A Quote by Steve Blank
Startups have finite time and resources to find product/market fit before they run out of money. Therefore startups trade off certainty for speed, adopting 'good enough decision making' and iterating and pivoting as they fail, learn, and discover their business model.
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The most important thing in startups is getting a product to market, as imperfect as it may be, and then iterating on it and continually making it better. A first rev of a site that has a few typos may not be perfect, but it was the start of something that I deeply believed in.
Startups don’t fail because they lack a product; they fail because they lack customers and a profitable business model.
Startups are companies that are still in the process of searching for a business model. Ventures that are further along and executing their business models are no longer startups; they are early-stage companies.
Companies that acquire startups for their intellectual property, teams, or product lines are acquiring startups that are searching for a business model. If they acquire later stage companies who already have users/customers and/or a predictable revenue stream, they are acquiring companies that are executing.
9/10 startups fail, which is a harsh reality in the world of entrepreneurship. However, I believe that such a high number of startups fail because they do not take the right steps necessary when building their business. The biggest challenge people have is building something that their target audience or niche really wants.
Because most startups are lean and scrappy organizations consisting of a limited number of people and supported by an even smaller number of resources, startups cannot afford to have any slackers on board. When you fail, you cause an 'epic failure,' and when you win, everyone in the company knows about it.
So my advice to startups in this particular category is if you’re going to put your product in beta - put your business model in beta with it. Far too often we are too product focused and not business-model focused. That’s one thing I definitely would have done differently with JotSpot.
If you have a strong business idea, then it is comparatively easy now to get capital. It is a positive thing that increasingly more people want to join the startup bandwagon. However, to build a successful business, focus on creating more value through the product, and direct your efforts on solving real issues. If you manage to build a sustainable product, revenue will follow. A lot of startups fail because they concentrate on incremental innovations, increasing user base, and monetisation before strengthening the core of their business.
Before I started Code for America, I spent my career around startups. First it was game developers, small teams trying to make hits in a tough business. Then, when I started working on the Web 2.0 events, it was web startups during times of enormous opportunity and investment.
As a serial investor who has raised hundreds of millions of dollars for startups, I know that the business plans coming out of incubators tend to be vetted and more thoroughly validated. The incubator's input into your business plan will make you look far more polished and experienced - even if you have never run a business before.
Money, while clearly helpful in solving myriad problems, can often conceal a business's real flaws. It can also risk rigidifying a company's business model at the very moment it should be in 'customer discovery' mode or iterating around market opportunities.
Not all startups are alike. One of the key ways they differ is in the relationship between a startup's new product and its market.
There are so many startups out there raising money. I don't think this is a bad thing. It's a good thing. Entrepreneurship is in vogue. Innovators are innovating. Makers are making.
We now understand the distinction between startups - who search for a business model - versus existing companies - that execute a business plan.
What's really happening is that every bank in the country is experimenting with the blockchain and experimenting with bitcoin to figure out where the value is. For the first time ever, they're working hand in hand with startups. Banks are asking startups for help to build products.
I think the rise of A.I. is bigger than the rise of mobile. Large companies are sometimes as worried about startups as startups are about large companies. Ultimately, it will be about who delivers the best service or product.
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