5 Milestones on Your Startup’s Path From Big Idea to Valuable Company
No matter how much experience we entrepreneurs have, it seems like we always struggle with the hugeness of our ideas. Most of the time, we can’t quite articulate exactly how disruptive, game-changing, and far-reaching our ideas are, but we’re all convinced that those ideas have unlimited potential.
The problem is this: When we’re working on something that’s never been done before, it can sometimes seem impossible to figure out the proper next step to take. We want to exploit the full potential of our massive idea, but we fear getting caught up in wild goose chases that might lead us nowhere.
Building a business is like controlling an explosion. In the dark. With a lot of people around. It’s easy for an entrepreneur to get paralyzed trying to determine which new feature to build, which new market to tap, or whether it’s time to pivot.
When that happens to me, I fall back on some strategic tools I’ve been using my entire 20-plus-year career as an entrepreneur. There are different tools for each milestone in the startup maturation cycle, a cycle that starts with the original idea and takes it through reality to viability and, ultimately, to scalable success.
Let's take a look at the path between the milestones, and use these strategies to get unstuck.
Idea to Reality — Getting a Grip
When you’re at the idea stage, that idea is one of a million other ideas you’ve had, all of them vying to be the one that becomes a reality. Multiply that by all the millions of entrepreneurs who have their own million ideas, and the math alone tells you that the odds of that idea actually becoming a reality are pretty slim.
You need a product roadmap. But creating a roadmap at the idea stage is like booking a flight without a destination in mind. Chances are you’re going to end up someplace you never intended to be.
So before you spend a lot of time on a product roadmap, draw up an execution map.
An idea should only be acted upon when you can envision a final outcome that is worth all the work to get it there. This means defining the final state, what the ultimate maturation of that idea looks like as a successful product, along with the scope of the company that creates and sells it, and the customer persona who benefits from it.
Amazon does this often, and in fact creates a press release touting how successful the product is, and why, before they even begin design.
The execution path attacks this dream from the starting point, asking the question: “What are the next steps I need to take to inch this idea towards that final goal?”
Work backward from the end while working forward from today. Think in big chunks, plan in small steps. Then prioritize those steps, and take the highest priority action.
Reality to Viability — Can it Be Done?
Just because you can make something happen doesn’t mean you should. This is the minimum viable product (MVP) stage of the cycle. And this is where the process usually gets lost in translation.
An MVP’s reason for being is not to prove that the product deserves to exist, but rather to prove that the big idea is viable by making small pieces of it work together in a product that can be sold, delivered, and used successfully.
And just because your solution executes in real time doesn’t mean it solves the big problem that you’re attacking with the big idea. It may just solve a smaller problem that isn’t as valuable.
For Teaching Startup, my MVP was (and is) a newsletter. The MVP allowed me to offer a lightweight, easy-to-understand, easy-to-build-and-deliver version of a product that scratched the surface of the big idea behind it. It worked and it’s viable, but that newsletter is only a few percent of the way to fully exploiting that big idea.
As you build a more robust version of your MVP, don’t be lured into making a more successful MVP. There should be a lot more functionality and usability that still needs to go into your MVP to make it convey your big idea. Balance building robustness into your MVP with extending your MVP to bring more of the big idea into it.
Viability to Value — This Is the Key
Startups that offer viable products and still ultimately fail usually do so because the economics never worked.
Value should always come before growth. Most of the risk that is associated with starting a business comes when these two concepts are acted upon in reverse. In other words, it’s risky to accelerate growth for a product that costs more to deliver than the value it offers the customer. Unless you can reverse that proposition quickly, the company will run out of runway.
Once you’ve gotten past viability, find the economic equation that makes the product a returnable investment of your time, your money, your employees’ time, your investors’ money, and so on.
Answering that economic question requires heavy math. But it all comes down to how much your customers will pay for the solution, and how little can you produce the solution for. Not just now, but also in the future.
Before you think about entering the growth phase, make sure you’re coming into that phase with the best possible value proposition for your company. Push pricing limits, reduce costs, automate tasks, and develop a confidence level about your market. Do all this so when you do push the accelerator, you have a chance of knowing what happens next.
Value to Repeatability — Can You Do it Over and Over Again?
Even the most valuable products will falter if that value proposition can’t be repeated to the customer’s expectations. Repeatability is often ignored because it’s boring. It requires a lot of analysis, documentation, and the relentless pursuit of perfection.
Here are a few repeatability questions you should be able to answer before you decide to scale:
- Are you a service or a product? Honestly, a lot of startup offerings these days are a hybrid. The product components are often repeatable, while the service components are not. The more instruction and customization a component takes, the more of a service it is. Remove or automate these elements out of the equation.
- Can you maintain consistency and quality? If you can’t, you won’t scale. This is a question that has to be asked across sales, your supply chain, your manufacturing or coding, your delivery, and especially your customer service and support. Find the outliers and eliminate them.
- Can others do it? Look for steps in your product development and fulfillment that require a lot of skill to execute. The more of these you have, the less repeatable those steps.
Repeatability to Scalability — From 1:1 to 1:100
True success with any startup happens at scale. Once all of the repeatability questions are answered, all your effort should go into making changes to your product and company that result in a one-to-many effect.
In other words, if your sales process requires one salesperson to sell one product to one customer, how can you make changes to the process so that the same salesperson can focus on selling many products or selling to many customers?
If there is still customization in your product, how does that become personalization, where the same enhancements can be offered to all your customers in a way that doesn’t rely on knowing their needs to deliver results?
Once you’ve reached scalability, whether that’s with an idea for a new feature, the entire product, or the entire company, that’s when big ideas can become bigger ideas. Your idea has probably changed dramatically from those pre-reality days, and maybe there are parts of it you want to come back to. Or maybe the idea has taken off in a whole different direction and become an idea you love even more than the original.
Regardless, once you’ve pushed that big idea to scale, it’s time to go generate more big ideas. And you can start the cycle all over again.