If a CEO, who build a multi-million dollar venture-funded company gives advice to entrepreneurs, would you listen to it? Heck yeah! When a successful CEO speaks, it’s always a good idea to listen to their advice. In this week’s Startup Q&A, I cover the advice he gives startups.
The best advice from successful startup CEOs is to get to money quickly. Meaning, makes some sales right away. True sales are the only real validation of an idea, so the sooner you can get someone to pay for your product, the sooner you’ll know if you’re really meeting a need in the market place.
Having a product available isn’t enough. When you start a company, you make a lot of assumptions, like “Do people have enough need for my product?” and “Will they pay for my solution?” You have a hope that what you’re offering and at the price you’re selling it at, will be sufficient for sales, but you don’t really know until someone gives you money. Before that, it’s just an untested assumption.
As soon as someone (or a lot of people…and not your mom) pay for what you’re offering, your assumption is validated and you know you can move on to the next step in your business.
So what’s the best way to get someone to pay you? Find a problem a lot of people have an solve it. The bigger the problem, or pain point, the more people are going to be willing to pay you and the more they may be willing to pay you. Solve a small problem, you’ll make smaller money.
The issue many new startups face is they try to solve a problem no one has. Sometimes it’s tricky to know if the problem is large enough to bother with, which is why it’s so important to make some sales right away to know if you’re on the right track and if you need to pivot.
In addition to solving a large problem for a lot of people, a startup CEO gave the advice to think about what you could do to make something that people use every day. Think of some of the most successful services, like Facebook, Uber or Spotify. They’re services or goods that people use constantly. If it’s an online product, it’s a product that people constantly use and may pay an ongoing subscription for. A subscription business can be a great model.
For more tips from the startup CEO, watch the video below:
0:40 – Get to money quickly
1:10 – Find a problem & solve it
1:25 – #1 most common mistake startups make
1:49 – Define your audience & how to reach them
3:00 – What not to focus on
4:40 – Make something people use every day
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