Startup Success 101: Top Tips for Startups at Concept Stage
It’s no secret that concept stage companies face the toughest challenges. According to a recent CB Insights study, this is an extremely vulnerable group because of their limited financial runway and uncertainty about whether the market needs what they’ve built.
That’s why the team here at Rev1 spent so much time creating and perfecting Concept Academy – a program dedicated to helping entrepreneurs validate a product’s market before they spend the time, money and resources to build a company around it.
Entrepreneur Ryan Sevey, co-founder of Nexosis – a predictive analytics platform – witnessed this first hand. He attended the program in March.
“Had we not gone through Concept Academy, we would’ve been going down the wrong path and would not have been developing something the market really wanted,” he told us. “Instead, within a few months of working with Rev1 and strategic investors, we were able to secure clients who told us they would buy the solution we were building.”
Rapid customer validation is just one of the positive results startups are seeing from Concept Academy. Attendees have also reduced the time it takes to secure their first funding from Rev1 by 31 percent – from an average of 269 days to a mere 187 days from the time they first attend Concept Academy.
If you live in Ohio and have a product concept, we’d love to hear from you and see if you’re a fit for an upcoming Concept Academy session. Simply submit your idea here.
We know every entrepreneur could benefit from the fundamentals of Concept Academy, so below we’ve compiled the team’s top tips for early stage success:
CEO Tom Walker says…know your customer.
Nothing else matters if you aren’t building something people will want to buy. Concept validation should be your starting point. Start with your target market and get honest feedback from them. Sit down with them and honestly listen to their input. Survey them.
SVP of Entrepreneur Development Mike Blackwell says…let your customers fund your product.
Don’t spend a dime on developing a functioning product until you can prove you are building the right product. Create a prototype that serves their needs (the ones they’ve told you has the right set of features). If they agree, they’ll sign up and write you a check even before you build it because “they have to have it”, which is the greatest validation of all.
EVP of Venture Acceleration Wayne Embree says…be intellectually honest.
This is a tough one. Many entrepreneurs are so passionate about their idea that they will hold onto it – teeth bared – even after they’ve lost barrels full of money. In my 20 plus years of backing hundreds of startups, the most successful entrepreneurs are able to take market input and refine their product – heck even abandon it – to meet a market need.
SVP of Investment Funds Ryan Helon says… align your funding needs with key milestones.
One of the most important investment considerations at the concept stage is aligning your near-term capital needs and use of funds with achieving commercially relevant milestones such as securing early customers, product development, and identifying talent to build your team. Demonstrating a track record of successful execution and positive results will increase the value of your venture and improve your chances for successfully raising your next round.”
SVP of Venture Acceleration & Development Dave Bergeron says…start with your Total Addressable Market.
This is the entirety of your market if you could sell to EVERYONE who could potentially buy your offering. Once that is identified, narrow it down to the subset you can realistically reach. Drill down even further to understand the segment you will target in your startup’s first 36 months. This funnel approach should serve as the foundation for your business model and plan.
I say…the messaging matters.
In the concept stage, it’s all about knowing what your market wants and aligning your product – and your message –with customer pain points. A cool name, a logo and your Twitter feed may be important eventually, but in the beginning it’s all about the customer’s experience. Be sure you can answer this: what job is my customer hiring my product to do? That’s how you position your product and is the basis for your messaging.