Get the hacks and cheats to get your startup off the ground with this Lost And Founder summary.
The startup movement is one of the most significant shifts in the modern business world.
Now, with a good idea, better pitch, and a few investors, you can create a company from scratch.
But don’t think the startup world is easy. The confirmation bias of the select few who become household names protects you from the fact that the startup world is super hard.
Lost and Founder was written by Rand Fishkin, or, as he’s more commonly known as “that guy with the kickass mustache from MOZ.”
Rand is a super-interesting guy, and it shows in the book.
He also knows his ins and outs of SEO, which he demonstrates below.
Anyway, back to scheduled programming…
The three main lessons from Lost And Founder are:
- The venture capital route is full of challenges
- Some growth hacks and minimum viable products do more harm than good
- Look after your existing customers before expanding
Lesson One: The venture capital route is full of challenges
The thought of bootstrapping your startup can be challenging. Especially when you can just get investors to fund your dream for you…. well, that’s a typical thought process anyway.
In reality, working with investors isn’t like that at all.
When you take on investors for your startup, your freedom is limited. You now have KPIs to meet and deadlines to reach.
Most investors won’t sit back and watch you work at your own pace. Most of the time, your investors have their individual investors who they’re looking after.
The truth is, when you take on investors, you have to meet their expectations. There is an added pressure to get quick results.
So make sure you choose investors wisely and make sure you have plans for success before taking on VC money.
Lesson Two: Some growth hacks and minimum viable products do more harm than good
The startup world often preaches growth hacks and minimum sustainable products as the key to success, but at times, they can do more harm than good.
Growth hacks often substitute long-term success for short-term wins.
Sure, selling more early in the process is essential to create a good company (and healthy balance sheet). Still, you must ensure you don’t let it cloud your judgment on future strategy.
At times, the sight of a healthy balance sheet today will deter you from making improvements to your product and investing in tomorrow.
Minimum viable product (MVP)
The MVP model is used in a lot of startups, but knowing when to use an MVP is essential.
If you’re a fresh startup, then perhaps you can get away with an MVP, as you don’t really have any reputation to lose.
However, if you’re established and trialing an MVP for a new wing of your business, you may want to re-think your strategy.
For example, Moz launched an MVP, the Spam Score product, in 2015.
While there was some positive feedback, Moz suffered massive backlash as the product didn’t meet the standards of the Moz users.
The result was $500,000 flushed down the drain and a lot of bad publicity.
Lesson Three: Look after your existing customers before expanding
A lot of failed startups shit the bed after being too successful too quickly.
Growth becomes an obsession, and looking for more funding becomes a major priority.
A lot of the time, this is at the expense of looking after the customers that you already have.
There is no point in getting as many people as possible in the front door if they exit straight out the back.
Customer retention is the foundation of any successful company. If your withholding is broken, you’re just attracting more customers who you’ll quickly lose.
Start with one product, do it well, and make sure your customers have the best experience possible. That is the simple way to ensure you don’t succeed yourself to failure.
The thought of multiplying is often a trap. I find the addition of new customers enjoyable and almost like cracking a code. However, working on retention is always something I have to put any effort into.
If you’re looking at funding options for your startup, start to consider if getting funding is even right for you seriously!
Sure, having that extra money to play with is exciting. Still, sometimes the added stresses and pressures – and loss of freedom – outweigh the positives.
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