5 patterns I discovered after coaching 100 early-stage startups
I’ve coached 100+ early-stage startups at Georgia Tech and across the southeast over the past five years.
It’s been an incredible opportunity to give back by helping passionate founders grow and build great products.
During my interactions with founders, I’ve discovered patterns based on which early-stage startups succeed and fail.
Here are 5 patterns that stand out:
1. Founders focus too much on investors and fundraising instead of customers and the product.
Why? The media covers and celebrates startups raising big rounds of funding, but this is usually a distraction for early-stage teams. You should focus on launching a great product and getting users onboard first. Customers are the best source of funding because they help you improve your product and don’t take away equity from your company.
Raising seed funding for a startup typically takes 3-9 months, and it’s basically a full-time job. You’ll be pulled away from your business as you meet with investors, review legal documents, send cold emails, and improve your pitch deck. Even if an investor does say yes, you give away a very large amount of equity because you’re so early - usually upwards of 25%. Instead of fundraising, make sure you’re building the right product and start getting revenue from customers.
2. Teams that succeed often pivot at least once. Those who never consider a pivot usually fail.
Why? The best teams constantly run experiments and gain new evidence that disproves early assumptions. Founders who stick to a linear path based on a rigid “business plan” don’t consider unknown unknowns and incorrect assumptions. A startup should be running quick experiments to find a scalable and repeatable business model.
You should explicitly make a list of the assumptions necessary for your business to succeed and start testing them. Startups are primarily a mechanism to iterate and learn more about customers, the problem they experience and how you can help. It typically takes a startup a couple years to find product-market fit and another few years to start getting significant traction. Listen to your customers and consider pivoting when you notice an opportunity.
3. Successful founders usually are scratching their own itch.
Why? Many founders are already their own customer and have a deep understanding of the problem and industry. This is a huge advantage because understanding your customer and the problem they experience is critical to building the right product. If you aren’t your own customer (and even if you are), you will need hundreds of customer interviews to begin to truly understand them.
Most humans make decisions emotionally and back them up logically. It’s the reason why companies pour millions into building strong brands that influence our purchasing behavior. You must understand the deep emotional and psychological impacts of a problem, and it’s very difficult to have this level of empathy without personally experiencing it. It can be done, but founders who currently or previously lived through the problem they solve have a big advantage.
4. Teams that haven’t found product-market fit within 24 months rarely find it without pivoting.
Why? The market always wins, so listen to your customers and find the real problem. It’s unlikely that you’ll nail solving the right problem with the right product for the right customers on your first product launch. If you observe and listen to customers carefully, odds are you’ll discover something unexpected that leads you to pivot to a successful product, customer, or business model.
One important lesson to remember: it’s not what you know – it’s what you notice. The best founders have discovered a “secret truth” about how humans behave in relation to a problem they experience. The best products attack this problem head on. If the timing is right, your product will start gaining traction in a couple years. If you’re not seeing progress, don’t be afraid to abandon a bad idea and pivot to something different.
5. Successful founders are more passionate about the problem they solve than their own product.
Why? Brand new products rarely succeed right away, and it can take months or years of experiments and iterating before things finally click. You must have enough passion to help you persist through all the failures. If you aren’t obsessively passionate about the problem, you’ll probably give up too early when things get hard.
Additionally, there are many different ways to solve a problem customers experience. Obsessing over your own product will limit your focus to only one possible solution when there could be better alternatives. Becoming obsessed with your customers and how you help them solve a problem is a much more fulfilling route that leads to better products. It’s easy to become emotionally attached to something you’ve built, but this can cause you to lose sight of the bigger picture and strategy behind your business.
Keep these patterns in mind to make sure you’re focusing on what matters most while building your startup and product.
Subscribe for more.
Startup and product lessons delivered right to your inbox.
Join 2,694 other followers and get notifications for new posts.