Who is going to be the next unicorn? Everyone always want to know. You hear news stories about them all the time -- these mythical companies that seem to appear from nowhere, bolstered by massive funding rounds and billion-dollar valuations.
Stories of unicorns can easily discourage the entrepreneur who is just trying to get his business idea off the ground.
Startups, take heart. Those companies might be making headlines today. Just because a company raises tons of money does not mean their product is any good. You can pour millions of dollars of other people's money into a company and still fall flat on your face if no one wants to buy what you are selling down the line.
This misplaced focus on chasing down funding can become a massive distraction for founders. It takes them away from what should be their first order of business -- figuring out what will create real value for customers.
I have been fortunate to found and build a few companies. I have learned that it's often best to ignore stories that tell the tale of lottery winners and focus on creating a bit more enterprise value every day. But that's not easy and it's easy to get a bit starry-eyed.
So, do you know the one sign to look for that your startup will be a BIG success?
I have learned from experience there is one sign that matters more than all the others. And it definitely is not your ability to raise early capital. It's about money, but the cash comes from customers.
When you identify what a significant number of customers are actually willing to pay for, then your company has a good shot at making it. Once that happens, you have the sign that your startup will be a star.
Here is what I have done to make sure that has happened. I hope you benefit from these suggestions as well. You should:
Get your goals in order
Begin by taking a goal-first approach to your business. Nail down what you want to achieve and plan out how you will get there. Give yourself realistic milestones so you can keep track of your progress against those goals. Then hold yourself to the goals that you have set, and consistently revisit them to make sure you are not veering away from your objectives.
Experience the customer's pain
You cannot build a successful company if you do not intimately know who your customers are, what they are trying to achieve, and the daily roadblocks they face. That means listening more than you talk and putting aside your own agenda of what you think might be useful. You might start with a hunch, but you need real evidence from real users. Then you can deliver product tools that are aligned with what they need and want.
Solve one simple problem
Once you get close to your customers, you may discover a whole array of problems you could tackle. That can be overwhelming, especially if you take on too many problems at once. Instead, keep it simple. One of my favorite sayings is "this one first, the next one free." It is better to deeply explore and solve just one problem at a time. When you maintain a tight focus on one problem, new problems will naturally come to light that you can solve and create value around as well. This is why we target helping product managers create visual roadmaps.
Stay humble
If massive rounds of funding do come your way, that is great news. However, it does not mean that your responsibility ends. When you have investors, you have more money at your disposal but more people to answer to. Remain humble, be responsive with your customers and what they need, and keep your feet on the ground.
It takes more than money to build successful companies that have longevity. So do not trouble yourself with the news of the latest billion-dollar unicorn that investors are betting is their next home run.
Figuring out what people will pay for should be your number one goal. Once you have that answer, you will be well on your way to success. It is an accomplishment few startups attain -- and one you should be proud of.
That is one story that rarely makes headlines, but is definitely worth telling.