Why most startups suck

The existing statistics on the potential success of startups are mostly untrue. The essence of the most terrible statement I have ever heard is that 2 out of 1000 startups that received investments will ever reach the milestone of $ 100 million or more. Some smart guys increase the percentage of successful startups to 0.2, or even to 2! In any case, the “wall” that separates successful startups from everyone else is quite high, and every day it becomes even higher as the difficulty increases with attracting more and more new customers.


The most depressing in the whole process of interaction with startups is to see the "burning" eyes of the founders, who say "we are almost ready to bring our product to the market, to the masses." By product here, we mean something tangible or virtual, which they diligently invented for weeks, shutting themselves off from the outside world.

The most terrible mistake, the “sin” of all startups, is not to involve clients in the product development process from the very beginning, from day one, hide the product from them, keep it secret for longer than necessary.
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So, when there is talk of a “massive release,” there is only one advice for such a development of events - do not rush! Just a week, let the client test the product, get feedback. Make sure 150% that your product is really needed by the market, or understand that the reaction to it is absolutely insignificant.

From this thought follows the second postulate: modern startups do not solve real problems!

Does anyone even care about your project? Many readers of Startup Owner's Manual (by the way, will soon be translated into Russian) are wondering why the authors firmly insist that the search and study of a client should go through two phases - problem research and problem solving research. There is no other way than to follow the sacramental phrase: "There is no other way to success, except to leave the office on the street and communicate with those for whom your product really matters - with the client."

Solving client’s mediocre problems is a “time bomb” for a startup whose founder spends the “classic” 20,000 hours of life (or 5 years 80-hour work weeks) to “achieve success in spite of everything” to create a real scalable and profitable business.

Why, then, there are so many entrepreneurs who refuse to spend 500 or even 1000 hours to gain confidence, to understand and make sure that the final version of their product will find its user or buyer, who will fall in love with it and take it with due enthusiasm! Indeed, without a keen client, even the most enthusiastic entrepreneur will, at best, “flounder” on market waves.

A great example is Dropbox. The project was instantly scaled due to the fact that it solved a painful, vital issue. The product turned out to be so good, useful and easy to use that the project, in fact, did not even need classical marketing techniques - the idea simply spread around the world like a virus. Just like it was with Hotmail and Gmail when they first appeared.

Where is the path of truth? It is clear that there is only one Mark Zuckerberg, therefore, it is unlikely that every startup can shoot like Facebook, Google or Square. It is absolutely impossible. Is it possible to exit? Yes: find your personal, real “development trajectory” and set your goals accordingly. And, not least, look for investors who share your vision of this “trajectory”. Many entrepreneurs would have achieved more if they could focus on one fast-growing market niche, which does not provide them with $ 100 million, but is 100% suitable for them.

In addition, the positive effect of your activities should be extended, self-recurring, as well as increasing with time.

Stand out in the crowd: when solving a customer’s problem, make sure that your solution stands out and is different from many. Hundreds of entrepreneurs “gossip” Google in search of similar solutions to their project, and only a few ask a living client, trying to find individuality, to find loyalty among customers - in other words, creating a unique market map, looking at which you can understand your strengths and weaknesses, as well as a good time and place to launch the product. The key to success is to discover the “trajectory” independently, without focusing on competitors, and then successfully adjust to it in such a way that the client sees all the advantages of your product in a timely manner.

Go ahead - do not stand: another sad moment associated with the work of startups is the “fatal” level of growth, repeated from week to week, or even more often. Of course, you can regularly carry out the same job, achieving the same indicators, but without explosive growth, the client will quickly lose interest in you. Do not hesitate! It is time to pull the ace out of the sleeve, start oneself and stir up the team, debug the business model, change - in short, surprise the client with his pressure and passion on the road to success.

Moving forward is often backward movement first: entrepreneurs are proud to find solutions for various problems, as well as their persistence and desire to somehow pierce any wall and move on. The key to understanding their success is that real entrepreneurs at the DNA level have a desire to resist failures, difficulties in adapting a product to the market and increasing demand. However, sometimes they should switch the “make” mode to the “search” mode in order to try to gain an understanding of new customer problems and new solutions to meet their needs.

PS If you have examples of other startups that use the customer development method, then we will be grateful.