How often have you encountered a promising startup only to find out a few months later that it has ceased to exist? Their websites are filled with farewell essays, or “post-mortems,” where executives express their regret and explain their failure, ensuring customers that refunds will be provided soon.
The lack of market demand is the leading cause of startup failure. Remember those expensive juicers that faced criticism when customers realised they could manually squeeze their personalised juice packs? Similarly, the notorious Bodega vending machine designers met a similar fate because they insensitively viewed brick-and-mortar bodegas as a nuisance rather than a source of income for small business owners.
While conducting early market research and understanding customer needs is crucial for a startup’s survival and success, this article focuses on the technical aspects of building a startup that can overcome challenges.
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Prototype in the early stages
Starting your business doesn’t require developing a functional prototype. However, understanding the true purpose of a prototype is essential.
A prototype is a simple user interface that allows your audience to interact with your product visually. It can have some functionalities. With tools like UXPin, Axure, and many others available today, creating prototypes has become more straightforward and adaptable.
Early prototype development brings several benefits:
Presenting a prototype to investors: When you have a creative app idea, it’s easier to demonstrate its functionality to investors rather than describe it verbally. Impress your initial backers with a plan and a flexible working approach rather than just an idea. Utilise specialised software and showcase a fully interactive screen on an iPhone without writing any code.
Conducting analysis and investigation: If you need more technical expertise, creating wireframes that make sense can be challenging during the brainstorming process. Prototyping allows you to turn your idea into a tangible object and understand the necessary screens, actions and alerts for your product needs.
Obtaining user feedback: Regardless of how thorough your market analysis is, the best way to understand your customers’ interests is by showing them how your product will benefit them personally. Gathering rapid feedback before the development phase helps you avoid creating unnecessary features. However, testing and UX analysis of a working product is still essential.
Simplify development by following the Lean Startup approach
There is no one-size-fits-all template for startup development. To increase the chances of your startup’s survival, use the Lean Startup approach and leverage the knowledge you gain to make continuous improvements.
The Lean Startup methodology follows a build-measure-learn cycle, efficiently utilising resources and feedback. Instead of relying on assumptions, build a minimum viable product (MVP), learn from it through input and KPI tracking, and continue this cycle until you fully understand your audience. Use this knowledge to design a successful product.
Reduce uncertainty: The Lean methodology enables you to make assumptions, maintain flexibility, and regularly evaluate your vision using tools like the Business Model Canvas in the uncertain startup environment.
Work smarter, not harder: Instead of focusing on creating a product, consider whether you should build it and how to make it sustainable. Save time perfecting a product that may not initially interest your potential audience.
Create an MVP: The build-measure-learn cycle relies on an MVP. It is the key to observing and learning from user interactions, allowing you to focus on essential elements for testing and attracting customers and investors.
Validate through customer feedback: Focus on meeting your customers’ needs to demonstrate your startup’s growth. Continuously modify your plan based on customer feedback and be prepared to change course when necessary.
Build a strong startup team.
Early versions of successful companies like Slack, Skype, GitHub, and Google utilised outsourced development. While having in-house developers is advantageous, not all startups can afford to hire experienced programmers initially. Outsourcing technical labour provides several advantages:
Cost reduction: Outsourcing can reduce operational costs by up to 60%. You can find talented programmers cheaper by leveraging offshore staff, even when factoring in travel expenses, communication issues, or additional management.
Access to knowledge: By expanding your skill pool and seeking specialists in your sector, you can tap into expertise beyond your local suppliers.
Focus on growth: Outsourcing technical tasks allows you to concentrate on making crucial decisions, generating new ideas, and focusing on your core competencies. Give the technical details to an external team and improve your business.
To ensure successful outsourcing, set clear objectives and benchmarks, make informed decisions based on word-of-mouth recommendations and B2B rating websites, and maintain in-house management of interactions with contractors.
Start with scalability in mind.
Failing to plan for scalability can lead to the downfall of startups. The Social Radio, an app that allowed users to listen to tweets, experienced scaling issues and ultimately failed because the founders needed to prepare to maintain and scale the software.
Before scaling your product, consider the following:
Analyse rising potential: Determine whether your product can expand its customer base and become more valuable to a larger audience in the future. Consider potential additional funding sources and envision your startup’s future state in three to five years.
Invest time in your business setup: Ensure you have the infrastructure for scalable growth before hiring employees. Automate processes, utilise software for financial management and establish a solid foundation to streamline the scaling process.
Expand horizontally: Instead of trying to grow vertically by targeting new clients, focus on gradually expanding your services, workforce, and geographic reach. Test your approach with one group of users, then adapt it for another group while learning to personalise service for both. This gradual approach ensures controlled growth.
Eliminate unnecessary elements: Don’t let your tasks and operations grow indiscriminately as your business expands. Continuously replace or eliminate old processes with new ones to maintain efficiency and avoid slowing down your progress.
Prioritise the needs of the consumer.
Great ideas are only meaningful if they create an exceptional customer experience. Providing outstanding experiences sets you apart from competitors and cultivates an engaged and vocal audience. Research shows that 25% of customers switch to a competitor after just one negative interaction.
Follow these three steps to create a customer-centred organization:
Observe the customer journey: From initial awareness to onboarding and transactions, understand the journey. Use analytical tools and metrics to identify what matters most to your audience and maintain a high standard throughout the process.
Shape interactions based on feedback: Apply the Lean methodology and continuously improve customer interactions based on feedback. Utilise technology to personalise the customer experience according to their input.
Perform with a user-centred mindset: Make customer satisfaction the cornerstone of your company. Align your operational procedures with the customer journey and equip your staff to meet customer expectations. Connect customer success measurements to your company’s goals and employee KPIs.
Configuring an effective feedback loop
An iterative approach is crucial for startups, and your audience’s feedback enhances the build-measure-learn cycle’s learning phase. Utilise various channels to communicate with your users effectively:
Crowdfunding platforms: Engage with your target audience and gather insights on their interests and challenges. Crowdfunding platforms allow you to showcase your prototype and MVP, attract investors, and receive feedback. Choose a platform where your target audience is active and related projects run.
Analytics for apps or websites: Even when users are not actively communicating, analytics tools like Google Analytics or Kissmetrics provide valuable insights. Analyse user behaviour, identify pain points and optimise your product based on data-driven observations.
Comment sections: Enable visitors to provide feedback as they browse your website. Use simple forms to encourage users to express concerns and present issues without the need for direct email contact. This allows you to respond to potential customers and address unanswered questions.
Social media: Engage in open discussions with your customers on social media platforms. Monitor mentions, respond to inquiries, and gather insights about positive and negative experiences related to your product.
Surveys: Create engaging surveys to understand consumer opinions, segment the market, or prioritise features. Ensure your questions have a clear purpose and provide valuable answers. Time your surveys appropriately and avoid burdening users with open-ended questions.
Usability testing: Observe how users interact with your product and identify areas for improvement. Usability testing helps you uncover design flaws and optimise the user experience. Use the obtained information to refine your product.
Customer advisory board: Leverage the expertise and feedback of executives from client firms and loyal customers. A consumer advisory board can provide valuable insights and recommendations. Hold regular meetings to discuss strategic adjustments based on their input.
Be adaptable while maintaining your values.
Startups require discipline and strategic planning, but they also thrive on passion. Don’t let excessive focus on competitors hinder your progress.
Many startups have failed due to inflexibility. When customer input points to a new direction, be adaptable and make necessary adjustments. Embrace change if it enhances the customer experience and drives growth. Keep your team focused on the desired outcome by providing access to relevant metrics. Streamline scalability from the beginning and validate your assumptions early to ensure a market for your product.
