I talk to a lot of founders right before they actually “found” anything, the exicitement while they pitch me their product ideas never wears me off from showing them my own, yet I’ve been working hard on perfecting my initial response for it to be a balance between encouragement and setting them up for the hard road to come if they decided to go through with it.
Not the easiest of tasks, since at the same time I need to also be pitching my own interest (product strategy) or lack thereof in some cases -where the space itself doesn’t excite me to be involved or I don’t think the founder is up for the hard road ahead.
As a fellow founder myself, I very well remember the initial euphoria with every big product idea I ever had, the ones I ended up pursuing anyway. Yet soon enough that euphoria would start to wind off, either in the pursuit of co-founders or even more abruptly in the presence of potential investors who decline. Some less abrubtly than others. So me wanting to balance my initial response comes from exprience of being in the founder’s own shoes and not because of the prevailent culture we have in Jordan of shooting down people’s excitment. That’s another story to be told another day.
I had one of those meetings few weeks ago, where the founder along with some friends who introduced me to him were setting at a cafe discussing this founder’s big product idea. The pitch was excellent and within an exciting space I’d love to be involved in, thus my response was encouraging and it was of course well recieved. However, as usual my questions started pouring in and were answered very well until we came at the question of how much time/money is needed to do the MVP and the number I heared was in the 10s of millions of dollars. Nothing could’ve prepared me for that answer I recieved. While accostomed to hearing 10s or in some other cases 100s of thousands in almost every similar conversation I ever had, I was shocked and thus it showed in my response. The founder was taken aback, and though I firmly defended my point of view that they don’t need that kind of cash in the first year, nothing I could’ve said then would have made the founder get back at being comfortable.
The issue was not the number in itself but the context of the idea being presented, which didn’t need that much money to be validated in its initial launch. I keep calling the process the wheel of traction.
To simply understand the mechanisms at play, imagine your MVP as a wheel at the bottom of an upscale road with several stops, each stop has a bit of straight line before the next upscale and so on. Your challange is to convince others to push the wheel forward while you keep tweaking the process to accelerate to the top. When you start you need a lot of force to start making that wheel move up the road, that’s your initial effort, you try to figure out the number of people you need with you to make the first turn, these could be partnerships, fellow cofounders, freemium offering..etc. you get them along and the wheel keeps turning until you hit the first milestone you needed to get to. By then you’ve gathered enough people to push forward with you and so you start thinking of ways you can get double or triple that amount for the next milestone and so on.
The following are my two cents on the path to validation, the essence can be found in many other articles or books ever written on tech strartups.
- If you think any human on earth can be a user of your product, think again. While some really are, many are not. Even further, your road to concour the world needs to start somewhere close to where you operate to be able to make use of the partnerships you need to gather enough force at first to start turning the wheel of traction as well as a niche market segment to start with. Think Facebook vs. Uber. And also think Facebook 2004–2006 and Uber 2009–2011.
- Even if you spent most of your professional life within the same space you your new product is in, you can’t assume your new customer/user is the same version of the one you’ve been accostomed to serving all those years and think you know them inside out. Your old customer dealt with a difrerent set of tools and services to accomplish their tasks and although your new product aims at making that process even easier and more rewarding, you can’t bet everything you have on that user valuing and even interacting the same exact way with your new product. You can make guesses, you can make assumptions and experiment on validating them but you can’t base all your big launch plan being the force turning your traction wheel on that assumption alone.
- Once you’ve experemented with different ways that could accelerate your path to success, those successful experiments become your growth hacks. In most times those become mecanisms that when invested in will get you the growth rate you want. That’s where you are supposed to invest your cash in to accelerate your growth and increase your traction and that’s what your investors want to give you the cash for.
- I made several business plans and growth forecast models that had 2x to 5x growth rates inherit in them. I admit I was dilusional to some big degree. I’ve seen also a lot of those made by others only to discover in a side conversation I had with a regional venture capitalist one day, that all they need to see is 10% growth month-to-month, for them that is enough traction to justify them backing up a startup.
This story was first published @Springing Forward