Silicon Valley is famously the birthplace of the technology and brands that are fused into our everyday lives. It’s where good ideas rapidly become products and services used by billions of people every day. Most people know that Silicon Valley is home to the most well-funded venture capital firms that can scale up a business with an endless supply of cash. What most people don’t know is that there is a growth strategy that entrepreneurs use in this tech hub to go from an idea to a massive valuation at break-neck speed.
This is the process of coming up with a pantry of good and bad ideas to choose from. There should be no judgment at first, the goal is to compile at least 10 ideas before applying any filter. Once you have at least 10 potential ideas, narrow the field with criteria like passion for the project, size of the problem, and value for solving the problem.
2. Minimum Viable Product (MVP)
After narrowing down the ideas, entrepreneurs should use landing pages, brochures, or slide decks to present gauge how potential customers respond to an offer. Crucially, this does not involve any product development at this step. An entrepreneur can simply see if customers are willing to click the “buy” button on the page and when they do, the site says “this product is not currently available – register your interest”. The key thing to measure here is customer engagement.
3. Product-Market Fit (PMF)
The MVP stage should reveal which idea is the best to focus on and now you can begin to develop a product. At this stage, the entrepreneur takes a product into the market with the intention of rapidly iterating versions of the product based on customer feedback. The goal is to achieve greater and greater customer satisfaction by making adjustments to the product or service. Normally, entrepreneurs deliberately limit the number of users to a smaller group while establishing a good fit. At this stage entrepreneurs are measuring customer satisfaction.
4. Go-to-market (GTM)
Now an entrepreneur has honed their product, it’s time to take your product out to a wider market. This is about ramping up marketing and making sales activities. The entrepreneur and their team are trying to find a repeatable way of generating attention and making sales for their new product. At this stage, the entrepreneurs are measuring allowable customer acquisition cost (AAC) based on the lifetime value of a customer (LTV).
Once the entrepreneur is making consistent sales, they begin building their business to meet the growing demands. They recruit a bigger team, build a brand, formalise their culture, and secure additional funding. It’s important that they build systems and processes to ensure the business can cope with the growing complexity of their organisation. They might also seek a mentor, coach, or advisor at this stage to ensure they are doing the right things. This is when a business sets and reviews its own objectives and key results (OKRs).
There comes a point when a business would be better off in the hands of “grown-ups”. Once the product is proven and the company is making money there are several ways to sell the business. The entrepreneur might merge with a complementary business, sell to a private equity fund, get acquired by an established corporation or even conduct its own initial public offering (IPO).
7. Give back, invest or go again
Silicon Valley has a culture where successful entrepreneurs who have made money often become mentors, angel investors or they use their experience and knowledge to build another business.
Even if your business is not planning on reaching “unicorn status” there’s a lot to learn from this approach. Many entrepreneurs get caught up on one idea without exploring others, many develop a product too soon without testing it cheaply on real customers and many get stuck under a weight of complexity before they have a chance to succeed. Following these 7 steps is a way to learn from the best entrepreneurs in the world and maximize your chances of success in business.
Article from: msn.com