Yesterday’s post here about the Rev1 Concept Academy in Columbus, Ohio, described how entrepreneurs in the program are benefiting from the combined business investment and operations experience of Rev1’s leaders. They’re learning how to determine whether their business idea is truly worth pursuing. Those who decide it is then abide by the Rev1 philosophy to “acquire customers first, then build products.”
Admission to the Concept Academy is by invitation only, and, for now, restricted to founders in the mid-Ohio area. But the Rev1 executives shared these six steps to early stage success with Yahoo Small Business readers:
1. Know your customer. “Nothing else matters if you aren’t building something people will want to buy,” says Rev1 CEO Tom Walker. “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.”
2. Let customers fund your product. The advice from SVP of Entrepreneur Development Mike Blackwell is: “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.”
3. Be intellectually honest. EVP of Venture Acceleration Wayne Embree says 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.”
4. 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,” says SVP of Investment Funds Ryan Helon. “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.”
5. Start with your ‘Total Addressable Market.’ SVP of Venture Acceleration & Development Dave Bergeron explains that the Total Addressable Market 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,” he says. “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.”
6. 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,” says Chief Marketing Officer Kristy Campbell. “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.” Campbell advises founders to base messaging on the answer to a question: “What job is my customer hiring my product to do?”
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