What are the best-kept secrets about startups?

First off – there’s no magic to start-ups.

The best kept secret about start-ups (especially for first time entrepreneurs) is that you don’t have to re-invent the wheel to be successful.

It’s a secret because, in my experience, young entrepreneurs don’t want to hear the advice that someone has already solved 98% of the problem you want to tackle and that they should focus on the remaining 2% to increase their odds of success.

2 Quick Examples:
1) Website – every start-up wants a super flashy website (even if they’re not a web company) and so they invest tens or hundreds of hours into making the “perfect” website (which they typically don’t have the in house skills to make). The end result is that they have a mediocre website and wasted tens/hundreds of hours instead of doing customer development. Time and money would have been better spent on a $50 WordPress theme (that doesn’t even look like WordPress) and 2 hours to setup the site. You can, literally, launch a WordPress site on a brand new domain and get basic content on it in 20 minutes.

2) Fundraising – same tune here. Every start-up’s dream is to raise money. Why? Primarily pride. If more start-ups spent their time focused on adding value to their customers, more would get funding! Investors want a return on their investment, not another cool sticker for their MacBook Air!

From comments on LinkedIn (where this was originally posted):

I hear this all the time: “How will I know if my customers will like it until I’ve built it?” The answer is “rapid-prototyping” (aka “just fake it”). Do you really want to invest all the time and effort it takes to make a product only to find out no one wants it? Well you may want to, but I wouldn’t invest in that entrepreneurial process. Savvy founders find ways to demonstrate demand before they build.

Examples include:
Man Behind the Machine (aka artificial artificial intelligence): You hypothesize that you can grow your customer base by giving existing users rewards for tweeting at your Twitter account when they achieve the next level? (or whatever, just an example). Go manually give rewards to the users instead building a complex feature with many moving parts (back end integration, API integration, cron jobs…etc). Sure, it’s hard work, but it’s smarter than building a feature based on your unproven hypothesis.

Fake Landing Pages: You want to test your price point, product descriptions, images, names. Make a quick and dirty page with the info you’re testing and then force the user to click a well-defined call to action (“Buy now”, “Subscribe”). Collect their info and then send them to a “product not available” or “out of stock” page.

Mock-ups (aka looks-like, feels-like): Did you know that the very first Palm Pilot was a block of wood? Jeff Hawkins walked around for a full month with a hunk of wood in his pocket, literally stopping on street corners, imagining what his life would be like if he actually built one. Cost: A BLOCK OF WOOD.

Focus on high ROI experiments.
Hypothesize, predict, test, analyze, repeat.

* not Jeff’s actual mockup…

Bottom Line: The best generic piece of advice I can give to the founders of a start-up is to focus on adding value to their customers in such a way that the start-up can capture a piece of that value (aka monetize).
If you spend your time and energy seeking out something customers will pay for (instead of on your website, wasting your lawyer’s time, premature fundraising, over-engineering your product, etc), then I can guarantee that you’ll learn a hell of a lot and be much more likely to be successful.

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