Fred Wilson, an investor and partner in many technology start-up companies, recently posted some key themes from successful start-ups he has been involved with. These came from a talk he gave to an MBA class recently. I pulled out a few of the items below, follow the link for them all: A VC: MBA Tuesday.
- There is a very high correlation between lean startup approach and the top performing companies in our two funds.
– Lean startup methology is great, but it is really a lean startup culture you want.
– Lean startup is a machine, garbage in will give you garbage out.
Lean in the context of NPOs and associations means you don’t throw large teams, budget, or formal volunteer committees at the challenge as you start up. Being starved for resources forces you to focus on only those actions that will move you toward your goal rather than building process for the sake of process. My good friend, Seth Kahan, wrote extensively about this in his book, Getting Change Right.
More from Fred:
- Early in a startup, product decisions should be hunch driven. Later on, product decisions should be data driven.
– Hunches come from being a power user of the products in your category and from having a long standing obsession about the problem you are solving.
– Domain expertise to the point of obsession is highly correlated with the most successful entrepeneurs in our portfolio.
Associations have a huge advantage in this arena: our most active members are the most obsessed about their field or industry in the world! The trick is to work with them to inform and energize the start-up project rather than saddle both them and you with an unwieldy process that stifles precisely the creativity you need to be successful.
- Monetization should be native and improve the experience for users.
If you expect the new product, service or outcome to pay for itself in the future then it should have revenue built into it from the get-go. If not, you’re unlikely to add it in successfully later. This doesn’t mean it’s profitable from day one. But a product or experience with a revenue component built in from the start doesn’t have to be reinvented to add it in later and it trains your customers or users to pay for it over time.