As a startup, how should you operate and maintain the vitality of your product?

Today I was invited to Zhongguancun Entrepreneurship Building to learn communication with three bosses of start-up companies. After nearly six hours of communication, I walked out of the building and said to my friends who went with me, "Don't be too pessimistic and start your own business." Because I was also a two-year-old entrepreneur (and later acquired). Among the three companies I communicated with today, two are 2B and one is 2C. The overall team is relatively young and are just in the seed or VC stage. The accumulation of social resources and the ideas of overall project operation are almost unified and there are no alternative plans. And one thing they had in common was that at the beginning the founders talked incessantly, giving me almost no chance to interrupt, but as I asked more and more questions, their answers became less and less accurate and more and more evasive. Today, through this six-hour conversation, I will share with you how startup projects can survive carefully.

Have a heart for entrepreneurship, but also prepare the foundation for entrepreneurship

There is a view in the manufacturing industry that the development of manufacturing is measured by the production of high-quality physical products, while entrepreneurship adopts different development units, which we can call "proven cognition." All functions of a startup: vision and concept, product development, marketing and sales, scaling, partnerships and distribution, and design of structure and organization. All are measured and developed under conditions of uncertainty. The three companies I met today all had a tacit understanding and, in an extremely uncertain market environment, all used a company structure and business management methods that had a very strong theoretical basis, and even implanted the so-called corporate culture to manage start-up companies. As expected, the operating costs and project progress of the three companies were not satisfactory.

I tried to put forward my opinion: we can try not to organize the company into strictly defined functional departments (such as marketing, sales, information technology, human resources, etc.), or require team members to produce results in their respective areas of expertise. You may want to consider establishing a cross-departmental team, or changing the original linear working method to a small group circle working model, and establishing a "cognitive stage goal" at each stage and assuming corresponding responsibilities.

The reason I make this suggestion is that in my initial entrepreneurial team, my partners were accustomed to evaluating their work efficiency within their own scope. A good day for them means that they work well throughout the day. For example, for my technology, if I am not disturbed during working hours, it is a good day. Conversely, if he is interrupted by a question, process, or meeting, he will feel that he is in a bad state. And he will say to me: What did I accomplish today? I can feel that for him, code and product testing are real things: he can see them, evaluate them with KPIs, quantify them, and prove that he has done something today. On the contrary, the "cognitive stage goals" are almost invisible and intangible in the early stages.

However, for a startup project, this phased goal is particularly important. One of the bosses of the three companies is named Zhang. Today, Mr. Zhang described to me his work plan for the next six months, one of which is personnel planning and the other is financing plan. Everything was planned with a clear rationale, such as completing the establishment of the technical and product teams in August, entering the market in September, and conducting the second round of financing in October. Specific matters including team size, organizational structure, market agency plan, financing amount, and share dilution have all been included in the project plan, but when I asked what the team should do? How to do it? What is the purpose of entering the market and what is the feedback method? Including why when it came to the specific matters of financing in October, all of Mr. Zhang's feedback was powerful, but none of them was a verified fact. This will cause a startup project to waste a lot of opportunity costs and generate huge silent costs.

Therefore, in all start-up projects, whether you are a trader, a project leader or a project founder, please remember that each unit of project development requires "proven knowledge" to make judgments and actions for the next unit.

Don’t “follow your feelings” and don’t suffer from “analysis paralysis”

Two of the three founders I talked to today are really at two extremes in terms of characteristics. One is an executive who has worked as a COO in the social field for 10 years, and the other is a technician who previously worked as a big data analyst . This COO founder has a good habit of often conducting market research and talking to his users, but his partners say that these conversations are "just a formality" because the founder's rich experience means that they hardly analyze strategies or develop tactics. After several hasty communications with users and based on my past experience, I began to build a development team and conduct product research and development. Unfortunately, with so-called user communication, users don’t really know what they want? There is no determination as to whether the person we are talking to is a “user” or a “customer.” The result is that the current situation is that the product has been developed, but the number of users has not increased.

Another big data analyst founder went to the other extreme and adjusted his plan all the time. In this case, talking to users, buying research, and brainstorming strategy changes on a whiteboard as a team will not help. The problem with the plans of such entrepreneurs is not that they are not based on mature strategic principles, but that the initial assumptions are wrong, and a series of project plans are formulated and implemented based on these wrong assumptions. The saddest thing is that, due to the lack of replicable operating models and effective reference data in the early stages of the project, most founders will use the operating ideas of mature projects on start-up projects, and adjust the project and optimize the operating path based on very little data, or numbers, and unrepresentative user research reports. Most of these errors cannot be detected in theoretical analysis.

I explained several points to the three founders about this situation:

• How to conduct user needs analysis;
• Where do you find your customers?
• There is a product called: "The first imperfect product"

I have previously written an article specifically about user needs analysis: "How to effectively conduct user needs analysis, just grasp one word!" When I have time, I will talk about how to conduct market analysis, user classification and user portraits. Today, let me explain what is the "first imperfect product"

Let me give you an example: Although the first generation of iPhone lacked some basic features, such as copy and paste, 3G network speed and support for corporate email, early technology fans still flocked to it and lined up in front of Apple stores. Google 's original search engine could answer some specialized questions, such as what is Stanford University and the Linux operating system, but it was still several years away from "organizing the world's information." However, this did not prevent early users from raving about it.

There is a type of user called "early adopters" and some people also call them "early adopters", which all fall into the category of user classification. This type of user will use their imagination to fill in the shortcomings of the product. They prefer this situation because they care about being the first to use new products or technologies. In the consumer goods market, there's always a sense of self-worth in being the first on the block to show off the new basketball shoes, the new music player, or the coolest cell phone. In the enterprise product market, the willingness to take risks and adopt new products that competitors have not yet launched is to gain a competitive advantage. Early adopters are wary of things that are too sophisticated: if anyone can use this product, then what is the point of being an early adopter? Therefore, any additional features or modifications beyond the needs of early adopters are a waste of resources and time. As for the evaluation of such products, there are already many companies in the market doing it: Xiaomi, Hammer, Inman, etc. We can use the "smoke test" or the A\B\C - I\II\III cross testing method to test. I will not talk much about the methodology of operational testing here. The focus is to understand the value of "imperfect products" and their help to early entrepreneurial projects.

Of course, management must be fully prepared for such situations, because in traditional management, if a manager promises to do something but ultimately fails, he will be in big trouble. There are only two explanations for failure: poor execution or poor planning. Neither situation is excusable. The operators in the entrepreneurial team face different problems: because plans and forecasts are inherently full of uncertainty, when we inevitably fail and cannot deliver on our promises. How should the company's founders and investors negotiate and take the next step? This is a topic worth thinking about.

There are no failed products, only entrepreneurial teams that don’t review their products.

Finally, let me state a point: many products - even failed ones - will not fail. Most products will always have users, some growth, and some positive results. One of the biggest dangers for a startup is getting caught between a rock and a hard place. The team and senior management are always optimistic by nature. Even if they see that things are not going well, they still want to stick to their goals and not waver. The legend of perseverance is very dangerous. Various media today are always willing to report on entrepreneurial heroes who, even after going through untold hardships, turn the tide and achieve final victory when the prospects seem bleak. Unfortunately, what we don’t hear are the stories of the many more nameless people who held on until the company ultimately collapsed. For start-up companies, our smallest cost is the turning cost. Because of our small size and low decision-making costs, the nodes and methods for making changes are relatively easy.
Therefore, as a startup project, our business goal is to survive. Our two most important tasks are:

The company's current situation is measured through rigorous judgment and measurement based on recognizable phased goals, and the founders and founding team must face and evaluate the actual market feedback. Please don’t believe the early data. Data without behavioral drivers is just called numbers. What you should think about is the behavior of the people behind the data.

Design verifiable experiments based on the team's hypotheses to understand how to make real data closer to the ideal state in BP.

Because this article was written on the way back to the company, and many points cannot be elaborated in detail, the overall framework of ideas has been established. The following topics will be explained in detail in the future, such as the indicators for judging operational results, cognitive goals at each stage, and human resource development of start-up teams.