How to launch a startup
The winning strategy is to go in stealth mode through the developing period until you’re ready. Then invest tons of cash in a first week of launch, creating a big boom in the market. Right? Totally wrong!
If you’re a first time founder and you’ve already half way through development. Or you’re more closer to the end and getting down to your Pitch Deck. Everything is crystal clear, but for the “Go-to-market” slide which you have no idea about. Still, there is certainly some time left, you will figure it out when the product is completed.
Well, if you think this particular way we have some bad news for your: you might be already in trouble. You’re totally wrong presuming that the winning strategy for a successful launch is to keep secretive about your technology, and invest in a loud marketing when the product is ready for the market. The concept about going hush-hush while building an amazing product and unleashing it on millions of enchanted users is a complete myth.
Demystifying stealth mode
There are certain grounds for this myth. It might have worked 10 years ago. And only for spin offs of large corporations. However, after the unfortunate Theranos and Elizabeth Holmes who used this particular front of “top-secretive technology” to cover up her inability to actually develop what she’d promised, the stealth mode concept for a startup launch became extremely unpopular. Moreover, if you start getting traction only after the product is launched it usually causes suspicious and disapproval from investors. In other words, most successful startups do the opposite. They speak to as many users as possible. Successful startups don’t really have a “launch”. They only iterate on the idea validation process.
Validating idea is a must have stage for a startup. Customer interviews and surveys, all stages of customer development process, deep data analysis and visualization — you have to live through it all BEFORE you actually get down to the development process. Asking your best friend, whether she’d pay you $100 if you sold her problem straight away, is not the best way to validate your idea. However, asking 300 friends on how they perceive their problem and how do they solve it now is a much better approach that will let you at the very least get the idea of if there is a problem to solve.
On the other hand, what if you don’t have 300 friends? Still, it is a stage you have to begin with, and constantly get back to, as you move along. In other words, launching a startup is not a linear “waterfall” process. When, for instance, you start in point A (idea), move to point B (development) and then to point C (launch). It is a circle or, more likely, a spiral. You move from the concept to validation, to review, to development, then validation-review again, new round of development, validation…and so on and so on.
Moreover, every spiral loop you’re gaining more unique knowledge of your customers, more insights on their behaviour and perceptions. Likewise, your product as well as it UI design is constantly changing, gaining new high priority features and losing some less popular ones. When does the launch occur in this model? Probably, on the very first step, when you come up with an idea.
However, there are certainly some winning strategies and tips that you can use, learning from successful startups. Running through one of your spiral loops you’ll have to choose tools to build your first users base. The question is, what specifically you’d have to use? Or can you use everything and see what’ll work out.
Certainly, the best way to approach it is to use trial and error method (that is to say, give a run to every marketing trick you might think of). Or is it? Lenny Rachitsky from AirBnb in his recent research shows that it is not the case. Most startups he reviewed found their early users from just a single marketing strategy. A few like Product Hunt and Pinterest found success using a handful. No one found success from more than three marketing strategies at a time.
Go to your users
The most popular marketing strategy for a startup launch today is considered to be a direct communication with your users. You might choose different ways to connect to them: offline (like, going to student campus) or online (using social media or newsletters). For instance, run cooking classes (virtual, if necessary) if you’re launching a food-related product or service. Organize hand craft fairs (like Etsy used to do) if you targeted audience is crafters. Your users are iPhone lovers? Go to Apple stores and see where you can place your brand there (it exactly what Ben Silbermann from Pinterest did — he went to Apple stores and changed all computers to say Pinterest).
Do you remember how Netflix was launched? Corey Bridges had joined every existing DVD owners community and group months before Netflix was born. He introduced himself as a cinephile, joining conversations on DVD and movie buffs. He befriended major players, fanatics, critics, commenters, moderators. Eventually he would informally inform all these people of a new site called Netflix. For months before the launch he had been planting seeds that would pay off. Big time.
Another winning strategy for startup launch is to create a “waiting list”. It is, actually a variety of direct communication method, though this one presumes that your users must have at least some interaction with your perspective product to join the waiting list. The easiest way to implement this idea is to launch a “fake” landing page (in a sense that it advertise an inexistent product). Describe your product, future features, customer benefits and offer discount for users who leave their emails to be notified of the launch. Most importantly, you’ll have to run a Google Ads or social media campaign to get some traffic on your landing page. Firstly, you measure CTR. In other words, how many people are actually interested enough (that is, hurting enough to look for the solution) to click on the add.
Secondly, you jump on the conversion rate. Make sure you’ve put a clear call to action. For instance, “Type your email here and hit Send to get a 50% discount”. If you’re unsatisfied with the conversion you might play around a bit with copy and visuals. If your CTR is around zero, do the same trick with your ad copy. But if after a number of iterations you see that both CTR and conversion are low moving further with your product as it is would be a waste of time and money. On the other hand, if CTR is high while conversion is low you might have a point there. It means, your idea have legs. There is a problem and people are anxious enough to solve it. However, when they get on your website they get disappointed. Meaning, you address the issue from the wrong end. Or don’t have enough insight on consumer’s expectations. In this case, go back to stage 1: customer interviews and surveys, data analysis and visualization.
Moving up the spiral, you’d eventually get to MVP stage. Fake landing is a long way away and you’re ready to showcase your actual product with some limited functionality though. The question is, do you really have to try to sell your services? Or keep on with “free beta mode”? General agreement for now: follow Master Yoda’s advice.
“Do or do not. There is no try”.
Meaning, you should definitely go ahead with selling your product on the MVP stage. Moreover, selling only once doesn’t count as validation. If it is a short sales funnel (i.e. — there are not more than, 3 clicks from call to action to a purchase decision) sell at least 10 times to make sure there’s a market for your product. It the funnel is long or your monetization model is indirect (e.g. — you hope to collect revenue from advertisers), sell at least twice.
The main purpose of this stage is to establish the funnel and create a functioning feedback loop. Get more and deeper customer insights, not receive the payback for money you’ve already invested. Furthermore, it’s not the best time to test your pricing model. Though, you might be tempted to do just that. Setting up and testing out pricing models is a different science. It implies conjoint analysis, competitive analysis and market analysis. It all will come later when you get your product-market fit. And when getting down to “go to market” slide in your first Pitch Deck you’ll laugh out loud with relief saying to yourself: — Luckily, I’ve already done all the heavy lifting.