Building a Startup The Smart Way

This article will discuss the way forward.?For entrepreneurs and management the journeys to growth are similar yet different. Entrepreneurs take the road of uncertainty and unfamiliarity while well established organisations travel along the more familiar brighter lights ahead on their contrasting paths forward.

Road Ahead (More or Less Travelled)

How do startups begin to attract customers and start generating revenue?? It’s not just about attracting revenue but understanding value so that customers want to continue using your products and services.

For example Slack focusses on;

of a startup that has prioritised customer value in its growth trajectory is, the team collaboration platform.? Their focus is on customer value

·????? Initial Development

·????? User-Centric Design ?

·????? User Feedback

·????? Freemium Model ?

·????? Community Engagement ?

·????? Continuous Improvement ?

·????? Customer Success

·????? Word-of-Mouth Growth

Slack’s successful scaled lead to its acquisition by Salesforce.

Big Steps

Startups need to develop a strategy that works on assumptions, is ?customer focused by determining “the problem” and finding solutions.? Engagement is critical to developing the correct strategies.? Remember, customers are people and developing relationships and trust is essential.

Irish fintech startup Chime focuses on building relationships and trust by;

·????? Identifying Customer Pain Points

·????? Customer-Centric Banking

·????? No Hidden Fees

·????? Financial Education

·????? Community Engagement ?

·????? Personalised Solutions

·????? Customer Support

·????? Sustainability Initiatives

By focusing on these strategies, Chime has positioned itself as a trusted alternative to traditional banking options. ?This helped build growth and success.

Viable Products and Services

Starting with a Minimum Viable Product (MVP) startups can receive valuable feedback from customers, therefore enhancing the potential to generate revenue and grow the business.?

Monzo, a UK digital bank provides prepaid debit cards.? Offering an MVP, encouraged early adopters to test the service, provide feedback, and help shape future developments.

This approach allowed Monzo to create a user base supporting

·????? Rapid iteration

·????? Product offerings, including loans, savings accounts

·????? Business banking services

Measuring Success

Startups like any other business must use the appropriate tools and techniques to validate their offering.

Traditionally the main metric is the accounting process, showing results based on revenue (sales) and increased customers generating more revenue, it doesn’t tell the whole story.? While traditional accounting is essential many startups are engaged in disrupting tradition.

The Traditional Approach

Procter & Gamble (P&G) A prominent uses traditional accounting practices to measure growth.

They analyse revenue trends, profit margins, and cost structures to make informed decisions about product lines and market strategies. ?

Innovative Disruption

Stripe, a fintech company that provides payment processing software businesses uses disruptive accounting practices to measure growth. They utilise real-time data analytics and machine learning to assess performance.

Pivot or Persevere?

Does a business continue on the same trajectory or reset and change direction.? The decision must be based on what customers buy into.

For a startup such resources are precious and changing direction can be costly. ?

Spotify successfully pivoted its business model.? Initially they operated a freemium model, however, as the market evolved, they pivoted to enhance their user experience by investing in personalised playlists, algorithms for music discovery, and exclusive content.

This strategic shift towards a strong emphasis on user engagement and personalised recommendations not only helped Spotify attract a larger audience but also significantly increased their subscription revenue. ?

Conclusion

The road ahead is paved with many challenges and pitfalls for startups. Making big decisions and taking that “leap of faith” ?requires continual iteration based on customer feedback and robust measurement practices.? The decision to twist or stick is also critical for ambitions to grow and become a sustainable long term entity.