How to Build a Startup Pt2 – Secrets to Creating Global Company

How to Build a Startup Pt2

Have you ever dreamed or wished to build a startup? When we decide to give it a try and build a startup we have to, in substance, go through two main phases. The first phase is about creating solid foundation. This is what we were talking about in the first part. The second phase is about using this foundation, we created out, to build well-oiled machine. Today, we will discuss the last five principles that will help your startup get momentum and stay on the edge. Also, these principles will help you stay ahead of your competition. Let’s get started.

Secrets no.1-5 are in part 1.

No.6: Mastery – Become the best on the market

In the previous part we talked, among many important things, about that we should focus on building something useful, something that solves existing problem. We also talked about why it is better to start with smaller market and why it is better to build a startup on some secret sauce. Therefore, let’s suppose that you have a really good product that people want to buy. This is critical because when you build something you also have to sell it. Otherwise, you may think about building a non-profit or starting a hobby.

Having a really good product and paying customers is the key for us to create stable cash flow. When we achieve this, we have to move to the step number two. It’s time to steer our focus, effort and energy on refining our product offering. This means couple things. First, we should start to fix the most annoying bugs our customers are complaining about. Think about this as improving user experience. Second, we must get in touch with our customers and ask them for feedback. We need to know about what they like, what they dislike and features they would like to use.

We live in the world where half of the world’s population is connected to the Internet. What’s more, a big chunk of these people are also using social media. Therefore, the next step to build a startup is to get out of the building (at least online) and establish presence on social media. The first principle we discussed was to forget about branding in the beginning. I will stick to it. We are not going to use social media for promotion, at least not primarily for that purpose.

Instead of using social media as a branding tool, we are going to use it as our main tool for customer support and also suggestion box. So, if your startup doesn’t have its own social accounts, it is time to create them and link to them from the website of your startup. Next, put aside a little bit of time every day and encourage people to share their ideas and experience with your product on social media. This will help you find bugs and issues you may never find otherwise.

It will also help you collect valuable feedback and data you can then use to improve your product. We should also don’t forget to mention that you want to encourage people to talk about your product on social media. In case of negative feedback, you have a great opportunity to show your customers, current and also potential, that you care and fix all the problems your customers are complaining about. In case of positive feedback, you will get advertising for free. Well, you will actually make money while advertising. This is a dream come true for every marketer.

I have to warn you. This is not about spending whole day on social media chatting with people and calling it work. Remember, your goal is to build a startup. Watching social media feed is not the description of your job. When you get the feedback and ideas you need, it is time to get back to drawing board. You and your team have to decide what ideas are worth pursuing and find the fastest ways to implement them. However, you also have to remember that adding features is secondary. You primary objective is working with what you already have and fixing bugs.

If it is not clear, the sixth principle is all about being the best on the market. It doesn’t matter what industry you are in. You have to be the first who comes to mind when people think about your industry. You have to be that good. This is the best way to build large customer base and community of fans and evangelists. The downside is that it is hard and you can’t fake it. The upside is that it is hard and you can’t fake it. Meaning, when you achieve this level of mastery with your product, you don’t have to worry about fakers and copycats.

In case of copycats, the majority of people will want to have flawless original rather than cheap and malfunctioning copy. In case of fakers, no one can fake it forever. Sooner or later, one of the two things will happen. First, fakers will give up. Second, people will see through the lies and pretense and see the truth. When this happens, what do you think these people (customers) will do? They will go and search for someone who can give them what they want in exceptional quality and on time. This person is you. All you have to do is keep going and refining your product.

The Takeaway

There is only one sustainable way to become the number one on the market. You have to build a startup that offers incredibly great product and incredibly great user experience. Use social media to get in touch with your customers and ask them for feedback, ideas and suggestions. Next, fix the biggest issues and continually refine your product. Also, think twice before implementing every feature your customers would like to have. Focus on the core functionality of your product, your mission and the problem your product is solving.

Lastly, there will be people who will try to fake it or copy your products and success. You don’t need to worry about them. People who will try to fake it will sooner or later give up. People who will try to copy your products will not be able to also copy the exceptional quality of your product. Focus your thoughts on your product, team and customers. Make sure your product is exceptional and your employees and customers are happy. These are your top priorities.

No.7: Curiosity – Experiment a lot and often

In previous part we discussed that the best way to build a startup is to build on something no one else knows about. This means that innovation should be at the core of your business. In other words, you should solve existing problem with completely new approach and solution. This will also require that you adopt experiment-oriented mindset. You have to be willing to fail, fail big and often. Once you settle for safer road or stick to some solution just because it is working, innovative spirit of your company will die.

In order to keep this spirit alive, you have to encourage your team to go against conventions and break rules. Encouraging your team to reinvent the wheel is not enough. They have to believe that there has to be something ten times better than the wheel. This means that you have to create culture that supports new ideas and going against rules. This is why it is often better to build a startup with team of people with only little or no experience. Otherwise, it is high likely that these people coming from different companies are used to following the rules.

This doesn’t mean that you focus only on hiring people coming out of school and never hire anyone who worked in any other company. All I’m trying to say is that you have to make it clear that you want your team to try new approaches. You want them to throw away what works and experiment with novel ideas. And, you have to say it explicitly. When you do that, you also have to back up your words with action. For example, Astro Teller (Head of Google X) created award to reward failure and to encourage his team to pursue weird, even insane, ideas.

Another thing you should consider while hiring new people is to focus on hiring team players. This doesn’t mean that you should focus on hiring only obvious extroverts. There are amazing people who are almost on the edge of introversion. Still, they are amazing team players. In this article, you will find the top six qualities every great team player have. I call people with all these qualities unicorns because they are hard to find. Fortunately, these qualities can be learned. If person lacking some of these qualities, nothing is lost. Give her space, time and guidelines to learn it.

The last thing you must remember is that when you decide to build a startup, focus on hiring ‘A players’. Especially in early stages you will have resources for hiring only handful of people. Make sure these people are all-star performers. Trust me, you will recognize these people at first sight. These people are passionate, committed, open to new ideas, have a huge amount of energy and always deliver on their promises. Find these people and do whatever it takes to keep them.

The Takeaway

Unquenchable curiosity and openness to experimentation are two critical characteristics of innovative and disruptive startups. This means that you have to encourage your team to experiment with novel approaches and ideas and to be willing to fail. You can also follow the example of Google X and create special reward for the weirdest ideas. Your team has to believe that failure is nothing bad. Failure is nothing to be avoided. Instead, failure is just another way to find out what doesn’t work. In this sense, failure can actually be a step forward.

No.8: People – Create culture filled with passion and dedication

In the previous section, we already briefly talked about hiring only people who are passionate about their work. However, creating the right culture is so important for the survival of your company that we should give it more space. What characteristics or elements should healthy company culture have and how we can create implement them? First, we have to focus on hiring only people who fit our company culture or the culture we want to create. Here is the thing. People we hire represent our company, from the inside and also from the outside.

Our perception of company is based on our opinion of its employees. For example, when you meet with someone who is nice, energetic and passionate about his work, you will probably think that the company he is working at must be great. You will think the same about his work as well, even if what he is doing would be otherwise boring. Second, if we want to build a startup with strong culture, we have to make sure everyone understands and agrees with the core values, mission and vision of our company. This is the best way to get people together and do something great.

When people are committed to the mission of your company, it changes everything. The whole company is full of energy and enthusiasm. People want to go to work and are more engage in it. What’s more, people will no longer see work as just another way to make some money. They will see their work as opportunity to change something, to make a difference. When this happens, it doesn’t matter how tough times you and your team will have to go through. Your team will relentlessly push through every obstacle on your quest.

The third and fourth element of great company culture is freedom and empowerment. People in your team have to know that they have the freedom and power to make important decisions and participate in the development of the company. People in your team need to know that their voices will be heard. Your employees also need to know that you trust them. Otherwise, they will hesitate to voice their opinions. So, when someone will approach you with some idea, suggestion or complain, listen actively. Ask them for details and let them tell you how to implement that idea.

Lastly, constantly remind your team about your values, mission and vision. Don’t make the mistake of letting people know about these three pillars only on job interview and then going back to other things you think are necessary to build a startup. Use posters, desktop wallpapers, business cards or whatever you want. Just make sure people in your team have these pillars constantly on eyes and agrees with all of them.

The Takeaway

In order to Build a startup with great company culture you have to make sure that you hire the right people. You want to hire only people who fit your company culture or the culture you want to create. Next, make sure everyone in your team is on board with your core values, mission and vision. Lastly, remember that great company culture is possible only if you give your employees freedom to make decisions and let them participate in the development of your company. Your employees must know that their ideas and opinions will be heard. In short, put your people first.

No.9: Rebellion – Break the rules

Sometimes it is wise to play by the rules. However, when you decide to build a startup with innovation at its core, there will be times when you will have to throw all the rules out the window. This is what all successful startup founders have in common. These people are not afraid of breaking rules and even going against the common sense. There are a number of entrepreneurs we can use to support this claim. Henry Ford, Steve Jobs, Richard Branson, Jeff Bezos, Larry Page, Marc Benioff, Elon Musk, Peter Thiel, Travis Kalanick and Brian Chesky just to name a few.

There is one great saying: “If you do what everyone else does, you will get what everyone else gets.” Therefore, if you want to build a startup that will create something new and really impact the world, you have to do something new. You have to stop playing by the rules of other people and start playing by your own. Think about it. Would we have cars, space stations, computers or smartphones today if some people would not be willing to break the rules and go against conventional thinking? Probably not. It is high likely that we would still live in a cave.

Therefore, don’t be afraid of being a rebel and trying new and fresh ideas. The reality is that world needs more people willing to do what may seem crazy. This openness to new ideas is, I think, the engine behind the evolution of human kind. Without it, our evolution would quickly stop. Rebelling against the rules can also be your competitive advantage. As we discussed in the first part, when you build a startup, you need to build it on something that’s hard to copy. We called this our secret sauce (I adopted this from Zero to One book by Peter Thiel). Let’s stick to this for a minute.

There is at least one reason why we should we build a startup on some secret. Let’s say you succeed with your business venture. You will create new groundbreaking product, maybe even new market or whole industry. What happens next is that other people will see your success and try to imitate you. The problem is that it doesn’t matter how big your secret is. Sooner or later, other people will find some way to duplicate it. When this happens, you have to innovate or find another secret. Otherwise, you are screwed. This is where we can apply our rebellious mind.

Imagine you will be able to build a startup by connecting secret sauce with rebellion. Let me explain what I mean. First, you will find a solution for certain problem or new way of doing something. Second, this solution or way will also contradict common sense and conventional thinking. This will make it twice as difficult for other people to copy you and create competitive business. SpaceX and reusable rockets are great example.

Elon Musk could create solid business by focusing on decreasing the cost of building rockets. In a fact, this is how SpaceX started. In the beginning, SpaceX goal was getting the raw materials for the lowest price and building the majority of rocket components in its own factory. This led to significantly cheaper rocket launches. We can think about this as our secret sauce – more affordable space travel through building and using its own rockets. This can be copied.

Elon decided to go one step further and challenge the conventional thinking about space travel. The most expensive thing on space travel are the rockets. Every time you use one rocket, you have to throw it away and build new one if you want to repeat the flight. Imagine that you would throw away your car every time you use it. That would be nonsense. Still, this is the practice of every space program. Elon decided to challenge this thinking by developing reusable rockets. You launch a rocket, bring it back, refill the fuel and you are ready to launch again. This is much harder to copy.

The Takeaway

If you want to build a startup that is hard to copy, dare to break the rules and challenge conventional thinking. First, use innovation to come up with groundbreaking product or service that doesn’t exist yet. This is the secret sauce of your business. Second, make sure your product or service challenges conventional thinking. It is not enough to come up with something new. Sooner or later, it will be copied. You also have to break all the rules the industry is built on. Don’t try to reinvent the wheel. Challenge the assumption people need wheel. This will lower the odds that someone else will copy your business.

No.10: Plan – Fail to plan, plan to fail

The last principle we will discuss today is the importance of planning. To plan, or not to plan? This question can be quite difficult to answer. You can give it a shot and ask couple random people. Their answers, and the length of the pause the will need to think about it, will probably surprise you. Some people will tell you a quote by Steven Blank “no plan survives first contact with customers.” There is just one problem with this answer. It is out of context.

If you read the whole article by Steven Blank on this topic, you will find that he is not actually discouraging from creating business plan. What Steven says that business plans are quite useful. When you decide to build a startup and convince yourself to sit down and write a business plan, it will do at least one thing. It will force you to think about all parts your startup is composed of. You will have to think about whether the startup you are about to build will be profitable.

Writing a business plan can also motivate you to question your assumptions and hypothesis. The problem arises when you think about your business plan as something you have to follow blindly, something set in stone. This is not what business plan should be about. It should be viewed as yet another assumption or hypothesis you have to test and then refine and adjust.

Another good way to think about business plan is to think about it as a plan for building a house. When you decide to build a house, you will probably never start before having a plan at hand. That would be stupid, right? Why do you want to do the same mistake when you decide to build a startup? Let’s use different metaphor. Imagine you are about to try skydiving. Would you just take the parachute and jump out the plane? No, unless suicide is your goal. You would prepare a plan for the case your parachute will fail so you would know what to do.

Beside that, you would also prepare a plan or procedure to follow for the case everything goes well. Again, that doesn’t mean you can’t change or adjust your plans according to situation. It just gives you something you can use and build on. In the world of startups, it is quite popular to build a startup without planning or even thinking. Then, it is no surprise that the vast majority of startups fail in first year or two. What else would you expect without a plan?

The Takeaway

Be smarter than the rest of the crowd and prepare some basic plan. Think about business as a way to test your assumption and hypothesis. Use it as exercise to question all parts of your business. Is it viable? Is it self-sustainable? How much do you need to make to cover the operating costs? How many customers do you need to get? Do you need to raise venture capital? People don’t understand that it is one thing to build a startup and another one to build a successful startup. Without a plan, the later is close to impossible. Remember, a bad plan is better than no plan at all.

Closing thoughts on how to build a startup pt2

Let’s again quickly recap what we discussed in this second part of how to build a startup mini-series. Sixth, whatever you do, you have to aim for being the best. You have to build a startup that offers incredibly great product and amazing user experience. Get in touch with your customers and ask them for feedback. If there is any problem, fix it immediately. After that, continually improve your product because this is the only way to stay on the top.

Seventh, create culture that encourages experimentation and openness to novel ideas. Make sure your team understands that fail is nothing bad and to be avoided. They have to believe that failure is just another way to move forward and find out what doesn’t work. Eighth, great companies are built on great people. You have to make sure that your team is full of enthusiastic, passionate and dedicated people. Hire only people who fit these requirements. After that, make sure everyone in your team is on board with your core values, mission and vision. Also, remember that your employees must know that their ideas and opinions will be heard.

Ninth, be bold, break the rules and challenge conventional thinking. Create groundbreaking products that doesn’t and make sure these products challenge conventional thinking. Remember that having something new is not enough. You have to break all the rules and conventions your industry is built on. This will make it much harder for your competition to copy your business. Finally, remember that having a bad plan is much better than having no plan at all. Think about your business plan as a way to test your assumption and see if your business is viable.

If something in your business plan doesn’t work as you expected, make an adjustment or pivot. Keep your business plan flexible and be always willing to leave it and start from scratch. I think that we should always keep in mind that there are many ways that can help us reach our goals and build a startup that will make significant impact on the world. And, as Winston Churchill said “never, never, in nothing great or small, large or petty, never give in.”

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By Alex Devero

I'm Founder/CEO of DEVERO Corporation. Entrepreneur, designer, developer. My mission and MTP is to accelerate the development of humankind through technology.

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