Starting a new business is an exciting yet daunting idea for many, and there is a sobering reason for that – statistically, most startups are bound to fail.
Despite the unique experiences of each business, there are a few golden rules to follow regardless of your product or service.
Here are four key steps on how to launch a startup for success.
Know when to pivot your development approach
For startups, growing is all about proving your place in the market and building revenue. The simplest way to generate revenue (in the early days at least) is by building features based on direct customer feedback. For example, if a customer says “make this blue and I’ll sign a contract”, you make your product blue. As you start to scale, however, business delivery processes, frameworks and tools become more important.
Choosing the right infrastructure can feel overwhelming. Tech leaders often default to practices used in previous roles, only to find that what works at one organisation doesn’t always translate to another.
Ditch the ‘copy and paste’ approach, and instead optimise infrastructure for feature delivery. While this can create more tech debt, feature delivery will have the biggest impact on growing both customers and revenue – tech infrastructure can be cleaned up at a later stage.
Balance customer requests to drive momentum
Once your feature delivery processes have clicked into place, your focus will inevitably shift towards customer experience. A growing customer base that relies on your product may provide some business stability (often for the first time since launch). However, stability is not enough and complacency will kill your business.
With relentless growth paramount, it’s now time to drive the business forward.
As you start to scale, it’s crucial to pivot away from the yes-man approach – making your product blue because the customer likes blue – and think about your product more holistically. Constantly bending to customer requests will serve you to a point, however, you risk creating a “Frankenstein” product that won’t scale easily.
This doesn’t mean dismissing all customers requests – putting customers first should remain a key focus. Instead, look for common themes that connect a number of customer issues and solve them according to priority.
By recognising and solving the underlying gap in your product suite, you can reach a wider customer base and build momentum towards achieving your overall product vision.
Carefully consider your chosen customer base
Cash flow is the number one killer of small businesses. Every early-stage startup knows revenue is oxygen – it keeps you alive.
But what many don’t realise is not all revenue is created equal. As you look at the opportunities to sell your product, it’s important to consider the cost of both acquiring and then supporting different customer “types” – the greater the cost associated with a customer type, the less value your business will receive from every dollar spent.
While it’s tempting to say yes to every customer, you’ll find some can consume far more resources than is worth the ROI. So, how do you choose the right kind of customer when starting out?
- First, your product must meet their needs. When resources and budgets are tight, stretching to accommodate every request a customer makes can take you away from your strategic roadmap and into short-term delivery alone, resulting in the aforementioned Frankenstein product.
- Secondly, assess how long it will take to get chosen customers to the point of sale. It’s easy to fall into the trap of spending lots of time on customers that never quite get to market. Make this call early on and know when to pull the plug if the final outcome looks unlikely.
- Thirdly, consider the resources needed to keep this customer, both during the sales process and once the customer goes live. Some customers will consume every company resource for the duration they’re with you. This can ultimately limit your ability to grow.
Know what success looks like and communicate it effectively to your team
If you ask any high-performing team what success looks like for them, they’ll have an answer ready to go. But how do you get there?
Firstly, you need to define what success looks like. At Airwallex, success is building a global financial cloud that empowers businesses to operate anywhere, anytime. In practice, frameworks can help guide this definition for your business – my preferred method is the Objectives and Key Results (OKR) approach which helps communicate what is important to the business.
Before adding OKRs to every activity, consider how many focus areas are relevant. Personally, I’ve found 3-5 is enough – any more and the impact can become diluted. Make sure you can draw a clear line of sight from your overall company goal to the OKRs. You need to be able to succinctly answer the following: why are we focusing on this activity over another?
Next, you need alignment. It’s critical each team understands what they’re working towards and their role in moving the needle towards business goals. Communication and transparency is everything in achieving alignment successfully.
This can come in the form of weekly meetings, quarterly company updates or using tech platforms to track progress (we like Confluence, Google Drive and Trello).
Finally, measuring and tracking success is crucial.
How can you set up frameworks that track progress towards your goal? Whether it’s qualitative or quantitative, measuring progress means you can celebrate successes and identify areas that need improvement.
Remember, it’s all too easy to track outputs, but what you really need to track is outcomes for your business.
- Craig Rees is VP, Global Head of Platform, Airwallex