What’s the difference between a high risk (+ costly) vs. low risk startup creation process?
Take a look at this framework.
Without getting into unimportant details, the business model of a startup is intended to be eventually scalable thanks to technology while the key factor in small business growth is expansion by opening up new locations and hiring more employees.
Let’s put it this way, WhatsApp only had 55 employees when it served 420 million active monthly users before it got acquired by Facebook for over $19 billion. Now imagine how many locations and employees a company like McDonalds, Chase Bank or Walmart needs to serve a fraction of the users WhatsApp had.
WhatsApp can do it because most of the work is done by technology: things are automated and customers’ needs are addressed 24/7/365 without human interaction.
There are many reasons entrepreneurs want to start startups. A few of the biggest are to achieve this scalability of serving a large group of people, making a much bigger impact and potentially selling the company for unbelievable multiples.
About those multiples, why is it that many unprofitable startups get hundreds of millions of dollars in funding, sometimes, get millions or billion dollar plus acquisitions and many can even go public with huge losses on their financial statements?
This deserves a guide but the short answer is, just like any type of business, revenue is not the only valuation criteria. In the case of startups, entrepreneurs and investors expect to create disruptive innovations which take time and money so people are betting for the widespread adoption of this innovation or trend even if the numbers don’t add up today.
In other words, as long as you prove that you are solving problems worth solving with a solution that’s proven viable and valuable for the user, if your end goal is an exit whether it is through acquisition or IPO, investors, potential acquirers and other key stakeholders will help you get there even, again, if the numbers don’t up today.
I wrote, as long as you prove that you are solving problems worth solving with a solution that’s proven viable and valuable for the user…
How do we solve the right problem and build the right product?
Now, back to the above framework.
Focus on this part.
Here’s how it goes:
- Entrepreneurs are confident about their ideas because of the success of similar products or their years of experience in the field.
- They conduct some research, ask around and then go straight to listing all of the features they want in their app.
- They build it if they have the technical expertise or hire a web development company to get it done.
- 12 months later, they launch.
- They gather user feedback and realize they need to go back to product development and make major changes.
- They spend months refining the product and launch again.
- They gather feedback, only a few if any use it.
- While most entrepreneurs quit here, if they have the funds and perseverance, they poor more money and time into it and build again.
- They launch a few months later and either hit it right this time or build again.
- In many cases, they have to iterate or pivot completely from the initial plan.
- They keep going in circles until they solve the right problem and build the right product.
Most entrepreneurs strongly believe that without a beautifully designed and advanced application that can serve hundreds of thousands of users since day 1, we don’t have a startup.
Most entrepreneurs build startup ventures with a small business mindset. Think about it, if you’re opening a restaurant, you need a location, machines, employees, food, menu, licenses, etc. For most startup founders, the location, machines, employees, etc. are equivalent to building an app. We need a good app to start just like we need a nice looking and clean restaurant with good food to start a restaurant.
The truth is different. While small businesses can be started and scaled with a startup mindset, the opposite is mortal to startup ventures.
What’s a startup mindset? Take a look at this part of the framework.
Here are a few key differences:
- Unlike the first approach, this has many small stages (see the short lines).
- The journey starts with one single hypothesis: 1 customer profile and 1 pain point.
- A product is launched quickly to test the riskiest assumptions.
- Revenue can be generated as soon as the third month, sometimes sooner.
Here are a few startups I’ve helped master and successfully implement the same process to launch and grow their ventures.
While this summary is overly simplified, it shows you how The Startup Lab will help you take an idea to first paying customers and beyond by minimizing risk, increasing success predictability and helping you generate revenue quickly.
You’ve decided it’s time to take action or make a radical change. What’s next?
Let’s say you decide to do it on your own. Every strategy and direction seems like it can work but the limited time and pressure of uncertainty and failure end up taking most of your energy to a point where “doing nothing” is now an option. After all, time is money and the opportunity cost from doing things that don’t work even if something ends up working a few months later is almost always higher than doubling down on what’s helping you generate the highest income and impact from your current job or small business.
Let’s say you decide to hire a development team or freelancers. You spend weeks short-listing applicants and reaching out to agencies until you find who you believe is the right fit for the job. A few months go by and the product isn’t as close as half complete. You’re asked for more money, more time, you’re frustrated, they’re stuck and nothing tangible gets done. This is a very common scenario and chances are, if you’ve never hired a product development team or don’t have tens of thousands of dollars (perhaps $100,000+) to hire the best teams, you’re going to fall into this trap.
Even if things go well, a good product doesn’t necessarily mean a successful startup and if you don’t have a path to market plan that’ll prepare for launch, get customers excited and eager to use the product, it’s as if you didn’t have a product.
So what’s the most time and cost efficient way to score small but tangible and valuable wins while increasing certainty and success predictability of your plan from idea to first customer and from first customer to the 100th biggest fans and beyond?
We Start With a Roadmap
A roadmap provides you with a clear direction from idea to first paying customers. It shows you how to combine key resources to get customers’ problem solved quickly so you can get paid and validate quickly. It helps you avoid building too much too soon which significantly reduces your initial investment whether it is in app development or marketing while increasing your startup success predictability.
A roadmap also helps you focus which tends to be the hardest thing to do especially in the beginning when our ideas are endless. It sets clear expectations in terms of what needs to be done and what will come out of taking clear and consistent steps within a predetermined period of time.
Here’s how it will work
- You schedule a 20-minute free guidance call that’ll also be used to see if there’s a good fit. Pick a time that fits your schedule here. The more details you provide in the submission questionnaire the more valuable the call will be for you.
- If there’s a fit, I will send you the registration form and a link to schedule the first deep dive hour-long call within 5 days.
- Two weeks after the deep dive session, you will have a roadmap that will cover:
- How your initial solution (MVP) should look and function
- How to find and attract the first or next paying customers
- What you should specifically focus on in the next 3 months
- Analysis and solutions to any challenges you are currently facing
- How much it will cost to build the MVP and how long
The roadmap is the most critical part of anything we do to help entrepreneurs start and scale. It’s helped numerous founders not only define clear action steps towards their goals, but also, it’s saved them months and tens of thousands of dollars in personal fund allocation that would have gone to waste.
Price: $3,500. This amount is then deducted from the app development estimate if you decide to move forward with execution. If not, you have a clear plan of action that will take you to your goals with a higher probability of success of your startup.
Timeline: 3 weeks
Current capacity: 8 entrepreneurs
“Abdo, it has been a fantastic journey. I am quite excited for what we have achieve to this date. Leveraging the knowledge that you have managed to provide on SkillTalk has made a whole lot of difference…”
Let’s start with a free guidance session
Sometimes it only takes a quick conversation to make a big difference. Schedule a call and we will figure out the best action plan for you and if there’s a fit in working together to move things forward faster.
At the very least, you’ll spend 20 minutes learning something new.
“Thank you greatly for the information you shared and the time you took in getting to know a little about me and the businesses I’m preparing to launch. I was feeling overwhelmed and what you shared was the right information at the right time. Very clear and completely doable.”
Digital Design, Marketing & Technology Consultant