How can I launch my business in 5 days?
A few weeks back I was one of the lucky few to participate in Google’s Launchpad programme. Held at Google’s London Campus, it’s a pre-incubator programme for startups.
True to Google’s mantra: “Fail early, to succeed sooner,” the goal is to experience all steps of a typical startup’s first few months within super compressed 5 days. Since 90% of all startups fail within the first 6 months, the motivation behind this programme is to compress the learning from these 6 months into just one week. What follows is a 5-day plan on starting your own business. It’s based on my experience of Google launchpad and spiced up a bit with my own experience in the startup world.
Day 1: Idea.
Aim for today: come up with a business idea.
First things first: your idea. According to Peter Thiel, every startup is based on three main assumptions. They are simultaneously the three main risks you need to hold yourself and your idea accountable to:
- Can you build the product you want to sell?
- Is there a market for it?
- Can you reach this market?
Look at your ideas and test them against the three assumptions. By the end of this week, the goal is for you to be able to answer all three of these points with definite a YES.
If you can give a thumbs up for market (2) and reach (3), but you aren’t sure if you can actually deliver the product then you need to acquire the skills for it (e.g. through hiring, finding another co-founder, or attending the right courses). If you can’t yet answer 2 there is no way you can answer 3. If you have already validated your answers for 1 and 2, you will focus on trying to solve for number 3.
The best way to give yourself a head start on all three is to pick familiar markets for your business. Markets can be familiar to you because of a number of reasons, like the experience you gathered in your current career, or clients who have told you of problems they have. Alternatively, you might have specialised domain expertise in a field of research giving you market insights not many other people have. Or you see behavioural patterns emerging in your social circles which are not yet served for by other businesses.
If you yourself have a problem — and you just couldn’t find a solution for it — chances are others will have the same problem and might be happy to pay you for a solution. A lot has been written about scratching your own itch (most notably by Paul Graham), so this week your goal is to move it to the next level.
Before we start, let’s get into the right mindset for what will lie ahead: Don’t think of it as building a business, think of it as running an experiment.
Why is starting a business a bad idea? The concept of starting a business comes with a lot of mental overhead: A business needs cash flow, some kind of a business plan, to fulfil health and safety regulations, to be registered, trademarked, and tax reported — in short, there is a lot of administrative ‘stuff’ packed into the concept of business.
Stuff you eventually all want to have, but it’s not the place to start. All it will do is distract you from what really matters: building a product that people actually want.
So why the mindset of an experiment? The goal of an experiment is to prove a theory you have (e.g. will people buy my product at X cost so I can make at least Y profit?). Experiments are run in a controlled environment so you know why, when, and where they fail.
When you run an experiment the possibility of it failing is built in from the start — if it fails the theory you had is either invalid or needs adjusting, in which case you run a new experiment.
And finally, experiments need to be repeatable (can I get customer X to buy again in one month’s time, generating a recurring revenue stream?).
By getting into the experiment mindset your focus shifts from admin to product and from planning to decision making. This allows you to move forward with the core value proposition of your business and test it against the market quicker.
Days 2 and 3: Idea Validation.
Aim for today and tomorrow: validate the market.
Yesterday you came up with a business idea, and now we are ready to run the first experiments. The first thing you want to do is validate if there is a market for it.
User Research & Getting First Customers.
Having a direct relationship with their customers is one of the main — if not the only — advantage startups have over big businesses. You need to find out where your customers’ pain points are, what they would do with your product, how they see your product, when they use it, how they use it. For a great resource on this, check out Rob Fitzpatrick’s book ‘The Mom Test — How to talk to customers & learn if your business is a good idea when everyone is lying to you’.
According to Sam Altman, one of the strongest indicators of a successful startup is how tight they make the feedback loop from customer feedback to product decisions. As soon as you have your first customers you need to connect with them personally and find out what it is that they like about your product, and what it is that would make them recommend it to a friend.
So how do you get your first customers? If you are selling a consumer product and you have it already, make the first sale. Go to a market and sell it. When you make a sell, talk to them.
You want to narrow down your target audience and understand where they are coming from.
You don’t have a product yet? No problem: in an ideal scenario you should be able to validate if the market exists before you even put energy into building it. For example, you could make a simple landing page and get people to sign up for it.
There are great online tools to help you to do that: use trycelery.com to collect pre-orders, use launchrock.co or strikingly.com to collect email addresses, use squarespace.com to setup a simple online shop, or picatic.com and meetup.com to crowdsource your event and find an audience.
Once you have a landing page start by creating some social media buzz around it (Twitter, Facebook Pages, Blog). Because you only have two days advertise it on Twitter, Facebook, and Google AdWords that way you can generate a lot of traffic in short time and see if people would sign up for it.
If you are in the B2B business, check out the founding story of Optimizely and how they found their first customer without even having a product or sales pitch.
Once you have confirmed your value proposition through a landing page and ideally your first sell it’s time to offer something to your first customers. This will be your minimal viable product; your product’s value proposition wrapped in the thinnest possible layer of effort boiled down to its essence.
Your resources are limited, and again the more experiments you can run, the higher your chance of having one succeed. So you need to minimise money, time, people and effort needed to produce the first iteration of your product.
Make a list of all the features you want for your product. Keep this list safe, because you want to be able to come back to it later. Once you have your ideal feature set organise them into three groups:
- Core features
- Major features
Remember we want to minimise any effort. So it’s a no-brainer to kill the nice-to-haves right away for your MVP. Next, we need to get rid of the major features. Think back to the experiment mindset — experiments happen in a focused and controlled environment so you know why they fail. For your MVP this means focusing on one core user story. Get a clear idea of the kind of person you want to sell to. Your MVP will support this one core customer — that is only what matters to them and nothing else.
Don’t be afraid to cut features, undershooting an MVP is a lot better than overshooting it — you WANT to be in a position where your customers are asking for more!
Your MVP is for testing one thing, and one thing only: your value proposition. If your MVP fulfils your value proposition and there is demand for it, no matter how basic your first iteration is, it will work for early adopters. Early adopters are all you need to validate your business idea and to start the direct customer relationship that will give your startup that competitive advantage it needs.
Day 4: The Perfect Pitch.
Aim for today: be prepared to pitch your business anytime to anyone.
On day four at Launchpad, we had a coaching session with corporate storyteller extraordinaire Donna Abraham. No blog post can do justice to either her amazing work or the energy she brought to the room. If you have a chance to work with her I can only highly recommend it!
As an entrepreneur, you have to be ready to pitch your idea whenever, wherever, and to whomever — you never know who you might encounter, anyone from your next super user to a possible angel investor. Donna suggests to always have the following three pitch formats ready to go without warning:
- Elevator pitch (~5min)
- Handshake pitch
- Eye blink pitch
To put your pitches together you start from the 5min pitch and then work your way down to the eye blink pitch (great example: 1000 songs in your pocket — Steve Jobs pitching the iPod).
Why go through the trouble of being pitch ready at any point? Donna was very clear on this: first impressions matter — simply because there is no second chance for a good first impression.
When presenting with slides, make sure your slides look great. Your slides reflect your product and your company.
Don’t commit sui-slides: only ONE big idea per slide.
It’s biologically nearly impossible for humans to listen and read at the same time. The more text you put on your slides the less your audience can pay attention to what you are saying!
And it’s all about them: your audience. When standing in front of an audience, you have to get your energy up. You have to go 20-30% beyond your normal energy levels. It might not be your natural state, but you have to bring the audience in! Connect to your audience: your eyes are the best weapon, make eye contact with one person for one thought and then move on to someone else.
The audience wants you to be their next big love story so BE LOVEABLE and PASSIONATE. Dress smart. They don’t care that you didn’t sleep all night. They don’t care you were stuck in traffic. They don’t care you just had a fight with your partner. You must, must, MUST be your best.
Butterflies? Don’t fight it. Face it. Embrace it. And look forward to it, they are part of the fun. It’s your body preparing you for the big moment, making sure you are alert and ready.
Fortunately for us every 5-min pitch follows a core structure we can lean on:
Start with the problem you are solving. It’s best to start off with a story that your audience can identify with. That way you can trigger empathy. You want them to feel the pain your customers are going through before they find your product.
Focus on the main pain you are about to solve. Think of a villain your startup is dealing with (commodity prices, boredom, finding the right information, unhappy at your job) and build your story around it.
For example: “Before I tell you everything about Homejoy, let me tell you the story of Sally — one of our customers. Sally hosted a huge surprise party for his best friend last night. Her house is a mess. And her regular cleaner just cancelled last minute, because she isn’t feeling well. What is Sally going to do now?”
Your audience is feeling the pain, they are identifying with Sally. Now it’s time for the reveal: your product. All solution slides follow a clear logic:
We do X for Y by Z.
Make it clear, simple, and to the point.
Next, you want to demo your product, to prove it actually is the solution you are promising. It is very easy to lose your audience during the demo, your presentation switches to a different program, your language changes, software needs to load, things might be hard to see in the back. This part needs a lot of rehearsing.
Walk your audience through the product as if they are a first time user. Make sure you explain the typical use case and show them how you solve it. Live demos have the tendency to fail, crash, or otherwise break. So always have a video as backup if the live demo dies. Generally, it might be better to have a demo video in the presentation and you simply do a voice over. That way it can be presented fluently, you can prepare it well, you can cut out unnecessary loading time, and no last minute updates or changes can cause a demo death.
Ok, you solved a problem. So what are you charging for? Freemium is not a business model. Hacker news has a list of all possible business models, just pick one and test it. If you can create a revenue stream with it, the test was successful — otherwise show which others you are planning to test.
Also show them you know your market: who are your competitors? Who is out there? The big ones, the small ones, the odd ones. What’s your differentiation?
This is especially important when pitching to investors: What makes this the right moment for your product? Give them news articles, spending growth figures, or info on a big competitor who just got acquired. Shock them with new exciting facts. Everyone knows the mobile market is big, and that big data will disrupt every other industry, so be specific and concrete.
Give yourself a moment to introduce your team. This will give your venture credibility. Simply show your teammates’ names, titles, and their key credibility for the role.
Don’t just kill it. ‘Thank you for your attention’ is killing it. You want to make sure you leave your audience with a great taste in their mouth. End with inspiration. End with a number, a vision, something humorous, or a great quote.
“If you never want to be criticised, don’t do anything new.”
– Jeff Bezos
Day 5: Launch.
Aim for today: start growing your business.
By now you should have an idea, with a tested market, and an MVP with its first users.
Yesterday you prepared the perfect pitch, use this now to spread the word. The team behind GrooveHQ have shared some of their best strategies to reach the first 1000 customers. Here are some launch strategies you could pursue:
- Submit your startup to producthunt.com and engage with the community there.
- Post your product to Hacker News by writing a Show HN post.
- Reach out to bloggers who cover your market and are read by your target audience. Let them try out the product so that they can review it for their audience.
- Tell your story on how you got where you are today on Medium or Tumblr and reach like-minded people interested in what you are doing.
- Create a Twitter account and a Facebook page to share your story and your progress with the world and engage with your users.
This is the end of your 5-day sprint. You’ve come up with an idea, found your first customers and tested your MVP in the market. If you haven’t gotten enough traction yet, go back to day 1 and repeat. The good news is your experiments might fail often, but succeeding, you only need to do once and you got yourself a business!
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