Startup needs: Solutions, marketing, clients

Startup needs: Solutions, marketing, clients

Wil Schroter is a serial entrepreneur, author and CEO of Go Big Network.
wilschroter.com in Columbus, Ohio.

After you listen to about a hundred startup company pitches,
you start to notice they all sink or swim on a few basic points. Given
enough time, you don’t even need to know what the product is. Instead,
you just start asking whether or not the entrepreneur has the right
answer to a handful of questions that validate just about any startup
idea.

This isn’t about having a sixth sense about an idea’s success
or failure, but about boiling it down to the few principles that make
all the difference in the world. So here they are, in order of
importance.

Problem/solution issue: Every great business idea comes down to a
solution to a problem. As entrepreneurs, we sometimes get enamored with
our solution at the expense of having a real problem to solve. If
you’ve ever wondered what a ssolution looks like without a problem,
just take a look at anything being sold in a Sharper Image catalogue.

The value of a good product idea is proportionate to the size
of the problem it solves. When you can communicate the problem to
investors, and they nod their heads in agreement signalling they
understand, then you’ve got an interesting business idea. 

When you can communicate that same problem and back it up with a solution that consumers buy into, then you have a business.

Sales and marketing strategy. Although you may have the first
issue licked, it means nothing without knowing how to bring a customer
in the door. 

That’s why a powerful sales and marketing plan is more critical
than an initial revenue model. You can’t sustain your business forever
without revenue, but I’m 100 percent sure that without any customers,
you’ll never have to worry about your revenue model.

You don’t have to have a 10-year plan for every type of media
you will buy and sales pitch you will make, just a basic explanation
for how you can cost effectively find customers over the next year or
two. Your plan might stink, but not having one is a huge red flag. 

Revenue model. There are several schools of thought on what it
means to have a revenue model for a business. Some say with enough
customers, the numbers will eventually work. Others say that if a
business grows quickly enough, it can get acquired long before the
owners ever have to worry about making money.

Neither school is right very often, and the exceptions prove
only that there are exceptions. Thinking you’re going to sell the
business to Google isn’t a revenue model any more than believing
winning the Powerball lottery is a full-time career move. 

Your revenue model should be simple – someone is willing to pay
for what you offer. Whether they pay for it indirectly through
advertising or directly through buying, there has to be a sustainable
and identifiable revenue model.

And more importantly, it must be a profit model. I can sell
dollar bills for 99 cents and generate tons of revenue, but certainly
guarantee the company will go bankrupt. 

Product peek. If you figure all that out, let’s take a look at
the product. The last order of business, which may sound bizarre, is
the product plan itself. That’s because if the product doesn’t solve a
customer’s problem, it just doesn’t matter what the product is.

In many cases, you can test the market for your product against
the three previous points by simply doing some basic research. Long
before you actually build a product, you can ask customers if they’d
buy it. 

You can start to figure out how difficult and costly it might
be to acquire more of them. You can also get a sense for what you could
sell your product for and get a basic understanding of whether you
could do it profitably. 

When you’ve got answers to all of these questions, then, and only then, it’s time to go build a company.

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