Startup at Silicon Valley bootcamp with Bret Waters, Stanford University lecturer on Innovation and Entrepreneurship. Bret gave some great insights into entrepreneurship.
1. The number one reason why startups often fail is when their long term value from customers is less than the cost of acquiring a customer.
2. Exclusivity works – not many companies (except few outliers like amazon) were successful with early product release for all.
3. Reaching the tipping point is critical – Finding the most influential customer category for your product is very crucial in a startup lifecycle. Quoting the example of 3M’s product PostIT, when the product was about to fail, the company decided to send a free sample to all the secretaries in corporate offices, who were the most influential customers, today PostIT is present in day to day life of the masses.
4. Build what your customers want – stating the example of Instagram where the company deleted all its other product features to keep only 2 features that the customers wanted, helped it become a unicorn.
5. For BtoB startups – cost reduction or increasing the sales are the only two most important reasons why customers buy product as their decision are more rational than individuals who may buy the product for variety of other reasons. B2B startups should approach the corporates not for sale call but to ask for help in building the product as corporate executives have the experience.
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