STEP 1: Pick a Product and a Market

This is the 2nd of a series of 7 posts about the steps to launching a product. You can find the introductory post here. Step 2 is here

So you want to launch a startup.

First thing to do is to pick out an idea. Its sounds simple, but I do know that for a lot of us, this can be pretty challenging – its either we have too many ideas or none at all. The secret is to choose to commit. If you have too many ideas, and its already bogging you down, force yourself to commit to a few ideas and eliminate those you feel lukewarm about. For those who feel “none of my ideas are exciting,” I find that this is usually a confidence thing. You have to take a deep breathe, box out all the negative thoughts from your head, and choose. I don’t think you would be reading this blog if you didn’t have some ideas in mind.

The 3 circles exercise, detailed here, can be quite useful in helping you finalize a pool of ideas you can seriously consider. Remember, it is extremely important that you select a field which 1) you are passionate about, 2) which people will pay you for, and 3) something which you are genetically great at. Using the 3 circles, you might end up with something like this:

“great web design”


“baking marvelous cookies”


“finance auditing”

These are actually still pretty broad categories to consider building a startup around.

So focus on researching on your field of choice, with the intention of narrowing down your idea further. Why do you need to narrow down your idea?

Let’s say you are an artist who wants to start a web design firm. Go research. You’d find out that there are different subgroups and services categorize under web design, such as html programming, flash design, logo design, CMS set-up, site optimization, social media design and management, “clean” site engineering, etc…. They also service different markets: corporate, the government, small businesses, individuals, etc…

Understand all of this. Research. Use these services yourself. It’s important to understand the entire industry. It is only when you understand things – and the gaps between things – that you can truly innovate. It’s tough to innovate with the wrong assumptions.

Then, niche.

Unless you are a gazillionaire, it would be difficult for you to just go after the broad market and take on every single one of these services. Since you have limited resources, the wise thing to do is to divide and conquer. You have to go after a more specific subgroup. Besides, its way easier creating a name for yourself as the best in _______, rather than a generic supplier. The more focused you are, the more likely you can create something worth noticing. You have to niche and niche some more.

This was the process when we were cooking up Streamengine. We could have gone broad and created a “one-stop shop” of web services. But this was expensive, and not so strategic. So we focused on videos, then we focused some more and decided to do online videos, and then focused some more on motion graphics videos. This is what we want to be best in – online motion graphic videos for businesses.  I think this is a much better strategy than targeting everything.

Whats important to remember is to get out into the world when you do your research. It’s tough to “just rely on your gut” that there is a huge market. Talk to people. Talk to veterans in the industry.

If, after your research, you realize that your idea of choice wasn’t as hot as you’d thought, then congratulations, you can cross it out of your list and move on to the next idea in your pool.

Remember that ideas are cheap, so don’t spend more time than is necessary in this step. Step 2 (co-founders) is far more important than this step. That’s up next!

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Launch Your Startup in 6 Steps

So you a want a startup map? Here’s one.

This 6-step process is heavily influenced by my own experiences, and 2 canonical entrepreneurial books: Steve Blank’s 4-Steps to the Epiphany, and Eric Ries’s Lean Startup. Both obvious recommendations.

Again,  please note the differentiation here between a startup and a small business.

Here we go.

For a lot of us beginners, our idea of a startup goes like this: we have an idea, we build a product, market it, and then wait and see if it sinks or swims. So essentially, we take a guess and see if it works. This process IS risky, because if you invest a lot of money in the product development and the marketing, and it fails, that’s it – you’ve lost. In a way, it is also egotistical, because you THINK you know what the market wants, and go to market with it. This was actually how we started, and I wouldn’t recommend it.

There is a large difference between: “Oh, if we only get 5% of the market, that’s a million customers.” and that million people ACTUALLY opening their wallets to buy your products. You have to explore that gap.

You can largely mitigate the risk by testing out your idea with actual customers and iterating accordingly.

Here are the steps. I will cover each of them in detail over the course of the next 6 posts. Links will appear below as the posts are published.

1. Pick a Product for a Market

2. Pick Your Co-founders

3. Build your MVP (Minimum Viable Product)

4. Gather Feedback From Actual Customers

5. Iterate (and go back to 4 if necessary, when ready proceed to step 6)

6. Launch!

When we think of launching a startup, its mostly about art. Steps 1, 2, 3, and 6 are all about art: the art of picking a business opportunity (step 1), the art of selecting your founders (step 2), the art of actually creating a working product (step 3), and the art of selling a product (step 6).

Steps 4 & 5 basically incorporates the scientific method into the process. Your MVP becomes your hypothesis, and you basically test it out during step 4. Using what you will learn, you now iterate – and calibrate your MVP. Then test it out again.

Until your hypotheses is proven right.

Then and only then should you launch.

Step one in detail, next!

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