If you have a startup you should be obsessed with creating value. If you are just getting going it can be a difficult path to work out what to focus on and where the value lies. This blog should help give you a focal point, allowing you to laser in on the vital aspects that will allow you to create value.
If your startup is at the stage where you are hoping to be acquired then value is likely to be judged on:
• Growth and scaling potential and
• The market you are in
There are two really useful frameworks. If you stick to both or either it should ensure you are building value not just stuff. They are:
• the lean startup framework
• "jobs to be done" for product marketing.
The beauty of both frameworks is that they actually take you away from writing business plans and are flexible. Changes and iterations happen because of discoveries around the market you are in and not just because a potential investor has asked you to submit your business plan.
Lean startup originated from a book by Eric Rees and work by Steve Blank. It should help you eliminate waste and focus on the areas that create value. The aim here is NOT to waste time building something which people might or might not buy.
Instead of second guessing, the lean startup model forces you to build a small amount, then measure and learn. Constant iterating based on actual results (not what people tell you they want or what you think is a good idea).
This link takes you to a free site where you can set up your canvas. If you set aside an hour for a discussion with your co-founders you should get it started. Then you have to force yourself to update it every month or so. There are also extra jobs aside from updating the canvas such as doing customer discovery interviews.
Having been through it, it can be painful. You think you know your product market fit but you actually don't and you are likely to find you have made too many assumptions.
Once you get stuck into customer discovery, i.e. finding out what people would pay for, it should mean you fail or succeed faster. This should mean you don't waste a year of your life creating some beautiful piece of software that people do not want to use or buy.
The canvas should lead you to a clear understanding of your startups' value proposition. The value proposition explains why someone would choose your business over another or where your product offer intersects with the potential customers' desires. One of the best talks I have heard on this topic is by Alistair Croll and can be found here He helps you find the most relevant metric to hone in on with his lean analytics framework.
A recent conversation with Des Traynor of intercom lead me towards the 'jobs to be done' product marketing. This changed the way I am looking at the startup I am involved with. Some people call it milkshake marketing after the first widely publicised case study by Clay Christensen. It forces you to look at other perspectives and for many people 'jobs to be done' involves a mindset change. It forces you to look at our product the way customers do.
Clay Christensen started his research into jobs to be done a number of years ago and part of the motivation is that 95 percent of new products fail. So he thought there must be something that people are missing and, of course, there is.
Christensen would assert that people buy any product to get a job done. The best example he gives is describing market research he and his team did to understand fully why people bought milkshakes. This was after the milkshake selling company had carried out traditional market research and marketing with no success. Clay and his team found people were actually buying milkshakes because they were easy to drink in the car and helped break up the boredom of the morning commute. The company had mistakenly thought people were buying them just because they were smooth/filling, etc. This company was spending money trying to make the ideal milkshake instead of looking at the jobs to be done. I won't delve to deep into this case study if you want to read more look here.
In terms of bringing this back to your startup, if you are telling people about features rather than benefits you are not thinking like your customers. Ultimately they are hiring your product to complete a job for them, i.e. give them more insight into their digital marketing so they can impress their boss. They are not using your product because it has a slick dashboard or colour scheme. In the the startup I co founded, 3funnel, we have embraced jobs to be done. We listened to numerous potential customers to discover what job they wanted done. From this we realised that for one of the elements of our product did not clearly do a job. This is now in re development.
A great example of a company which iterated towards what users and customers want is Twitter. It started as a podcasting company. Was getting very little traction and at a day of brainstorming the founders came up with the idea to push out sms messages to tell small groups of people what you were doing. This got traction but they iterated at all stages according to what people wanted and ultimately do a job very successfully for their users.