Navigating Goals, Focus and Growth
In the dynamic world of startups the path to success is paved with clear goals, strategic focus and an understanding of the journey ahead. For every aspiring entrepreneur, it’s essential to grasp the three core goals that drive a startup’s mission, identify the top focus areas that demand attention, and comprehend the three crucial stages of a startup’s life cycle. This comprehensive article will equip you with the insights needed to navigate these fundamental aspects and setting the stage for your venture’s success.
Table of Content
- 3 goals of a startup.
- 3 focus areas of startup.
- 3 stages of startup life cycle.
3 Goals of a Startup
A startup founder has lots of dreams. Those dreams would only come true if
the startup founder executes his plan properly. To be able to execute
properly, the founder needs to have explicit goals. These goals need to be
kept to a minimum as it is humanly impossible to achieve a large number of
goals.
When I started my first startup in 2003, I had 3 goals.
- Portfolio of successful products
- Iconic organizational culture
- IPO
- I wanted to create a portfolio of successful products. I admired microsoft
and google a lot at that time and had the dream that one day my startup
would be able to achieve this goal. What I did not know was that to
achieve this goal I would need to focus on solving one or more problems of the users. I wanted to create a portfolio of successful products but
without any good problems to solve. I did not find any good solutions. I
learned this lesson in the long run after great difficulty and multiple
setbacks. - The second thing I wanted was an iconic organizational culture. I wanted
people in my startup to feel happy and motivated to do something big. I had
heard about iconic cultures in companies based in silicon valley companies
and wanted my startup to also have that kind of culture. Only after working
for more than 10 years, I learned that culture is something you need to
nurture carefully, so that it lasts the long run. Cultures cannot be bought or
copied, you need to invest time and plenty of effort into building it from day
one. - The third big dream of any startup founder is Initial Public Offering (IPO).
I also dreamt of having a successful IPO one day and becoming a millionaire
or billionaire. Moreover, IPO may be the most glamorous thing to happen to
a startup but it is achieved by only a very few selected startups who are able
to scale big. For scaling big, you need to achieve the first two goals.
In my new startup, I am focusing on these three goals from day one and
would like to attain them as soon as possible. In my very first startup, I had
dreams to achieve these goals but no plan or execution to achieve them. In
my current startup, I have a single minded focus on achieving these as soon
as possible. Attaining these should be the number one priority of any startup
founder.
3 Focus Areas of Startup
As a budding entrepreneur, you have lots of choices when it comes to
spending your time along with your precious and limited resources. I have learned that the 3 of the most important areas to focus on, for a budding
Entrepreneurs are seen in figure 1.2.
- Product
- People
- Purchasing power
These 3 Ps are the 3 main steps on our road towards our three goals. I have
also seen that winning entrepreneurs like the founder of Paytm are good at
these three tasks.
Product
Every startup needs to create one or more products that solve some problems
for the users and the customers. Without creating a good product with paying
consumers, no startup can grow and become profitable.
People
To create the winning products you need to assemble a team that can
execute well. Thus, any successful startup requires good employees and
successful startup founders as good recruiters and motivators.
Purchasing Power
Every startup needs money to purchase the time of its people and the
essential resources required to create and provide products to customers.
Some startups do not buy products using money from investors or founders but they purchase them using other mechanisms like ESOPs, crowdfunding
and barter. Thus, the term purchasing power instead of money or fund
raising. As a founder focus your time honing these three skills required for your
startup to succeed. Time and focus are bigger constraints than money which
I had seen it in action as the Vice President of Paytm. You can get the money
from outside but you always have limited time and focus thus, a startup
founders should be focused on these three areas that we discussed above.
3 Stages of Startup Life Cycle
Most people associate startups with scaling. The media has a habit of
covering startups that have secured funding and are scaling fast. Due to this
habit of the media, most people feel that startups are only about scaling.
Scaling is the stage in which the external world at large comes to know
about the company. A large part of the startup lifecycle is not visible to the
external world. In total, there are three stages of the startup lifecycle that I will show you in figure 1.3.
- Search
- Build
- Scale
Search
The first phase of the startup lifecycle is search. A startup needs to first find
a problem and then a solution to that problem. A major reason for the failure
of startups is building products that people do not want. Searching for a big
problem and creating a solution around that problem helps in providing a
strong foundation to the startup for future success. This stage ends when the
startup has found Problem Solution Fit. This stage generally requires just the co-founders to work on finding the
problem and creating a prototype solution to solve this issue. The aim is to
find a scaling pattern which can solve this. In some cases, 1-2 employees
can be recruited but at this stage entrepreneurs need to bootstrap spend
their own money and big expenses need to be curtailed.
To explain this, let us take an example of a food startup. If we were creating
a food startup, we would first need to find a big food related problem that
customers face. Say the problem selected is getting healthy fast food.
The second step will be to search for solutions to this problem globally. The
founders should experiment with a few solutions of their own.
A part of finding a good solution will be to find a scaling pattern. Scaling
pattern is the pattern language for the potential solution. Having a scaling
pattern is important to understand the scalability potential of a product.
An example of a solution for a startup focusing on healthy fast food can be
Healthy Burger, wheat or multigrain bun with fresh vegetables as a filling.
Another solution can be the South Indian dish Idli-Sambar. Both the
solutions are very different. Startups can focus on any one of them and
create a suite of products around this solution.
For example, if a startup wants to create a healthy burger then it can create a
menu with different kinds of healthy burgers. It can create burgers with local
vegetables to suit local tastes and thus expand globally. It can also have
multiple varieties of buns. Moreover, constraining the solution to just
healthy burgers gives the startup the required efficiency in execution and
focus. Thinking of the healthy burger as a pattern allows the startup to create
a suite of healthy burgers to suit all kinds of locales and tastes.
Similarly, if the startup chooses Idli-Sambar as the dish it can experiment
with different kinds of doughs for creating Idli to suit different locales. Also, it can experiment with different kinds of chutneys (Indian sauces) to
compliment the Idlis to suit all tastes.
A blunder any startup can make is to think that it can give 5 different types
of products to consumers as a solution. If the startup provides healthy
burgers and idli sambar in the same shop the logistics of providing both will
make it difficult to achieve economies of scale while also creating
challenges in the making of Standard Operating Procedures (SOPs).
Providing five types of burgers or idlis is easier than providing 5 different
dishes simultaneously.
Thus, focusing on one solution and its multiple variations can provide
efficiency in execution and fulfilling consumer choices as well. When the
startup founders find a good scaling pattern, we can say that that startup
has achieved a problem solution fit.
During this stage, the startup’s founders are generally finalized. It is
generally rare to get funding during this stage and thus the founders must
bootstrap, fund the startup with their own money the startup at this stage.
Nowadays, a startup can try to get some grants from incubators and the
government under various startup funding schemes.
Build
Once a startup finds a problem and builds a solution for the problem and
achieves the problem solution fit it needs to recruit a small core team that
can iteratively build a product. This stage goes on till the startup achieves
Product Market Fit. At the beginning of this stage some angel investors can be approached for a
little bit of funding as the startup has something to showcase to them since it
has already achieved the problem solution fit.
Every startup must create a Minimum Viable Product and start
selling it in the market. Startups need to focus on 2 things in this stage,
making and selling. The startup must iteratively increase features of MVP
through feedback it receives from actual users and customers. Additionally,
the startup also must learn about the various details of the market like market
size, market structure, the barrier to entry etc.
Product market fit is a stage where the product is so good that
consumers want to use the product themselves without a lot of push. For
example, when using Uber for the first time, I had the urge to use it
repeatedly. That was Uber’s product reaching the product market fit.
However, this usually takes time and may involve multiple iterations to the
product.
Scale
Once the product is desired by the market it becomes easy to get money
from venture capitalists and big angels. It is a good time to scale the startup.
At this stage, a startup must transform into a corporation. Many people may
need to be recruited and a formal structure needs to be put into place. Uber,
Paytm have taken this route once they achieved the product market fit.
Thus, we see that all 3 stages of startups are very critical. Startup
founders should not try to scale from day 1 before achieving the
problem solution fit and product market fit. Therefore, any startup
whether big or small must follow the 3 stages of the startup lifecycle and
start with the search stage follow up with the build stage and then finally
scale the startup.
Conclusion
Navigating the startup landscape requires a clear vision, strategic focus and an understanding of the journey’s stages. By honing in on the three pivotal goals that achieving product market fit, building a loyal customer base and generating sustainable revenue startups can lay a strong foundation for success. Founders must prioritize focus areas like team building, securing funding and refining their business model to steer their venture in the right direction. Understanding the three stages of the startup life cycle from the initial ideation and development phase to growth and scaling allows entrepreneurs to anticipate challenges and seize opportunities at each milestone. By integrating these insights into your entrepreneurial journey, you can transform your innovative ideas into a thriving successful business. Remember, the path of a startup is filled with learning and adaptation and with the right approach your startup can reach new heights.
