Startup Business Strategy For The Simple-Minded

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Startup Business Strategy For The Simple-Minded


Here are the six simple steps for building a startup (in this case, a software startup).

1.  Figure out what to build.  You can do this by being brilliantly insightful (which you might be), or by just talking to some people.  Ask them questions.  Would you use this?  Does this solve a problem?  Would you pay for this?  Do you know anyone that would pay for this?  Are you going to roll your eyes and laugh out loud once I leave the room?  Are you going to tell you spouse this idea over dinner this evening to demonstrate that you indeed do have a sense of humor?

2.  Build something.  It doesn't have to be the world-changing thing you devised in step 1, but a close enough approximation.  It should do at least one useful thing from the list of game-changing things that's on the feature-list from #1.   Oh, and it should sort of work (even if requiring the assistance of some chanting, prayer and promises to recycle more).

3. (Option A)  Release!  Get your product out there.  Even if it's buggy (which it will be).  It is possible that everyone that sees it runs screaming in the other direction.  Mothers protect their children in its presence.  But, get it out there and work like heck to deal with the aftermath of the steaming pile of elephant doo-doo you've unleashed upon the world.

3. (Option B) Make Perfect, Wait, Release!  This avoids the problems with Option A because people will no longer run screaming.  But, nobody cares about your product now because everyone is flying around with jet-packs on their back and 16-core processors are embedded in people's brain as an outpatient procedure.  Your market changed and your doohickey (however "perfect") is irrelevant.

4.  Sell.  Sell.  Sell.  The law of large numbers says that the larger the number of people exposed to the product (see Step 3a), the more people you'll encounter with average coordination who will trip and fall when trying to run away from your product demo.  Some of these people will buy while still in a semi-dazed state.  Voila!  You have customers.

5.  Refine.  Armed with a few paying customers, see what you can learn from them.  What are they like?  How do they use the product?  What do they say between the screams of frustration?  Figure out how to lower the pain quickly and treat them gently.  During these brief spites of happiness that you customers have, other customers will come into contact with them think "Hey, Joe seems to be happy -- even though he's got this far-away look in his eyes", maybe the software isn't too bad.  Let me try it out..."  Bing!  You have another customer.

And the story goes on. 

For the really, really simple minded here's the summary:

Decide what to build, launch an imperfect version, sell unsuspecting customers, keep improving, sell more unsuspecting customers.  Lather, rinse, repeat.  SUCCESS!


By the way, if you haven't joined the OnStartups Group on LinkedIn, you're not missing much.  There's not much functionality there yet (but the group is big).  The hope is that someday soon, we'll have more functionality so you can collaborate more meaningfully with other startup folks.  Until then, if you'd like to request access, please do so. That way, you can say you joined the group when it was just 11,692 members.  Come on in and join.  It's quick, painless and free.  Request access to the group.

Posted by Dharmesh Shah on Fri, Jun 20, 2008


Excellent post! Short, sweet, full of great advice and funny. If only business books could be so good.

posted on Friday, June 20, 2008 at 12:44 PM by David Duey

Great post. I would add
3. (Option C)Make it simple, Release!!
Instead of choosing between releasing with tons of bugs but really quick, or perfect 2 years from now, try sitting down and deciding which features can be removed from the initial release.
Customers will be more loyal to a product that is solid, but lacking features, than a product that has everything but can't execute them without crashing. Plus, when you add these features to the next release, it gives paying customers a reason to upgrade.
This seems to be Apple's approach to things. They release're like "why doesn't it have xxx or xxx?!" Most end up buying it anyway becasuse they know Apple has a track record of solid products. And when the next version comes out...guess what?! it has that feature that was now you have to buy it!!

posted on Friday, June 20, 2008 at 1:56 PM by Patrick Chukwura

Launch and learn...launch and learn.
That is exactly what we are fighting with everyday at VendorCity. We were going to launch locally (Boston and New Hampshire) but then the feedback we received was that everyone around the country was interested in trying it out. So, now we need to add that piece and launch as quickly as we can.
As someone who has been through this before, make it good but make it soon and get it out. You will always have bugs but if you do have even a half-way good job of testing, most of your users won't see many.

posted on Friday, June 20, 2008 at 4:18 PM by JC Cameron

I would add that as you get bigger with more customers, you need to get a lot more careful about what you expose these folks too. There needs be more testing as time goes on, not less.

posted on Saturday, June 21, 2008 at 4:45 PM by brian halligan

Jose: I have my good days and my bad days. Will try to create something of value next time.

posted on Saturday, June 21, 2008 at 5:40 PM by Dharmesh Shah

I have launched India's First Hotels Comparison and looking for ideas to market it.
India's First Hotels Comparison Engine

posted on Sunday, June 22, 2008 at 1:25 PM by Sonia Malhotra

I have to agree with Jose, this is pretty useless. It's been said 1000s of times already, and it's not all that helpful to anyone actually mired in a startup.

posted on Sunday, June 22, 2008 at 8:06 PM by Micah

I have to disagree with Jose. I think I'd call this post pithy, not content-lean.
Too many people lose site of these simple steps when starting and then building a business. It's easy to get down in the weeds and forget that at the core, you're just trying to build something useful that people hopefully like enough to pay you for.
Thanks to you Dharmesh for this simple refresher.

posted on Monday, June 23, 2008 at 2:00 PM by Jamie

Great post. I would add, 1a) make sure you love what you doing so much that you would do it for free.

posted on Tuesday, June 24, 2008 at 3:32 PM by Curt

Again great article. I have read all of your articles, and they are really great. Keep them up!

posted on Saturday, June 28, 2008 at 7:37 AM by Vusal Zeynalov

Two boundaries one needs to operate between are: 
The best is the enemy of the good, & 
The good is the enemy of the best! 
- A wise man. 

posted on Monday, June 30, 2008 at 8:58 AM by Kedar Mhaswade

I had this great idea to make a disruptive/revolutionary system for the education industry.  
I was crystal clear in taking my friends with whom I have worked. I know them professionally and personally. I know their capabilities and also their weaknesses. Knowing weakness is particularly important as I can have others compliment them. They also know me inside out, that helps me cover my back when I tend to be too optimistic or risky. More than anything else they are equals, that gives them the ability to argue with me which is extremely important for the healthy and democratic setup.  
Then hiring the next level of guys is their part of the job, where I only consult them.  
Do you think, this is a good approach for a start up? My focus here is that it is trust and shared passion which is most critical for a start-up to kick off right. 

posted on Monday, July 14, 2008 at 7:31 AM by Imtiaz

Can you'll please keep me informed on new ideas

posted on Friday, January 23, 2009 at 4:38 AM by Gladstone

Nice article! 
Todd DiRoberto 

posted on Thursday, August 20, 2009 at 2:11 PM by ToddDi

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