We just launched our startup after many years of research and development. It is an ambitious project which was difficult to test along the way because it is very unique and it required a lot of individual components coming together for it to work as a whole. We still haven't built the revenue component, so getting a return for investment is still a long way off.
Now that it has launched, we are asking ourselves, is this working & is it ever going to work? We've done very little marketing as we have run out of money, but we are getting traffic of 1000 users per week. I have run out of ideas on how to test & measure success (not easy to do with this one).
I'm starting to wonder if it is time to give up and move on, but I'd like to get an objective opinion from someone who is an expert in these matters & can maybe give advice.
I wonder how many of the contributors here looked up your websites?
I have not had a direct startup success yet, but I have helped other companies succeed with my tech skills, so take my insight with that caveat.
I looked up the two websites listed in your bio. A very ambitious task and needed. The obvious question is who pays for this.
I would suggest you read the history of Heathkit http://www.heathkit-museum.com/hvmhistory.shtml.
The key to their success was the instruction manual. These were extremely well written and organized. Then dramatic automation improvements in the production of electronics made their niche disappear. The electronic educational publications I think still exist.
As I see it your main limitation is going to be the quality of the submissions and how you organize the videos. Additionally, a 30 min video for anything even how to use a camera is way too long. Videos are hard to search if you are looking for just one thing.
Even with smartphones and tablets, a video presents problems. They can be superior to drawings and text for how to assemble something like an Ikea table, but the quality of the shots and order of presentation are critical. I do not think that just anyone with a video camera can do this well.
It looks like you are addressing a need based on traffic. Getting paid seems your problem.
Your website also seems to mix trying to attract the manufacturers and the end users. I would separate the two.
The piece that most Startups miss is the difference between testing if a customer exists vs selling them the product. They are so very focused on the product first, that they miss the context. So if it is ok, I would like to step back a bit in the process and name the pieces of the search.
First, there are three large kinds of startup risk: Technical Risk, Market Risk, Execution risk.... typically in that order.
Do you think that the product can not be built? If there is some specific proof of concept of the technology, then there is Research to be done. This is different than producing a production prototype. There is typically a very large gap between the Proof that the technology works and the thing you want to bring to customers.
If there is minimal technology risk, then likely your next largest risk is Market risk. IE, the ability to find people who badly badly badly want their problem fixed.
In the 4 steps to the epiphany, Steve Blank lays out why customer development should happen before product development and he names four steps:
Discovery, Validation, Creation and Scale. People don't really know what to do with these, so let me translate those into the Lean Canvas structure.
Discovery = Customer / Problem Fit
Validation = Problem/ Solution Fit
Creation = Solution/ Customer Fit
Scale = Solution / Channel Fit
People often do not do the Market Risk tests at a deep enough level. First, they don't segment the market hard enough, so they don't have specific enough customers. Second, they don't recognize that customers are people who pay you. And so they talk to many many different people, but never actually test the question if people are willing to pay for a solution to the problem. And Thirdly, they typically try to jump from I know what the answer is into I need to sell a lot and so they start with the SALES conversation, and they skip the discovery, validation and creation conversation....
If you have 0 customers right now, then your task is to find one customer.
When you look at the Lean Canvas, there are two little things stuck into the Customer/Problem boxes: Early adoptors and Existing solutions.
So it should be possible to do a little mapping of who the early adopters are for each of the sub-sub-markets that you hypothesize are the correct market segment. And it should be possible to make a list of what those early adopters are currently seeing as existing alternatives.
Remember, that an early adopter is someone who:
1) Has the problem
2) Knows they have the problem
3) Has spent money to solve the problem.
4) Is still unhappy about the solution
5) is still willing to spend money to solve the problem....
Often there are specifically different possible customers. Customers can be different than the users. Is it the school, the teacher, the parent, the student or a business that is paying for the product? In a hypothetical education based product, it could be any of them. The student uses the product, but the school/teacher/business/parent could be the customer. And each would pay for different reasons (IE, different problems being solved) and they will pay different amounts.
By interviewing customers in a discovery first, then validation sort of way, you can hone in on exactly what the issues, and what the price of the solution should be, and what the list of the existing solutions are, and the list of deficits of all the existing solutions.
Remember that early adopters are about 2% of the market , at least the ones you are looking for, so there are a lot of people to visit before you start getting signal.
This is all the foundation of the questions that I would ask you about where you are to see if there is something to salvage or not.
The fact that you have 1000 people a week is interesting in the sense that you have people who care about something. Have you collected email addresses from them? Do you have any demographic data about them? Specifically which city they live in.
I am guessing from what you said that you have not asked any of the customers to pay you for anything. There are many things you could ask them to pay you for, which do not involve the product you have in mind. Workshops, books, consulting, competitors products. All of these could be used in tests to discover what kind of people really care that the problem gets resolved.
Short, timeboxed , specific tests to explore the underlaying assumptions of your business can teach you a lot very quickly. In both Startup Weekends and Lean Startup Machine events, we have seen teams make 250 to 500 customer contacts in a weekend. These were in person contacts.
So if you have 1000 people a week, and you have asked them for email and demographics, then you can find those people who want to engage with you and who are local to you. Or at least you can find a cluster of them, and go to them where they are at.
Now you can start the discovery interviews. Do they have the problem, what do they consider solutions. What are wrong with the existing solutions. etc.
To learn about the Lean Canvas, read "Running Lean" by Ash Maurya.
To learn about Customer discovery, read "Lean Customer development" by Cindy Alvarez.
When you have interviewed hundreds of people and are pretty clear that you have the right product/market fit (IE, you can predictably sell a product at a price that makes you money with enough margin that you can grow) , then you should read "Scaling Lean" by Ash Maurya.
Each of these are quick reads. You can get through this whole process in less than a month. (but not if you don't clear the decks of all the other things you are doing)
In that month, with the team focused on customer development, you can hone in on the key people who reallly want your product and what the key issues they need addressed.
Each time you engage with a customer, you want to get a commitment from them.
Either they are interested and they want to engage deeper and they will pay you money to move into the process deeper, or they are not. If they are, they are people who are early adopters. If they don't they may not be customers at all, or they may just be customers who wait until later.... Like most normal people.
With a hard focus on customer development, I believe that you can come to a clear answer yes or no on the viability of your startup.
If in the process of early customer development, you have set up your Sales funnel, have regular predictable income that is growing week over week, and you have a core group of fanatical fan customers who can't shut up about you, then getting more funding to grow faster should be relatively straight forward.
If you can't find customers( people who are willing to pay to solve the problem), or you don't have clarity on the high value customer segments that are willing to engage with you,then you will have a hard time getting to a clear answer and you will wander in the swamp until you run out of resources. This is the normal startup failure mode.
It is a mode to avoid if all possible.
there are 4 things that I look for in a startup:
1) a clear understanding of their business model - IE, they have a lean canvas, they have run tests on all the boxes, and all the 4 box pairs (customer /problem fit etc)
2) They have a sales funnel defined and the have metrics to measure progress ( See AARRR metrics for Pirates by Dave McClure)
3) They have a cashflow projection that drives expectations for week by week financial returns and the core targets of the sales funnel
4) they have a content strategy that is a specific narrative and a specific core set of actions that drive engagement with the companies sales funnel... Specifically the first 3 steps of the Sales funnel - AAR...
If you have all of this, congratulations. It is rare that I see all of things together in a clear way.
If you don't....
Do you have a detailed competitive matrix outlining the details of the products in the market and the features that they have with rankings?
Do you have a path to finding regular customers who will pay you?
Specifically people who want the problem solved bad enough that they will pay you consulting wages to solve the problem?
If you have hundreds of people who are clear that they have the problem, and they are willing to pay you to learn more about all the ways that they could solve the problem (back to the competitive matrix), then you have a way to search for the demographics of the key early adopters who will end up being the anchors for your core business that gets you going. Finding a narrow , underserved market with an urgent need is the key to finding a sub-sub-market that will provide a good home for your startup.
Likely there is a mentor/Angel Investor near you who can help you walk thru this process over 4-6 weeks and get things famed clearly enough to be able to answer your question for real.
Since there is little details of the product or the market you are working on, all of the above is speculation based on seeing hundreds and hundreds of startups and where they are struggling. If you find a local mentor you can engage with who will walk you thru this customer development work, you can get to clarity in short order.
There's lot to consider here:
With all of that said, you may just be "burnt out". If you are building and testing a business model you have all the data you need to make an evaluation. Any external input will just be an opinion.
i live in Silicon Valley and have seen many unlikely companies succeed and great ones fail. No one can really answer that question for you, especially not in this chat format.
One practical test is whether you can convince VCs. If you get enough funding and the potential payout is big enough you can push out revenue targets long enough to build the right product and have a real test.
I'm curious about your 1,000 hits a week. Are they new views? And, do you get repeat visitors (how "sticky" is your product/service)? Not knowing the product, perhaps repeat visitors isn't a good item to measure.
What do your investors think? Are they willing to add more funds to the company? Do you have an Advisory Board - what do they think? You may want to create a small advisory board/group if you don't have one yet. Look for strategic people in your industry (maybe 3-5).
Feel free to contact me if if you want to discuss. jimfalvey at yahoo dot com. Good luck.
Hello Karen, You need to go back to the drawing board. You measure success by set goals. If you are running out of cash at this stage then something is wrong with your plan but as expected most entrepreneurs miss this part. It is almost a normal thing. If your source of funding isnt adequate enough then you should have worked on your revenue model. You must have an MVP if not you don't have a business model.
WhizBang is great and you must not quit. Yes, liquidity is an issue and best thing is you have identified it at the right time.
Every unique product has to go through a life cycle and after 4 years, you are at right stage. That is, you have product ready, you have validated it with Awards and initial user traction.
Now is the time to build a Business Model around the reference points (Product, User Traction, Value Delivery, Target Audience and Your vision). Next thing will be to get the funds to implement the business model to start getting revenues. But that will not be difficult as it seems now. Right now you are talking like "WhizBang is great but not sure how to Make Money." Investors will not be willing to invest if you are not clear. But with Business Model you can say "WhizBang is Unique product, has got the traction and here is How we plan to generate revenue". Mostly with Business Model, you will start talking to potential buyers and will not need investors either. But to go aggressive, i think liquidity will help you to be focused.
I am available for any further assistance but all i can say is, WhizBang is on right track. Just don't allow external parameters distract the path.
Next step? Answers is, "I would use WhizBang if i sell gadgets and i have been communicated clearly that it would cost me X and generate value of Y.
I hope it helps.
Are you willing to share your URL? Might help. I am an entrepreneur and started my business eight years ago. We are bootstrapping it and we grow a bit more slowly than our heavily funded competitors. We lead our industry in one of the most important metrics fundamental to a. customer's success, which is huge.
In my learning (and there's been a ton), marketing and sales are HUGE. There are ways to do it on a shoestring that can be super effective... its hard to provide more input without knowing more about your product.
I recently watched the the movie about Ray Kroc... the guy who grew McDonalds. It's worth watching. Keyword: Persistence.
Another one worth watching is Joy. Also about persistence.
Is your heart in the product? Do you know it answers a need? Then persist. If starting and building a business were easy, everyone would do it.
Only you can answer this question. I know of many startups who got funding, and I was told I didn't have a business, just a technology... yet thosebusinesses are gone and I'm still in business and growing. Have I had to pivot? Absolutely! Do I have to manage cashflow? Absolutely! Do I have sleepless nights about making payroll? You betcha! that goes with the entrpreneurial world.
Let me know more details if you'd like to brainstorm Ideas. You can reach me through my website... https://wpmktgengine.com