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The Perfect Startup in 2012

Originally submitted: May 10, 2012

After my 4 year startup adventure with mobile virtualization, I realized that there is indeed a secret sauce to startup success. I closely examined the most successful startups in 2012, and came to some conclusions about the success patterns. I collected them here, that will lead to the Perfect Startup of 2012. Startups are by no means perfect, but I use the term to define great success. The next Google, the next Facebook, the next Instagram… and so on.

The right idea matters

There is a strong debate nowadays about how the idea does not matter and the team matters. It is true that idea does not matter as long as the team is strong. But the statement must be read correctly. Yes the right idea can be chosen later, if the team can execute. But picking *any* idea is not a great strategy. Because a successful startup relies upon multiple external factors to come in alignment for great success. If one of them isn’t there, you may not fail, but you cannot reach level of great success. (And usually it is good to aim high since you always end up shooting for a lesser result)

You want to do something and you have skills. You have ambition. You are hungry and foolish. But you are low on funds. How do you bring up a successful startup that may swing for the fences?

Step 0: Let go of your ego and passion

First of all – you must let go of a couple things: you must get rid of your ego, and your passion. Yes, it is a well known fact that being passionate about something is the most important thing in a startup, but let’s get rid of that first, and let us start with a blank sheet. Your ego has no place here, either. You must let go of these things, to avoid them direct you into something that puts you away from the right idea.

Crafting the right idea

So how do you craft the right idea in any given time? The perfect idea requires crafting as it fundamentally depends on external factors that will lead to success. For example: timing, technical feasibility, uncharted market, a new distribution opportunity, state of competitors, and so on. If you don’t craft, and start building a solution, later on you will end up hitting one of these walls. That means you will have to change what you have built, and waste a lot of time. Even worse, you may continue to do what you have started, and waste even more time 🙂 So crafting the right idea will save you a lot of time. It is true that you will have to validate your assumptions and re-iterate. However, a lot of aspects of an idea may be well thought out in advance.

1. Virality

The right idea must not depend on large budgets for marketing and advertisement. It must involve sharing and people in some way. If it depends on interaction between multiple people, if the experience and value of the product increases with the number of interacting people, all the better. Your idea must depend on a viral aspect. If it doesnt, you will need substantial marketing and advertisement, which will likely disqualify your idea to become the perfect startup. Marketing and advertisement are important, especially during ignition stage, but there must be an open path for user numbers to explode without requiring you to also increase marketing efforts substantially.

2. Passion 

If you work on an idea that aims to win the hearts of ordinary people, that means you have a chance to stimulate passion about your solution. That also means strong virality, and users. Instagram and Flickr conquered the hearts of people with photos. Anything that involves music, video, images, writing, good looking design, love, relationships, anything that stimulates great feelings and taste in people, anything that is cooler than anything else that looks similar, has potential to reach millions of users. For example any B2B business would not fit this category. If you build a social application that is boring to use, then it is also not a good idea.

3. Distribution

Your idea, if is good enough, must have the logistics ready to reach millions of users without lifting a finger. For example as of May 2012 the best such distribution platforms are iOS,Mobile, and Web. Can millions of people, if they wanted to, try your solution through a channel? Is the channel open from the start? E.g. can they use this channel today? if the answer is no, then there is a big problem.

4. Value

This one I think is hard to get right. Is your solution valuable? Capturing the value is a very subtle and important issue, and has to do with finding the right problem to solve. Among many mobile photo sharing applications it was only Instagram that grasped the correct problems to solve: 1. Photos not looking good 2. Upload speed is low 3. Sharing photos is hard. The more you grasp the problem, the greater the value you create.

5. Doing one thing well

The solution must do one thing well. This is very important. If you create a social platform with too many uses, it will not work. It does not work for a couple reasons. Firstly, a service that does multiple things confuses users. Second, it is hard to maintain multiple features and keep them all perfect. Doing more than one thing is a lose-lose situation.

6. Simplicity

The best ideas are the simplest ones. Youtube: share videos on the internet. Could it get any simpler? The best ideas are the simplest. If you can explain your idea in half a sentence, it is a great idea.

7. Focus

Let us assume your solution may apply in multiple markets. You must let go of all those markets and pick only the most promising one. Do one thing well, and do it in one market. Forget what competitors are doing in other markets, once you pick the one that is most promising. If your competitor who is also a startup, is trying its hand in multiple markets, all the better for you, they will fail.

8. Originality

If you get everything above right, that means you have an idea that has all the buzzwords in it (social, viral, mobile and so on). That means it will contend with many startups and it is very challenging to differentiate. If your idea isn’t original, you have a chance of success if competitors have little to no market share. If the idea is not original and a competitor has a solid market share, it means you are too late.

When twitter started, it was an SMS solution between 50 people. There was not even social networking, and data plans weren’t widely available yet. So being early to a future trend can create an original solution.

That means if you prepare to ride a wave that is not yet here but obviously coming in the near future, you may be able to create an original solution before others. That means you must scout for the next big platform or trend and sense it in advance.

9. Coolness

This extends on the idea of passion and originality, but it is so important that it deserves a separate section for more details. The mightiest startup of our time will ultimately have to be cool and hip. For example, I genuinely believe there is still room for cooler ideas, as facebook and twitter are not cool enough. Myspace had a coolness factor that Facebook did not have for example. I stayed distant to facebook for quite a while, because it wasn’t feeling cool to share every update I have with so many people that I know. Create a cooler experience for the very same idea that 10 other startups have, and you will win the hearts and become original. The cool thing about being cool is that not everyone can do it. So if you can pull it off, you become original and stimulate passion automatically.

10. Flexibility

If your idea is not flexible enough, you will have hard time pivoting into a different solution. For example if you are a hardware startup building a hardware platform, it will be very difficult for you to re-shape your solution into another one. This flexibility is necessary, because most of the points listed here are variables. They vary in time and chances are that some assumptions about them are wrong. So if you have a software team consisting of UI designers and backend engineers for example, chances are that they can design a different UI and backend and steer the solution into a space that users need.

11. Users

The most important aspect in a startup are the users. You must be always thinking about users. You know how people say Always be closing (i.e. a sales), or Always be hiring.I would say, Always think about users. Users come first, and technology, sales, marketing, development, blogs, website design, hiring, strategy, and anything else you think in a startup come later. Will taking the next step increase your users, then take it. Do not lift your finger in any aspect of your startup without thinking about the users. If you are not obsessed about users, it is very easy to sink time in build a feature, a solution, a team, a company, a technology, a marketing channel, without having any users.

12. Short Validation Cycle

A short validation cycle for an idea is a really useful insurance for success. Is this an idea that stemmed from scratching your own itch? Is your product useful to you, while it is still an alpha with almost no users? If the answer is yes, you have a great means of validating and polishing it by self use, before anyone else tries it. If you can start using it yourself while it still is an alpha, then you have a great tool for a short validation cycle, which will help shortcut product polishing, user experience, and validation of its value.

To sum up, your idea must be simple, do one thing well, has stemmed out of you scratching your own itch, involve people and sharing, be cool and original, stimulate passion in people, offer a lot of value to users, is flexible to changes, have readily established logistics to distribute to millions of people, focus in a singleuncharted, or potentially segmentable, large market, and users have already shown interest in it via various means without you having built the solution yet.

Passion and Ego

Now that we filled our blank sheet with a carefully crafted idea, it is time to add our passion and ego into the equation. If you have a soul, chances are that while picking the idea, you have already blended in your passion into the equation, as our brain tends to push us in areas our character is attracted to the most. Startups are very hard to build, and passion is the most important driving force while executing the idea. It adds meaning to what you are doing.

It is just that if you decide on your idea solely by your passion, you will very likely get one of the above points wrong. Some of them will be an afterthought, and you will likely end up trying to retrofit your idea into a different distribution channel, market. You may very well end up successful with your startup, but it will likely not be The Perfect Startup.

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