We often hear startup stories of success: the unicorns who disrupted an industry in just the right way at just the right time. But 90% of startups fail, and those stories are rarely told. One way to help reduce the likelihood of failure is ensuring a strong business foundation. Ease CEO and co-founder Nathan Harris shares the four keys to strategically building your startup.
1. Focus on what you’re willing to fail at, and never give in
Plan A will never be a guaranteed success. Plan B, C, D, and E might not be either. Besides being passionate about your idea and your company, be willing to fail at it and try another angle. Have the drive and ambition to maintain momentum through the obstacles and challenges. You’ll inevitably encounter barriers — many of which you won’t expect — and you can’t quit.
2. Find your audience
How many people are interested in your service or product? How much are they willing to pay for it? Do the research to determine your market size and customers’ price sensitivity. Whether you find a smaller or larger audience than you anticipated, refine your business goals to match that market. Learn as much as you can about your audience; it’ll influence your marketing, pricing, and more.
3. Determine your customer acquisition strategy
Once you discover your audience, and narrow in on them, figure out how to best capture them. For some startups, inbound marketing strategy might include SEO, content, social media, or email. For others, in-person interactions, publicity stunts, and partnerships might work better. Understand where your audience is likely to engage with your offering, and through what channels they might engage.
4. Calculate customer value
How long do you expect your customer to stay with your company? In other words, how long are they actually going to be your customer? The lifetime value of your customer helps you forecast your business’ overall sustainability. Lifetime value (LTV) is calculated as customer value — how much and how often they’re bringing you business — divided by customer lifespan — how long you expect a customer to stick with your offerings. Learn more about these customer calculations here.
These four keys are your foundation. From there, you build a brand, a culture, and a startup. Take the passion for your idea and match it with customer research; this will allow you to target your audience in the right place and time, and at the right price.