How build a successful startup 1: Ensure your idea is a good one

Frances Brown

This is the first in a series of blogs created specifically for people who are very early on in the startup process. If you'd like to receive all the blogs in the series, sign up to our newsletter.

It’s a well-known fact that a large proportion of startups fail. There are many reasons for that, but in my experience, the most common reason is that the idea that the startup is built on is, fundamentally, a bad idea. Either nobody wants/needs it, or there is a serious flaw in the business model that means the business will never sustain itself.

There is a lot of mythology in the startup world, particularly around tech, that suggests that successful startups are created by genius founders who are inspired with a fully-formed, fantastic idea that they single-mindedly implement and push out into an excited and hungry market. While a very small number of founders do hit on a billion-dollar idea quickly, many more come up with ideas that sound good on paper, but that don’t survive contact with the real world - hence the high failure rate.

To be successful, a business needs to deliver a product that customers want to use and, more importantly, want to buy. Creating such a product is typically a slow and laborious process, requiring a lot of thinking, experimenting, testing and redesigning. It also requires the ability to stop, or pivot, when it becomes clear that an idea doesn’t have potential. Even a brilliant idea takes time to shape into a real product - elements like the visual design, business model, pricing, marketing and materials all require careful consideration. Each new decision affects all other decisions, requiring a constant review and rebalancing of priorities. It’s a delicate and often daunting process, with a bewildering amount of detail. It’s common for founders to become overwhelmed with the sheer number of decisions to be made, resulting in their energy becoming diverted and drained.

So what can be done to keep things on track?

Write a coherent product story

There is a lot of advice available about business modelling, product-market fit, financing and building a great team. These are all important parts of building a successful business, but before any of these elements are even considered, it’s vital to define the core value your business is delivering, to customers, to the market as a whole and, most importantly, to you as a founder. The idea your business is built on must be clearly articulated, as it provides the foundation for literally everything else you do, from design to marketing to selling. If that foundation is weak or wobbly, there is a constant danger your business will collapse.

One way to define the value your business delivers is by telling your product story

- a narrative that details what the product is, what it does, who it’s made for and why they would buy it. This story provides the focus and motivation for the business and informs and guides decision-making. It also feeds into marketing, funding pitches and business plans.

Product stories vary but good stories have three things in common: they are simple, logical and true.

Less is more

It’s common for founders to start out with a complex, multi-layered idea - they want to solve a huge societal problem, or deliver a product with 100 different features. While ambitious long-term goals can be motivating, they can also lead to overwhelm and a lack of focus. The best early-stage stories are simple and easy to understand - it’s clear what the product or service is, what it does and who it’s for and it can be delivered with relative ease.

Demonstrate cause and effect

It may seem obvious, but in my experience it needs to be said - your story should make sense. To an investor or a buyer, the value you’re delivering or the outcomes you’re expecting should be easy to understand. If you have to resort to a long and convoluted explanation of how the business will deliver value, or make money, chances are your idea is too complex and has too many potential points of failure.

Stick to non-fiction

It’s fine if your initial concept is drawn entirely from your imagination - you have to start somewhere - but over time, you must back up any beliefs you have about your market, your users, your product and your business plan with hard facts and evidence. Any claim you make in your product story, about what your product does or who will buy it, needs to have real and recent data behind it. Otherwise you run the risk of developing products for fictional users, or solving fictional problems, both of which don’t make for a successful business.

Research comes first

The only way to ensure your product story is simple, logical and true is by doing research. In this context, research means anything you do to gather relevant, actionable information, including searching the internet and talking to friends. Without research, you are at risk of making important decisions based on guesswork, assumptions and imagination - all of which are very likely to lead you astray.