As a venture builder, we are often approached by ventures who need support in resolving problems that have arisen as a result of poor foundations.
When I speak about foundations, I’m referring to the core building blocks, that if set up correctly, create the support pillars that will enable the growth & scaling of your venture into your seed stage and beyond.
If these foundations are set up incorrectly, it can result in an unintended rebuild of your product, re-design of your organisation or the raising of more money, to fund re-work, that wasn't necessary in the first place.
We are continuously working on developing our ‘blueprint’, our bible of experiences where we keep track of the common themes that we see with successful ventures that we wish to replicate, and mistakes we see that we aim to avoid.
In this article, I’ll share some of the common foundational failures that we have identified over time that we aim to avoid; hopefully you can keep these in mind when setting your own startup up for success.
Idea & Validation Foundations
Everything starts with your idea; if you build anything based on an unvalidated idea, you are setting yourself up for failure.
This is something that happens more often than you may think, and is one of the most common foundation failures that we see with founders that approach us.
A founder building too much, before they even had enough evidence to support their idea in the first place.
We often speak to the importance of validating your idea before building anything, and these are really principles we at The Delta live by when it comes to building our own ventures. We strongly endeavour to ensure that we have enough evidence to support an idea, before we start with the development of any product.
From simply talking to your customers, to putting together prototypes and user-tests, to running Wizard of Oz or Concierge experiments; the process of conducting experiments will shape and guide the product you end up launching to market and will provide you with vital data to increase your probability of achieving product-market fit.
We released an in-depth eBook that dives into how you can approach the validation of your idea; in it we outline some of the light-weight experiments you can conduct in order to set these strong validation foundations.
Another suggestion is to leverage frameworks such as the Strategyzer framework, or the Disciplined Entrepreneurship 24 step process. These are robust frameworks developed by some of the smartest minds out there, that firmly guide you towards ensuring your idea foundations are set up to support the next stage of your venture.
If you are not sure how to start, you can always book a session with one of our venture architects who can work with you to plot your validation roadmap.
Tech & Product Foundations
If you’ve successfully validated your idea to the point where you are ready to design and develop your MVP, then there are still some major decisions and questions you will need to answer.
- What exactly is my MVP trying to prove?
- How many features should I include in my MVP?
- What should I build first?
- How should I build this?
- What technology should I use?
- Do we really need to build an MVP or are we validated enough for a V1?
- How scalable or scrappy should my first version be?
The decisions you make here will impact whether you end up rebuilding your product in the future.
We have a number of cases where founders come to us having made the wrong decisions at this point and have ended up rebuilding their product entirely.
It is important to take your growth objectives, your budget and your roadmap into consideration when picking a piece of technology. Otherwise it can result in wasting a lot of time and money on something that was never going to work in the first place.
For us, the phase of planning the MVP is a pivotal step with our founders where our product strategists will work with our solution architects and the founder to analyse what strategy will work best, considering the short but also long term goals of the startup. It is not something to be rushed.
Part of what we do at The Delta is ensure that we are up to date and aware of the latest technology available to enable us to launch MVPs and PoCs, and we understand the pros and cons of each option. Our goal is to figure out the best technical approach, which is feasible within the available runway of the founder, while achieving their product objectives.
For us right now, a general rule of thumb (with as any good rule - comes with exceptions) is that unless your product requires third party integrations and or is in a regulated industry such as HealthTech, Fintech or Insurtech, you should be able to get away with launching a low-code / no-code MVP.
There are a number of great platforms available to founders that are adapting at an incredible rate to handle increasing levels of scale (Glide, Flutterflow,etc); this means you can build your first MVP using these tools, and potentially operate for a long time.
We often refer to WorkWeek as a low-code success story, where we built their low-code MVP and they continued to onboard over +40 business customers and operate for over a year before they even considered upgrading to a custom build. This is a great example of how you can really build much leaner and cost-effective MVPs, while achieving your product goals.
If you need help figuring out your product and tech strategy, watch this space. We are working on a recommendation assessment which will ask you a few questions and provide you with a report to help you make the best decision for your venture. In the meantime, you can always reach out to our Head of Product Thijan and ask him for advice if you are busy figuring out these foundations.
I’m not sure if you’ve seen those memes about the first-time founders? Marketing and sales foundations are areas that are often completely deprioritised by founders, because the team gets so excited about the product and this becomes their core focus!
Unfortunately, the rumor is not true - if you build the product, they will not ‘just come’.
You need to have a solid go-to-market strategy in place and unfortunately, this is always more challenging than you anticipate.
We have noticed that founding teams who do not have strong enough sales or marketing experience, tend to set up weak foundations to support their go-to-market efforts. This typically results in them struggling to commercialize.
Understanding the different techniques used to approach a B2B vs. B2C market will be invaluable in helping your startup achieve success. The strategies you will need to employ, will vary drastically based on your model and you need to make sure that the people you hire into your team have the relevant experience.
Our marketing strategists are often pulled in by seed stage ventures, who are struggling to commercialize their business; our first step is to perform an audit of their go-to-market strategy.
Some of the issues we often find are that they:
- Don’t have clarity regarding the ICP (Ideal customer persona) & persona they are trying to access (Or they are not being specific enough for fear of “losing” a sub-segment etc)
- Because of this they are focusing on completely incorrect marketing channels, or just have completely misaligned expectations with what can expected from certain channels (e.g. expecting social media marketing to directly drive enterprise inbound)
- Their brand voice and tone does not compliment who they are talking to - in effect there is misalignment between what the customer cares about, what the brand is offering and the way in which they are offering it.
- They are unaware of key techniques they could be leveraging in order to gain access to their customers.
If you set up your foundations correctly in the beginning, which is basically just understanding the lay of the land for your type of product and your type of customer, it really will remove so many unnecessary barriers in your growth. Quick wins that you should focus on:
1. Define your ICP - who is your ideal customer profile?
2. Define the buyer personas - who are the people you are talking to and really work to identify:
- What drives them?
- What pain points are you solving for them?
- Where do you find them?
- What jobs are you solving for them?
- What is important to them?
- Understand where these personas hang out - how are you going to find them?
3. Chat to an expert on going to market / do some research on the best practice for reaching that customer with your type of product.
4. Define your strategies by stage of how you will reach these customers.
5. Map out your ideal customer journey and the different touch points you will need to support. Identify your weak points of your customer journey.
If you do not have this expertise in-house, bringing in someone with experience early on in your venture to help you understand the correct tactics, channels and ways to set up your team can be the foundations you need to set your commercialisation up for success.
I remember with my first startup, getting the product working was my absolute highest priority; as soon as I had it working, I couldn’t wait to release it!
Unfortunately, things didn’t seem to be go as well as I thought they would and, to make things worse, I had absolutely no idea why - I had completely forgotten to implement analytics.
Panic ensued, and there was a complete scramble by the team to quickly deploy something to give us visibility; needless to say I never forgot to implement analytics again.
Incorporating analytics in your product is critical to being able to evaluate whether you are moving in the right direction and is something you need to incorporate from the get go. Incorporating analytics as part of your product foundations enables you to:
- Understand if and how customers are using your product.
- Identify issues or pain points they may be experiencing.
- Minimise customer turnover.
- Maximise customer retention.
- Run A/B experiments to guide your product decisions.
Especially at an early stage, these insights will guide your product development decisions and priorities. Without analytics, you are flying blind and are reducing the pace at which you could be making progress.
Regardless of whether you are launching an entirely new product, or a new feature within a product, my suggestion is that you introduce the product analytics process as early as possible. This should be tied into your development process, and every user story you develop from a product perspective should always have the analytics requirements included (otherwise you will end up having to go back after the fact to do the implementation).
When approaching the development of your product, always ensure you:
- Establish the success criteria that you are looking to measure
This could be transaction size, number of users, number of transactions, time spent within a particular feature; it will be up to you and will correspond with your business goals.
- Identify the journey the user will need to undergo before achieving that success
Understanding where drop-off is happening is important; often you may put triggers in to measure that specific success metric, but none of your users end up getting there. Understanding where drop-off is happening before the user is able to perform your intended action is vital in understanding why users may not be achieving what you intended.
- Setting up your triggers within the software of your choice
Once you have your success metrics and your journeys defined, you or your team will need to set up triggers within the tool you decide to use in order to access these insights. Tools that we at The Delta leverage for our startups use include Matomo, Mixpanel, Tableau and Google Analytics.
Organizational Role & Goal Clarity
In Measure What Matters, John Doerr talks about how his gift to Google when he first met with them, was the OKR framework, a framework for tracking their progress, and measuring what matters.
I'm a definite believer in building strong goal setting foundations, however I also believe that this needs to be supported by foundations outlining who is accountable for what.
Clarity in regards to accountability (the roles), your north star (mission) and how you are going to get there (strategy), is something that developing as a part of your culture early on, will create stability and autonomy as your team & business grows.
The bigger your team grows, the harder it will become to introduce change, roll out new frameworks and drive stronger accountability.
The earlier you incorporate strong accountability and goal setting into your foundations, the better. These role & goal foundations will make it easier for you to hold your team accountable, as you work collectively towards a shared goal.
Our CEO Louis spoke to this recently in a LinkedIn post where he affirms that role clarity results in:
1. Clear expectations within your team- unlocking faster improvements within your business.
2. Business strategy and goals clarity within the organization earlier
3. Clarity when it comes to hiring & performance management - you can quickly identify risks of fit & skill (potential competence risk).
4. Accelerated impact by advisors, who are enabled to understand your business much more quickly.
Without role clarity, performance management becomes impossible. Without objective clarity, prioritisation and autonomy within your team will be difficult to achieve.
Adopt this early; build accountability and goal clarity into the foundations of your business.
While there are many other areas of your business that you will need to get right, these are a few of the most common areas where we see problems arise in our work with startups.
If you can be sure to keep these in mind, as well as the suggestions and recommendations listed here, hopefully you will avoid the common failures that we tend to see so often.
It’s important to note that we are continuously working on and improving our blueprint. I don’t think it will ever be finished; it will need to evolve, as the way we run businesses evolve, as technology evolves and as the way we build startups evolves.
But for now, if you can focus on getting the foundations mentioned in this article right, I think you are off to a good start.