Early Stage Priority Confusion
December 2, 2011 Leave a comment
During the early stages in a stressful, lonely place I call StartupLand, it can be overwhelming determining where to focus scarce resources, both people and money. There’s endless product issues to address – customer features, performance, reliability, scalability – and if you have a Minimum Viable Product and a bit of luck there are existing customers to support and retain. Add to the mix the need to both acquire more customers and add other strategic partners to complement your product. Don’t forget recruiting, if you are funded and enjoy the ability to grow your team, sourcing and interviewing talent can literally take up 30-50% of everyone on the team in the early days. Oh, and your Board and investors will require some care and feeding through reporting and monthly or quarterly meetings. That’s a lot to juggle if you have a small team (5-15) trying to tackle each of these priorities.
So how and where do you focus scarce resources?
By being ruthless about both prioritizing and sequencing those priorities where maximum traction can be proven in the shortest period of time. And by traction I mean proving that customers will buy your product at a price that has a path to sustainability. In my experience, it means allocating resources in 2 primary areas in the early days:
- Harden the Minimum Viable Product. Specifically, ensure the product 1) has only the most basic feature set, defined as the minimum set a customer is willing to pay for, and 2) is minimally performant, reliable and scalable meaning just sufficient in all 3 categories to retain customers and enable a six-month window of customer growth. Probably the single biggest pitfall to avoid is allocating resources to make your product more feature rich than it has to be simply because you think your customer must have those features, all at the expense of making a more basic product work flawlessly. Your customers probably don’t need those features yet and if you have any paying customers, then you’ve proven they don’t.
- Get and maintain momentum in sales/customer acquisition. If one customer is willing to pay for your product as it exists today, then find another one willing to pay. Then another. There is nothing that defines traction more effectively than increasing customers and revenue. You can be unprofitable and raise money with customer traction. You can offset costs and hire more people with customer traction. The world of possibilities to tweak, market and scale your business open up with customer traction.
At the end of the day, these are the only things that truly matter for an early stage startup. Build the most basic product that you can sell, and then sell it. And if you can sell it, then don’t build custom features, in fact don’t build any features beyond the product you can already sell until you have more resources on board. Don’t harden the product for performance, reliability and scalability that you’ll need two years from now, harden it enough to get through the next six months of sales.
Sure, there’s lots to do from this point, but until #1 & 2 are achieved, nothing else matters, so don’t be tantalized to spend the cycles working on other high value, but optional workstreams. Be ruthless.