Top Tips for Product-based Startup Success
It can be easy in a world dominated by tech unicorns to lose yourself in startup advice that seems almost exclusively tailored towards completely digital startups. A lot of this advice will at best be redundant, but, in a worst-case scenario, it could send you in a completely different direction to the path you should be taking. The following tips are for all those entrepreneurs out there who are looking at making a product in a world where tech services are becoming the norm.
Revenue is king
The crux of any company is sales, but then you have companies like Uber that has never been profitable and lost $8.5 billion in 2019. Needless to say, when actually offering a product, whether it’s a physical one or one purchased digitally (instead of subscribed to), you need sales and revenue to support your growth. If you can’t drive revenue, you probably won’t be a sensible investment for all but the extremely risk-tolerant investors – and that’s if you have a completely show-stopping product. Pre-selling your product is a good idea if you’re looking at getting some traction to show investors. You can support subpar revenue by showing that there’s clear interest in your product, for example, by getting feature requests or integrating yourself with another product.
Know where to invest – infrastructure
When you only have seed capital at your disposal, you will find it difficult to spend it properly – but you need to be frugal if you’re to survive. When you set up your infrastructure, it can be tempting to cut corners, and some of these will be completely valid (e.g. buying a second-hand laptop for you to do your projections), but you shouldn’t cut costs excessively on the products that you will need to use for years.
Know where your product is going before you make any sales
It can be tempting to jump into sales, but you should know where your product is going. Not just your long-term vision for the product, but how it will physically get there. Logistics is hugely important, and it’s important to nail it correctly as soon as possible. Logistics costs may not seem like a pressing matter, but they will eat at your margins, especially when things go wrong. Consider getting to grips with transportation management systemsif your business model requires a lot of logistics.
Foster self-conviction
You will almost never face a decision where there is a clear answer starring you in the face. Almost every decision you make will likely have a range of potential options that might be just as good or even better. You shouldn’t be afraid of this; in fact, making mistakes is an essential part of developing your business. Despite the popularity of business schools, you can’t prepare for the real world of business in a classroom. You will need to think outside the box, which requires lateral thinking, and, in turn, that requires broad experience, which means learning from mistakes. Build up your self-conviction in the decisions you make, be prepared to follow them through and relish the mistakes that you make along the way.
