Three things you need to get a product that flies

“We now know 10,000 things that won’t work, so we’re that much closer to finding what will.”      - Thomas Edison, on developing the light bulb.  

By now, you know that your idea will solve a real problem and customers will use it.  It’s time to build the right product. My experience thus far is – this is the single hardest thing about running a start-up.  Unfortunately, there’s still an unknown quantity in my formula and I’m still trying to discover what this is!

At Posse, we’ve still not discovered the absolute right product to make our idea fly, but after five builds of the website we are getting much closer.  I’ve worked out some of the key factors in getting closer, and when I find the make-up of the unknown quantity I’ll be sure to let you know!

Here are some key factors I can tell you about:

t : Team’s ability to innovate.  Building the right team is the second hardest thing about running a start-up.  I’ll talk more about how I’ve built my team later, but they’re the most awesome start-up team in Australia.  If someone is going to solve the problem we’ve identified, then it’s going to be us!

m : Money and time.  Money buys you time.  Sometimes, it takes many attempts over a long time to hit the right product.  Very very few products take off overnight as portrayed in ‘The Social Network’.  Consider that Twitter launched in January 2007 and didn’t start to gain traction until mid 2009. Groupon was originally a failed  business model that encouraged groups to form for philanthropic ventures, TurntableFM was a failed barcode start-up called StickyBits.  It floundered for years before the team spun round to create TurnTableFM in 2011.  The founders of AirBnB reportedly lived on cereal for two years after launching their company at SXSW in 2008, before it took off in 2011.   Unless you can build a start-up all by yourself and don’t need money to eat, then you’ll need enough money for the journey.

e : Enthusiasm. This is much harder: it’s impossible to quantify, and you never know how close you are to running out.  Teams can become disheartened when they build, launch and sell something repeatedly, without the surge of inspiration that comes from lots of customers loving the product. Founders tend to have a large (some would say unhealthy) level of enthusiasm, and will fight the battle for years rather than give up.  It’s much harder to inspire a team to keep fighting with you!  Leadership is the key: ensure the team is with you, that they’re inspired through all the twists and turns, that they understand the reasoning behind changes in product direction, and why they may have to do things again, seemingly very similar to what they’ve done before.  You must have team buy-in; if they are part of the decision-making process, they’re more likely to accept the outcomes of these crucial decisions.  And, if you’ve got the right team, then by involving them in the process you’re more likely to make the right decisions!  But as a determined founder, it’s harder than it sounds.

So today’s formula is:

t + m + e ≥ x

But wait.  Isn’t there an undefined parameter?  Something unknown?

x  is what it takes to develop a product that flies.  And that’s unknown.

While I can’t give you an exact formula for x, I can suggest some tips for reducing it.

1. Test ideas before you build a product by holding several potential customer focus groups. The customers won’t tell you what they want but in my experience you can sense what excites or irritates them.

2. Get a basic product out quickly, then spend as much time as possible speaking with customers.

3. Implement a decent but cheap sales and marketing process so you can get actual customers using your product.  You can learn from them, even if there aren’t very many.

4. Don’t be afraid to pivot when you know something isn’t right.  Your start-up can’t afford to wait until you have lots of data to back up your assumptions.  You have to move quickly by feeling what’s wrong and innovating a better solution.

5. Word hard and fast!

You should also try to make m last as long as possible by bootstrapping.  The more you can increase the left side of the equation the higher x can be.

Given that I still haven’t found x I can’t guarantee that nothing else is required.  I do know that it’s a delicate balance to make sure that you don’t run out of t, m and e!  Worrying that we won’t have enough of all of these things to get to our x is what keeps me up at night!