have heard successful techniques and patterns such as:
- Empathy - I’ve found a real need in an attainable market. My product satisfied the market. What is more, I know how to solve the problem to adopt users and make them pay.
- Stickiness - I’ve developed the product that makes users be after it.
- Virality - My user database is growing organically and in vitro.
- Revenue - My viable business can grow in a healthy ecosystem with the right margins.
- Scale - My viable business can grow in a healthy ecosystem with the right margins.
- A/B Testing,
- SMM & Referral Optimisation,
All of them are about optimisation and not innovation. That’s the main reason why we are not suggesting to work on scaling. You need to:
In this case, your startup will have success. Like some we are highlighting in You are launched blog.
- connect analytics,
- review the behaviour of your customers,
- try new approaches.
User’s Dividing of any ProductThere is no matter what type of product you are working on. All users (or customers) will be grouped based on their characteristics and behaviour to your “problem-solving solution”. What is more, they will behave to your updates and changes that are led by new technologies. All startup customers can be divided into 5 groups:
Innovators (2.5%) - Customers who are willing to try innovations. As a rule, Innovators:
- early adopters,
- early majority,
- late majority,and
These users are the key for any product launching, as they are tolerant to a system that can fail from time to time.
- can take risks of defects/bugs
- can have high financial lucidity
- are youthful
- related to the highest social class
- are keen to innovations
- are keen to related resources
- are in good contact with other innovators
Early Adopters (13.5%) - Current group has the highest degree of opinion leadership among any other. As a rule, they:
They are more selective in adopting choices than Innovators. Realising that their choice influence on central communication position in society.Early Majority (34%) - Customers/Users in this group adopting after a varying degree of time. The adoption time is much longer than for Early Adopters or Innovators. They are generally slower in the adoption process. So, you would need to spend more time and resources to get them. The social status of the Early Majority is above average. They are in contact with Early Adopters and could be opinion leaders in society.
- are younger than Early Majority
- have strong financial lucidity
- have advanced education
- have quite high social statusand
- have more valuable social impact than Early Majority
Late Majority (34%) - Once you will get half of your market, Late Majority will start joining your product. They will react to your idea/app with a lot of skepticism even after half of the market is covered. The current group has below average social status. Also, they are in contact with Laggards and Early Majority. They have very little financial lucidity and don’t have leadership opinion.
Laggards (16%) - Customers in this group are the last in innovation adoption. They almost don’t have opinion leadership (or don’t have at all). Feeling antipathy to changes and innovations and are advanced in the age. As a rule, they:
And now, let’s put all them into Product Adoption Life-Cycle Chart:If to clean it up, the chart would look like this:Unfortunately, such a chart is an “ideal life-cycle model”. In real life, there is a huge gap between the Majority and the first 2 groups. It is also known as “Chasm”. That’s the main point of scaling. And that’s one of the main issues why startups are not able to scale. As a rule, they are trying to provide a solution for the Majority at the very beginning of own path. But they have no funds (fuel) to pivot and cover them all. To jump over this chasm your startup needs to Identify Visionaries and Pragmatists. In this case, you would be able to:
- are focused on traditions
- have the lowest financial fluidity
- have lowest social status
- are oldest among the audienceand
- are in contact with family and close friends
and much more.
- figure out different marketing strategies
- positioning of your startup/product
- targeting audience
- distribution channels
Agile for Startups?Majority of all development firms positioning that they are Agile. They are working with "Tickets", "Backlogs", "Sprints", and much more. It works well for Medium Business but not for Startups. Launchers are sure that Agile is a least required methodology for startups. Unfortunately, it has incomplete management method. The tight work with Lean Startup allows to meet the Startup world and their demand. Here is how the majority of well-known methodologies intersect with each other. Moreover, it answers on a question, where popular technologies and startups are?
The Lean StartupThe Lean Startup Methodology allows to:
- drive own startup
- sort out when to pivot
- how to operate
- when to maintainand
- how to grow startup to a business with the best acceleration
The Lean Startup means usage of scientific approach in startup management and development. It allows to launch the desired product to your customers asap.
The major part of all startups is launching ideas that THEY think users/customers want to have. But that’s not the worst point. The biggest mistake is spending years polishing out the product without launch. As a rule, once the product is polished out, they fail. Because they never talked to their own users. They don’t know what customers are interested in and what they think about their “problem solver”.
The Lean Startup methodology cuts the Agile approach from the very beginning. It says, that every product or app that startup is working on is just an experiment that allows answering on such questions as: “Should I build such a product?”, “Is there a demand on the market?”, and “Would I be able to build a business around this product?”. So, the experiment/startup itself is not a theory, it is a clumsy first product. If even such product successful, you can start with such campaigns as:
- sorting out Early Adopters
- adding employees to each iteration or any next experimentand
- start building a robust product
The main goal is once Robust Product is launched, it will have already friendly customers. Such experiments would allow to specify what exactly needs to be in a Robust product.
The essential behaviour of any startup is being able to transform its own idea into a product. Alongside with this, they need to:
- measure customer responses
- review responsesand
- pivot with a feature/function or keep it
That's why the Build-Measure-Learn loop is the core of the Lean Startup Methodology:
- sorting out potential customers problem to solve
- launching MVP to be able to start measuring asap
- review users/customers behaviour and feedbacks
Once your MVP is launched, your startup can work on updating and polishing it. All these should include metrics to learn and, what is more, they will show you cause and effect questions.
Hockey StickAs a rule, Startup’s life-cycle visualised on the chart as Hockey Stick. It describes all expenses and profits during all product life-cycle. Once the product gets to the market the profit can cover R&D (Research and Development) expenses. Analysing product life on the market, you should forcast returns on their investment. That is what Product Lifespans means. The classic chart is called Hockey Stick and it looks like this:Unfortunately, Startups Hockey Stick looks like this in real life:Besides User’s Dividing, startups' life-cycle has 4 particular stages, such as:
R&D (Research & Development). During this time startup:
- hires engineers
- registers intellectual property
- works on MVPand
- pivoting updates
During this stage, any startup needs to take risks and invest in innovation.
Ascent Phase. This stage takes a time slot from invention/innovation to the investment return. The main aim of this period is to see a "jump". The jump is a boosted growth from innovation up to a strong competitive advantage of a new and effective digital product.
Maturity Phase. Once your innovation becomes well known by the majority of the targeting audience. Now, competitors enter the market and the offer outpace demand. During this period, investment return slows down as the idea concept becomes standardised.
Decline Phase. It is the final stage. The potential value and utility are changed with manufacturing & updating. Product sales start to dive down.Keep your attention to where the Startup place is. After this stage, a startup can’t be called a Startup - it becomes, a company. That’s why IPO is made for startups after rapid growth. In case you are want to know more about the investment in startup’s life-cycle, check the chart below: