By Frank Gairdner, Co-Founder of TriggerTech, RIC Centre Advisor
Anyone who has poked around for some start-up guidance knows to expect a flood of articles, blogs, books, etc., explaining what to do at each step. The main thing to keep in mind is that there is not one solution, short-cut, pill or potion that will work for you. It is the combination of the field of knowledge and experience, along with personal growth that needs to be studied and critically applied to your individual scenarios on an ongoing basis.
I have made start-ups my career, but am still in the trenches. Nevertheless, I hope this article will prod you to look deeper and develop further and to learn, then apply what you learn to be as productive as possible while starting-up and proving your business.
Before jumping into product development, I think it is important to give some context. Given that we are focusing on start-ups, it is important to see product development as commercialization.
Perhaps commercialization is what it should be referred to all the time, because we are not trying to develop products in a vacuum. The aim is to sell them. So, to focus on product development without the commercialization element will typically be a failure. What follows has a heavy emphasis on building your products with commercialization and your business as the focus.
First, some key points that I hope will help you start in the right way.
Starting-up: Perspective, Attitude and Chasing down your Unknowns
In my own experience and in talking with a lot of aspiring entrepreneurs, I find that one of the main themes across start-ups is ego. It tends to be prevalent in those with the original idea, but it can also be spread fairly amongst the founders. Its source is most likely the urge to be intelligent, to have the answer, to know, to be right, and so on. This can cause undue tension in general, on the team specifically, and have the unfortunate effect of leading to premature business derailment.
In Ego is the Enemy by Ryan Holiday, he explains an MMA training technique that I think is very valuable. It is encapsulated in, Plus Minus Equal. The Plus, stands for having someone who is better than you to aspire to. The Minus, means to have someone you can teach, help, or perhaps mentor. Equal, is to ensure that you can challenge yourself with those who are probably already at your level.
Though this is a training guideline, I think it is important to build your expectations, business, network, advisors, partnerships, and team with this principle in mind. It will remind you that you should always be learning, growing and teaching, and that should help to tame any ego.
A while ago, my brother sent me a blog that focussed on Ray Dalio’s principles, specifically on thoughtful disagreement, and how he makes decisions. Many of these principles are related to ego, and specifically focus on ensuring you chase down your unknowns to effectively make the best decisions. It seems, after all, that it is the unknowns that the ego will mask. So, it is critical to develop an attitude and method to be able to chase them down effectively. Dalio’s principles are very helpful on this front.
It [thoughtful disagreement] demands that you get over your ego-driven desire to have whatever answer you happen to have in your head be right. Instead, you need to actively question all of your opinions and seek out the reasoning behind alternative points of view.
Embrace the power of asking: ‘What don’t I know, and what should I do about it?
To really make the right decision for your business, you need to grapple with your own and others’ logic to arrive at the best decision, and not just at what you alone happen to think is right. So, to repeat: Be prepared to hunt down your unknowns and insist on being open with your team/network to finding the best decision for your company.
Having considered product development in terms of commercialization, we can now look at the idea of the product itself. Too often, when entrepreneurs talk about product, they reference it too specifically, and so it has the potential to mislead everyone in other aspects such as design, development and intended distribution. As Peter Thiel reveals, “it is better to think of distribution [the selling of your product] as something essential to the design of your product.” (Thiel, Peter. Zero to One).
At its highest level, a product can be seen as your entire business, from development, to selling, to customer service, and so on. Your product should not be isolated, because it has an interwoven existence with your entire business model. If you agree, then you can start to design and develop all while implementing your business model from the outset.
Success is hard!
That is clearly an understatement. As Clayton Christensen states in Innovators Solution, “Over 60% of all new product development efforts are scuttled before they ever reach the market.” Then it gets even harder. Of those that do move forward, only a fraction become profitable.
I am not stating this to scare anyone. It is merely to illustrate how important it is to begin thinking and designing every aspect of your start-up to address your business model and market from the outset, rather than in piecemeal.
There are many strategies out there, but the one that seems to ring true in most cases, is to start small. Some of the best examples out there have a history of starting with niches and building from there. It is important to be able to control your development based on market feedback, and build your execution capabilities all while refining your design to optimize commercialization.
Throughout all stages of the product development cycle, you should be acting on your own well-defined and clearly-articulated business goals and model by interacting with your potential customers and partners. Be sure to have the following aims or strategies on your mind and in focus at all times. This will help you sell your idea and business value to whomever comes around and at whatever stage you’re at. This is not an exhaustive list or in any particular order, but it should lead to more items as needed and as particular to your business.
- Product validation: Yes, in the lab, but get into your market ASAP. What are your metrics, and what are you validating?
- Distribution: What is your sales plan?
- Procurement: Where and on what kind of timeline and for what price can you get what you need?
- Partnerships: Who are they? Who can help accelerate all stages? Use them to test, prototype, get testimonials and start selling.
- Production: How will my product be produced? Think of how you can design for it even at an early stage.
- IP: What’s your IP plan? This can be critical for fundraising and industry partnerships.
- Price, advertising and sales channels: These all need to be validated just as much as your product. Get your hands dirty here, too.
If that list makes you uncomfortable and all you want to do is iterate in isolation on your idea in the lab/shop, then find a partner who is energized by these challenges and who will execute on them.
Proof of Concept
Use this stage just as you would any other, to begin attracting people to your idea. Your proof of concept can be made of Play-Doh, it doesn’t really matter, if it proves your concept.
The real test, is whether you have proven something that will be meaningful to a market? This can be much harder to prove. Even more reason not to waste time in interacting with your intended market. Where possible, use your proof of concept to talk to your customers, let them play with it, comment on it and assist you to begin building out your metrics to guide your design for the next steps. This stage, like all that follow, must be validating your business model.
Research and Development
With more information behind you, R&D should commence with you knowing a lot more about what your market wants. I would recommend developing with an iterative approach. You can set benchmarks that act as reminders to get yourself out of the lab or out from behind your computer and go interact with your users. Then go back to development, and so on. It is more important to get feedback from your potential customers than it is to develop for a hypothetical group and then expect perfect execution and immediate customer appreciation. There is no better test than your users. They’ll use it like you never thought, nor would’ve reproduced yourself.
As Guy Kawasaki says in Art of the Start, “…don’t test, test, test… don’t wait to develop the perfect product…”. Get out there, build your business and get the feedback that is essential for successful commercialization.
If the prior stages have been properly completed with market interactions and you’ve built feedback into your design, you should be working towards validating a Minimally Viable Product (MVP). This is a concept popularized in The Lean Startup. An MVP is a product that gets at the core of what you intend it to be, and allows you to thoroughly test it in your market and validate product attributes in relation to response and use patterns.
If you haven’t interacted with your intended users by this stage, get out there ASAP. Your prototypes should end up being your MVP, or something super close to it by now. Use your prototype(s) for initial sales if you can. Use them to test with strategic partners (ones you’ve already been talking to in the earlier stages), get them to industry influencers and begin creating your champions who should be able to give you testimonials as well. As always, get the meaningful feedback you need to iterate.
By now, your product should have had many touch-points with your intended market. Depending on your product, this stage could be an MVP as well, ready for production/distribution. In general, this stage is the official launch of production and a consumer ready product. But don’t sit back here. Continue to implement rapid iteration as meaningful feedback rolls in.
You will also get critical feedback on your pricing, marketing and sales plans. Be ready to capture this data and apply it in a meaningful way. With this kind of data, it is great to have advisors to help implement any modifications to your plan. You do not want to have knee-jerk reactions and so worthwhile advisors will help you with guidance and patience, as needed.
If you have a physical product, it is critical to constantly improve your production. Unless you’ve hit it out of the park, you will likely still have to iterate on your design, improve on assembly time, materials, failure modes, manufacturing methods and, in general, all items related to efficiency of producing your product.
Crossing the Chasm is a book and an idea introduced by Geoffrey Moore. I am not sure if it has been replaced by another popular theory, but it remains very valuable.
Most of what has been discussed so far, we could place in the red circle, with the innovators and early adopters. These customers are critical to almost all start-ups. However, don’t rest on your laurels and be content with the growth in this stage, even though it can be impressive. You must learn the signs of the types of customers you’re attracting at each cycle and ensure your business is ready to serve them properly. Each section is unique and the chasm highlights the area in which many businesses fail to provide for the largest opportunity. They cannot make the jump. This is for various reasons, but largely due to production/development constraints, or simply because the business has not even realized that it is serving a different set of customers. These customers may have wholly different expectations from those you are considering and have gotten used to, and your entire business must be ready to adjust from sales agent down to customer service.
I hope that this article has given you more tools to help you work with your market and develop a business that has a chance of “crossing the chasm.”
Each of the topics discussed should be taken very seriously, but seen more as continuous process than as any type of step-by-step guide. The most important aspect is to see your product as the whole business. Read up on founder experiences, study, listen, watch, meet smart people, ask questions, discuss, grow and be open to learning and developing yourself … with no ego. If you do this properly, or at least get close enough to this ideal, you will have a good chance to navigate through all the exciting challenges and opportunities ahead of you.
Are you in the process of building your startup? See how RIC Centre can help by checking out our services for pre-revenue startups. If you’re interested, don’t forget to register as a RIC Centre client to get access to all our tech-startup focused programming and resources!
 Ray Dalio is the founder of Bridgewater, a very successful fund. The article is here: https://25iq.com/2017/04/28/how-to-make-decisions-like-ray-dalio/