During my high school years I played basketball. One thing that stuck with me more than anything from my experience was that the difference between teams that won and teams that lost was fundamentals. Coach Howard would tell us day in and day out that taking care of the ball, reducing turnovers, making free throws, getting the ball inside, playing solid defense and controlling the pace of the game were all essential. It finally paid off when we made it to the championship game in my senior year.
What does this have to do with web startups you ask? Well, since that time in pretty much any competitive game, I’ve noticed that there are a few key focus areas that separate winning teams from loosing teams. You can grade a team based on these things and predict very well how they would do. After spending the last few months working on a web startup, I’d like to share the things I learned first hand and the fundamentals that governed the game. Please excuse my naivety if this post seems obvious, or overgeneralizing to you as I sure didn’t know these things well enough going into the process and had I read this post I may have been that little bit more effective. Hopefully it’ll help someone else out there trying to do the same.
The three fundamentals I found were the Idea, Traction and Technical Execution. Each of these has equal weight. Now let me go much deeper into each of these to explain why they’re important, what I really mean by each and more specific details.
The idea is essential to the business, however commonly too heavily relied upon as someone thinking they can have a great product. The idea for me, is more encompassing than the typical “I have a business idea!” with no more further thought. It includes things that people like Paul Graham would ask you: “How big is the possible addressable market? Who are your competitors? How will you make money? Does it fix a need or problem people have? What’s new about your idea?” This is where the Lean Startup movement really shines because basically you quickly pivot until you find an idea that works. You define an idea that works by one that finds traction readily available. The better the idea the easier the traction will be to aquire.
Can your team sustainably put together a solid product and iterate? If you’re going to compete in a red hot market like web startups you need to have the chops to code a product quickly and iterate on it to improve it. In some rare cases technical execution can be nearly all you need; These are typically areas that are on the edge of what is possible technically, where the idea is more obvious and can provide first mover advantage if executed.
Technical execution is everything from design to site speed. Its the quality of the product you have produced. If you’re Zappos its customer service, if you’re Netflix its streaming bandwidth and if you’re TechCrunch its the quality and relevance of your posts. I say sustainably because writing good code is only a small piece of pulling a product off. You need to be able to have a nice work environment and work together as a team. Politics and disgruntled team members will distract you into ruins unless you’re vigilant.
More precisely the ability to gain traction. This was one of the realizations that hit home the hardest: you can build the best product in the world, that everyone wants and still fail. Relevant people need to hear about it. Good startups will have a plan (not “Well, we’ll just post it on HackerNews”) for getting people to actually start using and continue using their product. I feel like most web startups these days fail, not because the idea sucked or the team made a bad product … but because no one ever heard about it.
Google stole market share from Lycos, Yahoo!, Excite, AskJeeves and the like through having better search results. Their superior PageRank algorithim drove traction through an established business/product model.
Facebook seems like traction wizardry to me. It came into a market already dominated my MySpace. However going after college students first and starting in the best place to do that (Boston, MA is probably the best/largest college “town” in the world) was a brilliant circumstance that I think led to its success over MySpace. College students share things … fast, and have enough time/willingness to try them out.
Startups need to focus on one question: Are you building something well, that people want, will pay for and will somehow hear about?
Lacking in any one of these areas can kill off your startup entirely. Most startups need to beat their competition in all three fundamentals and blow them away in one.
Discussion on HN: http://news.ycombinator.com/item?id=2530902