My last article may have had some nostalgic value to it, but there were also some great learning on the importance of making a ‘great product’; in summary Nokia was successful in doing a few things very well. A lot of the articles I’ve written have highlighted some of these factors, all the way back to I have an idea; solving a problem, value proposition, differentiation and making stuff work.
Come to think of it, it should sound obvious that you would want to focus on making a great product. But it is pretty damn easy to get side tracked. Imagine, you have a cool idea, it gets picked up and next thing you know you’re funded. You start ‘growing’ and start selling a product. Due to outside pressures to go to market, you release something (early) that people buy but soon loses traction. Maybe some short term success but long term you have a problem due to a rubbish product (which you knew it was…).
So as a budding entrepreneur you have a bit of a conundrum; you need money (if nothing more than to live a basic life) and that means showing people how your product has skyrocketing growth potential. But you ideally need to stay small and nimble and focus on making a product that works (with some of the major kinks sorted out) to be confident in being able to scale and grow. The likelihood is you will need to pivot a few times in amongst that process as you learn about the needs of customers.
Cultural difference can also force you down certain routes. For instance in the US where there is an abundance of money within the Angel community, the temptation of selling the idea (without a product) will be very tempting. That option may not be open to you in Europe. I’ve come to see in the Netherlands how unrealistic the expectations can be from Angels – they distinctly do not understand how risk works (an article for another time). Therefore you are forced on somehow showing you can make revenue before even having the option to raise money – probably a difficult thing to do.
I am all for natural scaling of a business, but some business need traction. And traction comes from being able to grow fast. And that usually requires money.
There is no simple answer, but I think there are a few things you should be aware of:
- Growth should not be the first priority of a new startup. You need a product that gives the customer a positive emotion response as discussed before. The communication of benefits of the product rather than just talking about features.
- Perseverance – Rome wasn’t built in a day. Neither was Facebook.
- Focus on doing a few things really well – i.e. the problem you’re trying to solve. Don’t try and do everything in version one.
- Do some good field testing with real users to iterate a better product.
Once again all the above may not be possible without funding. And thus you get forced back into the dilemma – ‘product versus growth’ much earlier than you would like. This will definitely be a topic we’ll be revisiting over time but I’d like to hear your thoughts on the topic!