3 Steps to Tech Startup Success

Two out of every three startups won’t succeed, according to an article in the Harvard Business Review.

If you’re trying to get your tech startup off the ground, you’re probably clenching your jaw right now.

Relax. Lucky for you, Tom Eisenmann—the guy who literally wrote the book on startup success—has laid out a three-step design process that can help tech startups like yours avoid a false start.

In a nutshell, Eisenmann’s process is:

1. Define the problem your solution solves.
2. Develop the solution through iterative prototyping.
3. Validate the solution with MVP testing.

Let’s explore why this process works and what’s involved in each step. 

What is a False Start? 

If you’re like most tech entrepreneurs, building things is in your DNA.

Once you get a great idea, you’re eager to turn it into a product.

Your enthusiasm isn’t necessarily a bad thing; the sooner you get a product to market, the sooner it starts making money for you and your investors.

But when you jump into creating version 1.0 too quickly, you skip a critical step in the development process. As a result, you spend too much on early development. When product changes need to be made later, you’re out of funding.

Part of the problem, according to Eisenmann, is that failed startups implement only part of the lean startup approach:

“Specifically, they launch MVPs and iterate on them after getting feedback. By putting an MVP out there and testing how customers respond, founders are supposed to avoid squandering time and money building and marketing a product that no one wants.” 

Minimum Viable Products (MVPs) can deliver valuable feedback, and Eisenmann doesn’t deny that. But you run into trouble when you skip the research that needs to be done before developing an MVP.

It’s easy to fall into this trap. Unless you hire a custom software development company to do the work, you can end up hiring expensive software engineers too early.

And because you don’t want them sitting idle, you rush into MVP development without asking potential customers if your idea is something they will actually use. This, Eisenmann says, is what leads to startup failure:

“By neglecting to research customer needs before commencing their engineering efforts, entrepreneurs end up wasting valuable time and capital on MVPs that are likely to miss their mark. These are false starts. The entrepreneurs are like sprinters who jump the gun: They’re too eager to get a product out there.”

To avoid false starts, Eisenmann recommends a structured, three-step product design process.

Step 1. Define the Problem 

Before you hire software developers and start building MVPs, interview potential customers to define their problems.

Don’t talk about your idea at this stage. Resist the urge to describe your solution. Focus on listening to the challenges they deal with, the tools they need, and the features they crave.

Be sure to talk to both early adopters and those who may want to wait to purchase later. Success hinges on attracting both groups, but they may have different needs. You’ll need to address those differences in your product road map.

And although it may seem obvious, Eisenmann underscores the urgency of conducting a competitive analysis. As part of the interview, let your potential customers test rival solutions and give you feedback on your competitors’ strengths and weaknesses.

Don’t forget surveys, as well. Surveys can provide you with data you can use to segment and estimate the potential market.

Step 2. Develop the Solution 

Once you’ve identified your most important customers and explored their unmet wants and needs, it’s time to develop a range of solutions. At this stage, your product team should sketch out (often literally) prototypes for several concepts.

You’ll likely start with very crude prototypes. Some will be obvious non-starters, while others may need to be polished a bit more. However, each prototype iteration is a step toward the final product’s functionality and design.

Once you have some solid prototypes, it’s time to put them in front of your potential customers and get feedback. Unfortunately, many startups fall down at this point because they don’t want to meet one-on-one with potential users.

Whatever makes you hesitate, it’s crucial to your product’s success to get user feedback on your prototypes. It’s better to hear their criticism at this stage, where you can make changes to the design reasonably inexpensively.

And you will make changes. Prototype iteration and testing shouldn’t stop until you have a solid design.

Step 3. Validate the Solution 

Once you have a prototype that tests well with potential customers, the next step is to develop a minimum viable product (MVP). Like the prototypes, you’ll create several MVPs and test them in real-world settings to gauge the demand for your product.

MVPs, as the name implies, are actual products, albeit stripped down to the essentials. That’s the “minimum viable” part. As such, you can release MVPs to users for testing in real-world situations. Some startups release their MVPs as version 1.0, so not only are they getting that real-world feedback, but they’re also beginning to generate revenue.

When built effectively, MVPs deliver the least amount of functionality and polish needed to get reliable input. If you think of your product like a Swiss Army knife, your MVP has five tools and comes in one color. Your final product may have over 100 tools, several colors and cases, and so on, but before you invest in building it, you test the waters with the five-tool version.

Admit When You’re Wrong 

If you go through these three steps to startup success, be prepared to face the fact that you might have been wrong about what your customers want.

For most of us, this is the hardest part. If you catch yourself saying something like, “I know what the data says, but my gut just tells me I’m right,” beware. That road leads to failure.

Creating a successful startup means divorcing yourself from emotional attachments to your vision for the product. Listen to what your potential customers tell you and define the problem your product will solve. Trust their feedback as they evaluate your prototypes. See if the demand for your MVP matches your projections.

If you keep an open mind and trust the feedback you get, it may lead you to an even better product than you could have imagined—allowing your startup to soar. 

David Borcherding

David is a Senior Content Writer at Taazaa. He has 15+ years of B2B software marketing experience, and is an ardent champion of quality content. He enjoys finding fresh, new ways to relay helpful information to our customers.