What does it mean to be a start-up?
There are startups in all sizes and shapes, from software development to a well established 10 people company. But what is it that defines you as a startup? and What does it mean to be in a startup? In this blogpost, Ill tell a bit about our experiences and learnings so far. But also about some of the struggles we are currently facing.
A startup: "Startups are companies or ventures that are focused around a single product or service that the founders want to bring to market. These companies typically don't have a fully developed business model and, more crucially, lack adequate capital to move onto the next phase of business." -Investopedia
Translated: "A startup is a couple of idiots, that have an idea, that is not completely developed yet, and they are always out of money. " - Kim
Most of the time we meet start-ups of 2 or 3 people that are working on something innovative. But sometimes we meet a startup with a staggering 20 employees. Then we wonder, "but how??" well, they got an investment. An investment is where you give away part of the start-up in return for money. The earlier in the development you do so, the more shares you have to give away. When established, you sell off your company (called an exit), cash in money, and pay the investor back *10 or you fail miserably and the investor and you get nothing.
Since we don't we are not ready to give away 50 percent of our company we are doing all of this with our own money and time. This means that it does go slower, but also that we are still the ones that are in charge. And it is very motivating to think big decisions over very well, since it is your own money that goes to waste if you fail. Talking about failing...,
This picture shows our pretty unsuccessful first launch of the passive speakers. Some friends showed up and some people who thought that there would be food. But no buyers. Why? What have we learned? What should we do better next time? By reflecting, these sad experiences turn into positive learnings. Now we know, next time, we will get a live band on a sunny day at a place with lots of foot traffic where unknowing people will find suddenly find themselves with a pair of speakers in their hands.
So why am I admitting to doing things wrong? Well, we do things wrong all the time. Having a startup is not a walk on roses, or at least, its a walk on roses with the pointy things still on them. But since failing is inherently part of a startup, it is key to fail fast, and cheap. This is where the so-called MVP (minimal viable product) or Pretotype (Alberto Savoia) comes in. The above-managed launch didn't cost us more than some bottles of soda, 1000 flyers and some SoMe marketing. The location we had for free and we had plenty of leftover soda to drink for the rest of the month.
The most important thing in a startup is to know your market and your customer to know if they will buy your product. This is also one of the most difficult things to pinpoint. The minimal viable product is a technique that is very good to test if your assumptions about the market are right.
So for example. Dirk and I want to know if people will buy our speakers. Because it is one thing to say: "I would buy them because they are so amazing". But once drawing a wallet, you would probably think again. How to test this took us quite some brainpower, but the solution is simple (ish). We will try and find a store, that will "sell" our speakers for a week. Once the customer draws its wallet, they will get a coupon instead for a discount for when we are ready to sell. If nobody will buy our speakers, then we have to think again, but we didn't waste too much money on the development of a product that nobody wants. If people do want to buy it, we have proved both for us and possible investors that there is an honest interest. Now there is one more problem with this scenario, which is called, Covid-19 and lockdown.......
To learn more about this, there is a great video and book from Alberto Sovoia, founder of differend Google products and more. https://www.pretotyping.org/#. A real recommendation.
Now there is way more to tell about what it means to be a startup. If you like me to write more about it let me know! and don't forget to subscribe for our newsletter, so you know when we post a new blog! @ Top right on the blog page :) lospeakers.com/blog