99% of all startups do not have to fail.
This post is no. 6 in a series about startup validation, called Testing Tuesdays. Get future posts straight in your inbox by Subscribing.
I've said it before... If you're anything like me you wake up with 10 new startup ideas every day. The paralysis by analysis is real. Rather than being the man with a billion dollars in ideas and none in his pocket, there is an approach that you can use to filter ideas faster than you can say 'NoCode MVP'.
The Law of Startup Failure
"99% of startups will fail within the first 10 years."
Startup success is a numbers game. The more we build, the more unicorns will emerge. That's why VCs will be quick to tell you: "Just Build." From a macro perspective it works. For the individual founder however, it does nothing to reduce risk. Don't get me wrong, entrepreneurship is risky either way, so don't become an entrepreneur if you're uncomfortable with uncertainty. However, 99% of startups do not have to fail if we start applying some method to madness. Even if we can limit it to 98%, that's a 100% increase – if you follow. The method I am speaking of, is of course: Validation. The structure? A funnel:
The Launch Funnel
Playing the numbers in your favor.
NoCode allows solo founders to build MVPs like we used to build splash pages. You no longer have to bet everything on one horse, and hope that it will reach the finish line. Founders can now place multiple smaller bets. Reduce risk. But: more outstanding bets, also means more metrics to track. Launching multiple ideas may have become easier – it has also become easier to lose track of them. With multiple products pulling you in multiple directions, how do you determine which darlings to go all-in on, an which ones to kill? Enter the Launch Funnel. The Launch Funnel is based on the 5 Levels of Validation, minus Fit for Scale. I'm going to go out on a limb here and assume you won't reach scale in your first 12 months as a founder. I'm also assuming you already have a number of ideas you are excited about, but if you do not, you can add Zeitgeist Fit and Founder Fit to the five levels*.
Ask the question: Are you the right person to build this, based on your personal 'Why?'? Basically: can you, and do you want to, be the best at providing this specific solution? I will also tackle this in a separate post.
permeates the 5 levels, and starts being relevant even before Problem-fit: Does your idea fit the socio-economic context? The method is less of a validation, and more of an exploration of trends and developments in your domain. I will tackle this in a separate post.
*both warrant their own post, which I will write up in the future.
The idea behind the Launch Funnel is that:
Thanks to NoCode, builders can launch multiple side projects and funnel them like startups in an accelerator.
All ideas start in the Problem Fit stage. You have an idea, which you assume solves a problem.
The goal of the funnel is to progress your ideas stage to stage.
Ideas have to meet specific needs in order for them to progress to the next stage. If those needs aren't met, ideas get killed or pivoted.
How to use The Launch Funnel
Startups are nothing but a series of validation experiments.
The funnel, in its current WIP status, is based on two principles:
- An idea progresses to the next stage after successfully validating the crucial assumptions associated with that stage.
- Validation is done by defining and running experiments.
- To know what to test: check out my post on Assumptions.
- To know how to test: check out my post on 52+ Validation Experiments. You can filter them by stage.
Here's a rough idea of what to define and validate in each stage: (open the toggles for details)
- Can I be the best at this? (skill)
- Do I want to be best at this? (passion)
- Is the socio-economic context right for this?
- Identify & validate Jobs to be Done + Personas.
- Is it a Painkiller or a Vitamin?
- Create & validate the Value Proposition + Business Model
- What are the Key Features & USPs that make it work?
- Validate the Targeting & Channels
- Validate Intention to Buy
- Define & validate the Business Case
- Create & validate Moats
- How big is the customer's pain of losing your product?
By applying this method, founders will be able to build with much more structure, and will have a much higher success rate.
This system is a work in progress, but its not hard to see the potential. Consider for instance the following:
- We can optimize funnel efficiency and conversion rates for optimal startup output
- We can adapt Alberto Savoia's Math of Success to quantify the probability of startup success.
- We can make challenges like 12 Startups in 12 months more impactful and effective .
- We can boost the number of Hero Alumni from accelerator programs s.a. LaunchMBA.
I will continue to work on detailing, testing and validating the concept of the Launch Funnel. In the meantime: Let me know what you think on Twitter, and feel free to Share.
👋 That's all, peeps!
See you next time.
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