Introduction

There is no single correct way to start a startup. It depends on your personality, strengths, leadership style,  what kind of company you want to build, how aggressively you want to commit to the project, what sector(s) you are in, what year it is and if the market is ready (or already passed up), how large you want your team, who you’re working with, how cash intensive is your idea, among a countless number of other factors.

Here are a couple ways to approach thinking about your first startup; one paragraph summarizing the  methodology/mentality of some of the largest names in the “getting into startups” world.

Clayton Christensen

When you're starting out with a new venture, focus on understanding the "jobs to be done" for your customers—what they are really trying to achieve in their lives. Don’t just compete; aim to create something that addresses a significant, underserved need. Start with an MVP that directly tackles this core problem, and use customer feedback to refine both your product and business model. My approach emphasizes creating new markets or transforming existing ones by understanding the underlying jobs your product or service can fulfill, rather than simply entering an existing market. Stay creative and methodical in your approach.

Tim Brown

Adopt a design thinking approach. Start by truly understanding your users' needs. Spend time with them, observe their behavior, and gather deep insights. Then, brainstorm potential solutions and create low-fidelity prototypes to test and iterate quickly. This method is all about user engagement and feedback throughout the development process, which sets it apart from traditional approaches. It’s a collaborative, empathetic process that values diverse ideas and user feedback. Keep your mind open and enjoy the creative journey.

Paul Graham

When you're starting out, focus on building something small and useful quickly. Talk to potential users, launch an MVP, and gather real-world feedback. Then, iterate based on what you learn. This approach focuses on solving a specific problem for a niche market before thinking about scaling. Engage deeply with your users, be flexible, and adapt as needed. It's all about making something people want and refining it based on their feedback.

David Spinks

One powerful strategy is to build and nurture a community around your product. Start by finding a core group of passionate users who share a common interest. Engage with them, gather their insights, and co-create your product. This community-led growth approach is different from traditional methods that emphasize broad market entry. It's about strong social engagement and collaboration. Foster loyalty and create a sense of belonging, and your community will not only support your product but also help drive its evolution.

Peter Thiel

Focus on creating something truly unique that can become a monopoly by being 10x better than anything else out there. Validate your idea with a small group of enthusiastic users and build a close-knit team that shares your vision. Have a clear, long-term vision and a systematic execution plan. Stay focused on your end goal and work methodically to achieve it.

Steve Blank

Start by getting out of the building and talking to customers. Don’t assume you know what they want—validate your assumptions with real-world feedback. Develop an MVP and use the build-measure-learn loop to iterate based on customer insights. This approach is all about validating hypotheses through customer engagement before scaling. Be detail-oriented and adaptable as you refine your product.

Eric Ries

The lean startup methodology is your best friend. Start by building an MVP to test your hypotheses. Gather data and use the build-measure-learn loop to refine your product. This approach prioritizes efficiency and continuous improvement over having a polished initial product. Focus on what’s essential, gather feedback, and keep improving. Efficiency and ongoing learning are key.

Tl;dr and FAQ based on these approaches

As the reader, you’ve probably noticed a fair number of similarities between each of these approaches. To be honest, though the arguments for a lean approach with iterative feedback from customers may sound redundant, each of these individuals are still worth reading/listening to — it’s not necessarily their arguments that are so novel from one another but rather the examples they use in their books to illustrate their arguments. One or two of those anecdotes will resonate with you and what you’re thinking to build and will prompt you to venture down the rabbit hole to learn more, which is a goal in it of itself (to be amped up enough to go learn the 101s of company building so you at least have the 101 traps to avoid as a first-time founder ringing in your head.

That being said, you may have some questions or doubts in your head, which are very valid. As I build my own ventures, I have found issues with many of these premises, which have become standardized in every business class, spread around Medium like gospel, and preached by early stage accelerators and incubator programs. Hopefully what’s written below can help address some of these questions.

Q: Is disruption always necessary?

A: Disruption can be lucrative but also risky and expensive. Instead of creating your own new market, incremental innovation is also a viable path. Know your startup’s resources and market readiness before committing to disruption #Disruption.

Q: Design thinking seems resource-intensive. How practical is it for startups with limited budgets and time?

A: Design thinking is all about deep user understanding and iterative prototyping. 100% this is time consuming. However, it’s often recommended by others because it helps first-time founders avoid pitfalls such as building something without a user in mind who would put down hard cash to buy — a year spent in the wrong direction can be more time-consuming and costly than committing to some design thinking exercises early on. As long as you keep a level head and situational awareness of what you’re building for whom and in what market, you can find balance between empathy and practicality/budget to avoid stifling innovation.

Q: Niche markets and rapid iterations.. Am I going to spend a lot of time refining something only 10 people want?

A: Niche markets can help startups gain initial traction, but yes it can limit scalability. However, for many founders, having steady income coming in from your service is critical to make that full-time transition. Also, a smaller market can let you build a fine-tuned solution where you can be the biggest shark in the smallest pond rather than vice versa. Even if you’re thinking to raise, go make some sales first to get a better valuation before thinking of broadening to a wider market.

Q: Is community building suitable for all products and markets?

A: Meh, sometimes. It might seem like a KPI to check off on your list, but it actually requires significant time and effort. David Spinks means something very specific when he talks about community building. Definitely read The Business of Belonging (at least the first two chapters till he gets through all the letters in SPACES). Otherwise, keep the community angle in the back of your mind, out of all generic early-stage advice, it can be some of the most useful advice and there are many low-effort actions you can take to make the most out of the community (of clients, users, etc) you’re building without going the whole nine yards.

Q: Peter Thiel’s approach focuses on creating monopolies and 10x better solutions. Is this realistic?

A: Difficult to attain and ambitious. Thiel’s approach is ideal for visionary entrepreneurs with “groundbreaking ideas,” but it might not be practical for everyone. Also remember the saturated market we are in. This isn’t the early 2000s when you can build an app for a sector and literally be the first app in the sector to add: 1) the “sharing economy” to a sector; 2) professional networking; 3) online payments; 4) analytics; 5) you get the idea. Thiel’s 10x performs phenomenally if you have the resources, particularly in times of plentiful funding and low interest rates when VCs are encouraged to waste away millions on hairbrained ideas and letting the US citizen foot the bill. Jokes aside, it’s still very worthwhile to keep in the back of your head.

Q: Continuous iteration, I’m sick of it. Excessive pivoting doesn’t always lead anywhere.

A: Continuous iteration and customer feedback are valuable, but you’re also right. Excessive pivoting can stagnate an early-stage startup. Balance short-term iteration with long-term goals. Make sure to actually go talk to tens of customers before forming an opinion on what the market wants. Be careful who you consider a mentor, there is a glut of mentors who haven’t ever actually bled for their own company but enjoy espousing generic “insights” you can read/listen to online. At the end of the day, no one cares about your ideas as much as you do, and while this can be blinding, it also gives you a sharpness and acuity to look long-term and know the nuances of your idea to a degree no one else has. Never engage in hubris where you make assumptions on what consumers want. There’s a common fallacy that since a founder has been in an industry for XX years, they understand what consumers want. Unless you have been on the “client” side (the ones signing checks and purchasing these services) at multiple levels in the “client” side business, drop the hubris and go talk to 30+ potential customers and iterate and strengthen your idea. 👍

Q: Eric Ries and the lean startup methodology is all I ever hear about. But there is no way I would ever bring an underdeveloped product to a potential client. Reputation matters and that lead is burned.

A: Be sure to know who you can bring MVPs to. Not everyone understands what you’re capable of and if you show an imperfect solution, that is how you will be branded in their mind. This applies dually to those close to you as well as strangers. However, there is incredible benefit to showing your imperfect, solution-in-the-works to others — it’s the same difference of a comedian who has only tested their jokes at home in front of a mirror versus the comedian who might not even have the wittiest jokes, but has performed countless times in front of a crowd and consciously assessed the amount of laughter per joke to fine-tune their material. You want to be the latter.

Therefore, bucket the contacts you have into groups, and fully leverage those that you feel will be able to help you along your lean startup journey while saving the people who don’t get it for when you have a honed service. In other words, don’t needlessly burn your contacts for the sake of the “lean startup,” save those people for pitching hard to and making a sale, but balance this with identifying those who understand you are capable of delivering an incredible solution and these early stages with an underdeveloped product is part of the journey there.

Q: Rory Sutherland talks about embracing unconventional ideas and psychological insights. Anecdotal or legit?

A: His book Alchemy is fully worth the read. If you have the notion that a better product is the main/sole determinant of sales and a higher price tag, and therefore spend 99% of your time working on developing your solution, read his book — it’s a wide world out there when it comes to marketing and actually making a sale. At the same time, his examples and lessons may not resonate to the early founder focused on product-product-product until they try and sell to their first client and realize how valuable understanding people and positioning your product is. So, something to keep in the back of your mind as you ponder your startup idea.

What to takeaway from this introduction

• Don’t build anything out with out talking to people first — build what users say they want, not what you want or what you think users would want based on hypotheses.
• Ask yourself, are you just trying to be smart or find a distraction or make your personal brand but wrap it inside of a project — or are you actually solving for a problem
• When gathering feedback — go to people who would actually buy the product, not the ones that are easy to get (e.g. family, friends) / your cheerleaders. Additionally, don’t gather a certain set of viewers and work with those ones in isolation either — get new eyes on the project as it evolves.
• Less is more. Focus on building out a solid MVP solving a problem people are willing to put down cash for rather than loading up on features early on.
• It’s implicit and never really stated by any of these authors directly, but there is a certain set of ideas that have a “snug” fit with users (think Goldilocks and the three bears). Some ideas are too narrow in the problem they solve and it’s more a single feature that you’re selling — let’s say a B2B PDF optimizer. For these types of ideas, even if you get down to a very specific audience that you’re serving, some may not purchase because it’s already covered in a package they purchased or it’s not worth going through procurement for a tool too meh to get excited about. On the other hand, some ideas are too broad — let’s say a digital workplace toolkit encompassing a CRM, PDF optimizer, you name it. In these cases, even the perfect customer might say: “I already have a package that does this called Hubspot (or whichever fits the analogy). Look your idea sounds great but the switching costs are too high, you overlap too much with our services.” This is an oversimplification and there are 100% good reasons to build a single feature or a broad suite, but make sure to focus on something precise and achievable that people will get excited about and bring to their boss/sign a check.
• It doesn’t have to be exceptionally groundbreaking/innovative — it can fit into a larger market but needs to have a differentiator (pricing, feature, niche group of people etc)
• Community-building can be nice but isn’t always essential — you don’t always have to have a group of devotees where your product is their lifestyle / bridge / identity etc
• Rather than get hung up in the “proper way” to build companies — take your own approach to it (within reason. For example, not talking to people and receiving feedback is a no no). Sometimes, startups get hung up on user research and mockup revisions. This costs time and cash. Maybe, that startup is building too many features and therefore is hung up on this stage. So have some confidence and engage each step but don’t go “fully textbook” on your build

Steps to preparing your idea

Prepare your idea

Tentative timeline for this entire stage: 2-4 weeks. Keep the momentum going, work fast. Set aside dedicated 4 hour blocks to do the not fun things (e.g. go open a million tabs to understand competitors in the market). Coming up with an idea and refining it isn’t a fun process, it’s hard (but rewarding) work.

1. Brainstorm many ideas, understand what you’re passionate about
2. Market research for your ideas, understand your target markets and their needs, as well as existing solutions
3. Competitive Analysis: Research competitors, Identify their strengths and weaknesses, Determine how your solution stands out and offers unique value. Consider why competitors already in the market haven’t done x, y z things that you are considering for your own business. Assess whether your value proposition(s) match the customer market. How do your competitors frame themselves? You don’t need to reinvent the wheel, they might have identified and articulated the problem better than you ever could. However, maybe their solution isn’t the right one.
4. Idea selection, based on feasibility, profitability, your interest level, expertise, etc
5. Concept development, outline your core value proposition, target customers, potential revenue streams
6. Business model canvas, writing out all the important elements to your business (e.g. revenue streams, what you’ll be doing (i.e. key activities), customer segments, etc). Do not feel the need to fill out the actual business model canvas that you can find on Google. Instead, feel free to use it as a general reference but design your own. Consider being expansive and writing out a business model canvas that intersects between your various ideas and find the best fit across the canvas you map out. Create a basic financial model for costs, revenue, profitability, and your break even point. Consider the different models of business you can run (e.g. not all businesses need to take millions from Silicon Valley and be unprofitable for years. Consider a lifestyle business, a small business, etc as well).

Vet your idea

Tentative timeline for this entire stage: 1-2 months. For the US government’s SBIR program (promoting startups), their “Phase 0” accelerated program of understanding the market and scheduling and having 30 conversations to understand potential customers is 1-3 months depending on who is operating the program. While this might sound like a healthy amount of time, it’s actually really, really short. Scheduling enough conversations and knowing when to pivot and adjust your idea and when to bypass new findings/advice you’ve received is an art. Make the most of this stage before the sunk costs of designing mockups and development.

1. Talk to trusted people (advisors, mentors, friends) and get feedback on your idea/concept
2. Share the idea with potential customers, force people to fill out surveys, share the idea on your Instagram and add the voting options
3. Create your own system of organizing and analyzing the feedback you’re receiving.
4. Revisit your business model and canvas, matching and reassessing feedback with your initial assumptions
5. At this point, feel free to ditch this idea. If it is infeasible, costly, low demand, etc — put it on the shelf. Maybe you were too early to the market and you can revisit it in a couple of years. Maybe you don’t have enough money to take the risk developing it, start with an idea that immediately generates revenue or one with a low initial investment barrier.
6. Consider alternate business models. Instead of selling as a SaaS business directly to customers, what about batch licenses? Enterprise sales? Sell to the upper 1% of the market before broadening use to the general market?

Strengthening your idea

Tentative timeline for this entire stage:

• Finding a team — this is completely up to you, but never rush it just to fill the roles.
• Designing mockups, similar to development, this depends on the complexity of the project but if you’re building a standard SaaS service and properly solving for a key problem rather than building out a maximalist version of your personal dream of a product, mockups should take 1-2 months and development another 1-4 months.

These numbers are completely dependent on what the project actually is, but fewer months means you’re bringing something to market quicker and can pivot with fewer sunk costs in time and financial investment.

1. Get passionate. If you need to rekindle the idea in your head, try explaining it to someone else or riffing off each other to answer these questions — oftentimes, you’ll find the spark again in why you got so excited about this idea again in the process of answering these questions:
2. Get me excited about this idea. What problem exists in the world? Why are we solving it? What's so special about this new way of doing things/thinking about it? If solving this problem is so important.. Why doesn't it exist already? Or does it exist.. and it's done badly? Why haven't people tried to solve the problem? Is it a problem that needs solving? That people would put money down for? Who? So based on everything we’ve been saying, where would you start? If we prioritized a list of features based on everything we’ve been saying, what would they be? If we prioritized a list of people to talk to, who would they be? How do we access these people? Let’s make a roadmap to talk to at least 70% of them.
3. Build a team that compliments the project you’re building. Balance keeping the team lean (there’s nothing that quite kills a new company like strategy that is continually revised and argued upon by too many cooks in the kitchen) with bringing in skillsets you need but lack. Having more eyes on people who will be executing on the idea earlier (particularly the developer working in sync with the designer who both work in sync with the founder/product manager that receives consumer insights) mitigates the risk of parts not talking to each other as well as gaps in the build
4. Remember, don’t be a dumb dumb about equity. It’s your project and no one will love it as much as you do, ever. Read up on how to divide equity and favor advice online/in books that suggest a dynamic with one person in charge who fronts the risk level in terms of time, blood, sweat and tears and therefore receives the lion’s share, and everyone else fairly compensated but receives significantly less equity (with standard vesting terms (e.g. 4 years, 1 year cliff, vests quarterly) even if they are your best friends). Respect them with their skillsets through fair equity compensation agreements and also respect them in not over-asking/demanding their undying commitment at all hours of the day. It’s your project, manage it accordingly. Have an understanding between team members of who gets paid first. When you all land a client, where does the money go? Equity and revenue splits can be two completely different percentage breakdowns and leverage this to fairly compensate people as well as to bring people to the table that you otherwise could not because the equity would be too costly. Remember, equity is everything, it’s not something to casually give out. Think of a developer or designer on your project that you only need for 1-3 months. Sure you could compensate them with equity, but you’re setting yourself up to have less equity down the road; on their side, they might feel expectations to contribute long-term but this is not a project they are particularly passionate about. Consider cash upfront and a small revenue share that caps at $10,000 to compensate them fairly, yet without touching equity
5. If it’s in your skillset, build an MVP prototype in Figma (depending on the project, the prototype could be substantial/interactive enough to mirror the actual product experience, which leads to fantastic user insights on usability, interest, etc)
6. For SaaS platforms, not build an actual MVP until you have gone through multiple versions of mockups → receiving feedback from actual users interacting with the mockups → more revisions → then consider developing the workable MVP
7. Be careful of building niche features that you as the Founder are interested in, versus listening to what the market and your interviewees have actually told you they need
8. Finally, after multiple revisions and thorough vetting, build the working MVP (or minimum lovable product — go read about it #semantics)
9. At this point, you should have early adopters in the pipeline from all your conversation, as well as an ecosystem around your idea. If you don’t have early adopters, that means you either were talking to people who believe in you but are completely irrelevant to the idea and would never purchase it themselves (meaning you were talking to the wrong people) or you didn’t do enough market engagement in general. Or... no one wants your product and you should shelve it
10. Refine your marketing and go to market strategy. Think sustainable, pulling in the money you need and giving the time you have to work on the idea for the next year or two. Don’t think grandiose, those fizzle

Good luck!