In the early stages of our startup journey, something that I continually noticed was that there was an abundance of startup advice and resources. However, very few provided tactical guidance on how to identify where you are in the startup journey and what next milestone/goal you should be working towards. The goal of this post is to provide advice and milestones, with the appropriate time-series built in.

Let’s get started. A question to ask yourself:

Do you have a product that users are paying for today?

If the answer is no, it likely means you are still in the discovery stage. In this stage, the goal is to identify an 11/10 problem (a “hair on fire problem”) that your customers would be willing to pay to solve.

In this case, I would highly recommend avoiding building ANY software until you can identify such a problem. If you’ve built a prototype/MVP, I would strongly encourage you to pause development (even though this may feel painful). It’s an easy assumption mentally to believe that “if they only had X feature, they would pay.” In nearly all cases, it’s because the core problem you’re targeting isn’t a big enough pain for your user base.(1)

So if you’re not here today, what should you do next?

Tactical Next Steps:

• Create a hypothesis around who your ideal customer profile (ICP) is and the problem you’re solving for them. The The Lean Startup has amazing frameworks here.

• Send outreach to individuals in that ICP
  • I found that generally, people are very receptive to doing these customer interviews (as long as they know it’s not a sales pitch).
  • LinkedIn
    • Example Message:

    Hi [Name], I'm launching an [industry] startup. I'm hoping to connect to learn about the challenges you face at [company] and in the [industry] space generally. If you’re open to it, how’s your calendar looking this week for a customer interview? -[Your Name]

  • Slack/Discord
  • Cold Email
  • Reddit Forums
  • Facebook Groups
  • Or ask folks in-person at a conference/meetup/etc

• Conduct customer interviews
  • Get a strong foundation of the problem space and individuals in your ICP
  • Goal: Assess whether the problem is an 11/10 problem that they would pay for
    • I would ask them “On a scale of 1-10 today, how big of a challenge is [problem]?”
      • If the answer to this repeatedly is below 5, it might be worth either a) changing the ICP of the customer you’re interviewing or b) changing the problem you discussing with them. You could also ask them “What 11/10 problems exist for you today?” and they might share some surprising answers.
  • Excellent “how-to” on this (How To Talk To Users)

• If you happen to be in the lucky position where a few folks say an 11/10 problem exists for them, talk to more people in the ICP to see if you can hear it 5-10 more times. At this point, you have a few options:
  • Go back to those set of users that expressed the 11/10 problem and ask if they’d be willing to work with you to solve it. There are a few ways to do this:
    • Ask them to setup a call and explain that you’d like to see if they’d be open to working with you to solve this problem for them. Now, you’re not just asking about the problem space, there are other factors at play - who they have to sell to approve this internally, internal standards for procuring software, etc.
    • One great milestone is to get a signed pilot agreement that says they’ll have to pay if success criteria X, Y and Z is met. This is a great way to minimize risk on their end while also providing a clear route to payment, the gold standard of market pull.
    • If you can’t get this, a verbal commitment is the second best thing you can do. Note: please treat this very lightly as the conversion rate here is far lower than many folks think.

Build Your MVP

Once you have a set of individuals that are ready for your product, it’s time to build an MVP.

Resources

• Eric Reis’s The Lean Startup is the bible of early-stage entrepreneurship. If you have one book to read about early-stage startups, it should be this one in my view.
• Michael Seibel’s How To Build an MVP is excellent.
• Paul Graham’s Do Things That Don’t Scale is also a great framework.

A Note on Fundraising

I would highly recommend folks wait until they’ve successfully answered the above question (”do you have a product users are paying for”) until you fundraise. If you raise money on just an idea, it is 30x harder in many cases (unless you have an incredible background), deeply distracting and even if you do raise money, you still need to answer the fundamental question (”do you have a product users are paying for?).

(1) It’s also important to note that there are minor problems that can exist. We encountered this first-hand at Navattic. In customer interviews, we heard from 50+ people in our ICP that pain existed around demo content management. With this, we excitedly built out an MVP over the next month. When we came back around to them, we were surprised to see that these same users were impressed with our product, but we just couldn’t get them to pay for our offering. While our sales skills weren’t great at the time, we started asking them (”On a scale of 1-10, how big of a challenge is this today?”. We got 2s and 3s across the board. It became very clear there was a problem, it just was a very minor one.