How to kill your idea before it even starts
Its not about what you know, its all about what you don't
Hope you’re having a better year than most!
Lets kick-off! Today we’re talking about:
🔥The flywheel of death when validating product ideas
🔥The single biggest reason startups succeed
🔥How amazing companies acquired their first users
The Product Validation Flywheel
There are 4 things you need to look out for when building a business. And each “thing” is considered a wheel in a car.
That’s because even without one, your car won’t move / its a recipe for disaster
Getting the product right
Understanding your market
Strategising how to reach that market
Defining the pricing strategy for that market
The ideal order is to figure out the toughest piece based on your skill set and work backwards. i.e If you’re a marketer who understands distribution, figure out how you’re going to build your product first.
This is a summarization of IndieHackers’ Founders YT video
”Poor distribution — not product — is the number one cause of failure.” - The Bullseye framework
The single biggest reason startups succeed
Bill Gross built and sold ALOT (100) of companies, he created several billion-dollar businesses off his parent company Idealabs
He broke down business success into 5 core factors:
But what he discovered after analysing his companies was not that the “Ahaa” moment of having a genius idea was what built success for him but instead what he discovered was:
Timing of business accounted for the majority of his successes. And this is very true, lets look at some examples:
YouTube launching right at the advent of high-speed internet
AirBnb launching after the GFC where people were looking to make extra money
Same with Uber, launching at the time when drivers were looking to get into the system
You can watch the full video here:
How amazing companies acquired their first users
Some of these stories are shocking, some inspiring. So lets breakdown a few examples of early-stage growth:
Pinterest founder would go to nearby Apple stores and set the default website on safari be Pinterest. So when users would be waiting around and open safari, they’d land on their website. Safe to say they got banned from a lot of the Apple stores
They recently sold for $100M and in their early days would create 100s of proxy Reddit accounts from different IP addresses to post on Reddit as they’d often get banned for self-promotion
The founder would go door to door selling their bars to gyms across the city. Their story is unique, sales blew up when they changed their positioning. Their packaging is very famous, they uniquely put the 5 ingredients each bar is made of on the front. This blew their business up.
AirBnb’s famous growth hack was to silo ads from craigslist to their system. They used a pre-existing market and an API loophole to engineer a lot of AirBnbs posting to craigslist too (since craigslist had the traffic) - this drove a lot of users to AirBnb
Played on the privacy emotion incredibly well. If you go to Quora and search for the founder of duckduckgo (Gabriel Weinberg) you’ll see he’s got ridiculous traction. He used the Quora’s platform to hit the nail on a very personal topic like privacy that drove him significant traffic (each answer of his has >10M views)
Aaaannd that draws to the end of this weeks newsletter folks.
If you’ve got any stories you’d like for me to cover, please reply back and I’ll try make that happen
See you next week! And in the meantime hit me up if there’s anything