For those of you who don’t know us (yet!), we’re a full-service market research firm headquartered in Silicon Valley. Well, San Francisco, to be precise, but we cover clients from the Valley, as well as across the U.S. – and the globe. But, being that we spend the majority of our time here locally, we see a lot of startups. Many of them are our clients, and we observe and spend time with founders and entrepreneurs. We even do some founder-coaching at local incubators/accelerators. Drawing on this experience, we’ve come up with an essential 5-step checklist for startups.
Checklist Step 1 for startups: Understand the landscape
The sad truth is that around 75% of startups fail. That’s quite an abysmal rate. However, it doesn’t have to be this way. Before you get too far along the path of your business plan, take a close look at the landscape. Even a brilliant idea may collapse if the timing isn’t ripe for your product. Invest in some trend-research as your first step. Who is your core demographic? Are they using similar products or services? How often? How much are they spending? And, most importantly, how much do they like what the competition is offering? Does your idea (even if there is nothing like it in the category – see step 4 for this one) fit the “sticky” test, meaning, does it have any features that will draw people back, again and again? Step 1 here is Big Picture. Take the broad view before you tackle the details.
Checklist Step 2 for startups: Look at the competition
Alright, before we dive into Step 2, you do know who the competition is, right? Right? It’s impressive, actually, how many companies have not done a deep-dive into the competitive landscape prior to jumping into their business plans. Invest in a full competitive landscape review report. This includes your competition’s brand positioning, media spend (how much they’re spending on advertising and where they’re placing it), size of the market they own, markets they’re in, and their competitive edge. As a good rule of thumb, start with your top 5 and drill right in. If you don’t have a competitive set that is in the realm of exactly what you do, pick the next closest set.
“It can be really uncomfortable, especially founders in of a smaller tech start up, to take a look at the competition. That’s why you need help objectively evaluating your competitors. Once you move past the discomfort, there is always opportunity to improve on or differentiate from what you find in the competition. Having competitors in the marketplace is a great thing,” says Jay Walsh, Co-Founder of Decipher Tools. Bottom line: If you don’t know what your competitors are saying and how much they’re investing to say it, how will you differentiate your product?
Checklist Step 3 for startups: Test your idea
Once you’ve taken a big-picture look at the landscape and have done some sleuthing into what your competition is offering and saying, it’s time to test your idea. Before you get ahead of yourself and start asking potential customers (that’s Step 4; don’t worry, we’ll get there), test your idea with industry experts. Interview people who work in the same environment you’re trying to launch in and gauge their reaction. Talk to those who advise those in the same industry – investors, lawyers, marketers, designers – and get as much intel as you can about the opportunities and challenges facing not only the industry, but the nitty-gritty of the actual manufacturing, distribution, or technology behind the problem. This step in due-diligence will give you reams of data that will help you determine the type of investment you’ll actually need, as well as equip you for the infrastructure you’ll ultimately need to create once your idea is launched.
Checklist Step 4 for startups: Get customer feedback
Alright. If you’re getting green lights from the first 3 steps, it’s now time to go into Step 4: customer feedback. This is the fun part – it involves focus groups, ethnographies, quantitative surveys, and any form of creative qualitative research that will get your idea in front of customers. While you may think it’s a wise step to save money in and handle it yourself, don’t. This is where you really need to hire experts. You are simply too biased and myopic about your idea to ask questions objectively, and you won’t have the resources to recruit adequately, nor the time to analyze the boat-load of data you’ll receive. Bring in a market research team who is experienced with startups and founders, and let them do their magic.
This step is one of the most crucial ones, but it comes after you’ve done the work of testing the landscape, which we covered in Steps 1, 2, and 3.
Checklist Step 5 for startups: Invest in coaching
Did your product pass the customer litmus test in Step 4? Excellent. You’re getting close to releasing your baby to the world. As you start to refine your go-to-market strategy, take one last move to complete your 5-step checklist for startups: Invest in a business coach/guide. If you’re a member of an accelerator/incubator, you likely already have one. If you’re relying on capital from VCs, corporate VCs, or angels, ask them for a mentor who will coach you, your executive team, and be there to troubleshoot the inevitable problems that will arise as you launch.
Now, go get ‘em.