National Entrepreneur’s Day – Top 5 Startup Tips

Some entrepreneurs believe that they need to raise funding from angel investors or venture capitalists in order to build a great product and launch. Unfortunately, they never attempt to build a prototype or first version of their product, and eventually, someone else beats them to market with their idea.

While some products, services and industries require a large amount of capital investment – machinery, plants, automobiles, etc — most actually do not.

Instead of trying to build the entire product, launch the retail clothing store, open that beautiful restaurant, or out-do the next app, try to launch a series of test ads on Facebook, Instagram, Google Ads or another heavily trafficked website to determine the overall market size, potential interest, and projected revenue that you might be able to command for under $500.

Most great companies were built from market hunches, but they all started out small, and were essentially “proven” or “disproven” with a series of tests that guided the founders in various directions. These directions could be price related (increasing or decreasing price for a given item and market to determine the overall willingness to pay of a particular customer group), or were feature set or solution related (tweaking the marketing copy to determine if a given consumer or business group were interested enough in clicking on the ad and signing up). The key is to test, test, and test some more until you determine (before building a startup company), what the overall market dynamics and demand are for your product, service or experience. For example, instead of launching a new restaurant in your town, instead, take out a few ads on either Yelp®, Google Ads® or Facebook® to determine how many people are potentially interested in your new type of cuisine. Run the ads for a few weeks, without charging anyone upfront for anything naturally, and based on both the impression volume and click volume, you can get a good sense of the demand. Should the demand be strong enough, it might warrant further tests or possibly launching your new restaurant.

The key is to have the market prove its demand to you before you even launch; not the other way around.

Imagine coming up with a good idea, and through user testing and running pre-sale ads, you determine that there is a potential market for your new service. Instead of talking to customers and soliciting their feedback next, you instead, go spend the next 3-12 months building the service, launch it, and then crickets — poor results hit you like a sack of bricks.

What went wrong? The problem was, was that you never truly spoke with and listened to customer feedback. Why? Because it was time consuming, frustrating and boring?

Customer feedback is the secret gem of all innovation. The challenge is, if you approach it in a salesman’s typical way — trying to sell them on your ideas — you end up doing it wrong. Instead, listen without judgement. Ask “Why” 5 times to each statement to uncover deeper insights. For example, she says “I don’t really need to re-order this item that often”, then instead of you saying “Well, how about if we lowered the price by 10%, would you re-order?”, you say instead, “Why?”. Then, she explains other issues that led up to her decision not to re-order, which have nothing to do with price being too high. In fact, it had to do with your slow shipping time as she needs delivery within two days, instead of five as you currently do. By asking “Why” 5 times, we peel back layers like an onion, uncovering the core problem that’s being masked by other superficial elements. After you have solicited at least 50-200 people’s one-on-one feedback, you then implement the feedback into direct actions and build out solutions to remedy the root causes.

By asking “Why” 5 times, we peel back layers like an onion, uncovering the core problem that’s being masked by other superficial elements.