The process of building a start-up – how to avoid the most common mistakes that will waste your time, ruin your nerves and damage your finances

Are you sure you can afford to educate the market?

When creating a start-up, it is crucial to understand what needs our product or service meets. Many novice entrepreneurs make the mistake of trying to create completely new solutions that require large-scale market education. This approach often involves huge investments that start-ups are usually unable to afford. You need to thoroughly understand the consequences of each path.

Start-ups, especially at the beginning of their activity, usually do not have large amounts of capital, so their product or service should accurately respond to specific market needs. Instead of creating something completely new, which would require convincing potential customers to use solutions they are unfamiliar with, it is worth focusing on an innovative approach to problems that already exist and that your potential customers recognise.

Uber was able to create a new market, but only because it had enormous funding. For smaller start-ups that do not have such resources, the key is to understand what their potential customers need here and now, and then show them that they have an effective solution.

Remember that there is a big difference between offering a better version of something customers already know (e.g., a more attractive deposit for a new target group) and trying to introduce a completely new way of doing things that requires them to learn and change their habits (e.g., a new investment model they are unfamiliar with). The latter approach is much more difficult and time-consuming.

With that in mind, below are the key steps to creating an MVP (Minimum Viable Product) that will help you verify the value of your product or service. You can, of course, create a fantastic Uber-scale solution, but if you don’t get a fund that will throw in huge amounts of money, you will probably bleed dry before you reach profitability and the market even registers that such a project ever existed.

I can do better!

When starting a new project or start-up, it can be tempting to look at the competition and think, “I can do better.” While this thought is good motivation, the key is to understand that creating a product that is only “a little better” than the competition is probably not enough to gain significant market share.

Despite the numerous flaws and shortcomings that can be seen in competitors’ products, it is important to understand that fixing these things is only one part of the equation. If your competitors have the financial and technical resources to quickly copy your innovations and improvements, it is worth asking yourself: “Am I able to compete in this field? Are my innovations difficult enough to copy? What if my competitors introduce these features in a month because they can afford to?”

This brings us to the concept of “unfair advantage,” which is a key element in Eric Ries’ model for start-up development. An unfair advantage is something your company has that your competitors cannot easily copy. It could be unique technology, an exceptional team, specialist knowledge, strong relationships with key partners, access to resources, or other factors that are unique to your company.

If you don’t see a clear “unfair advantage” for your start-up, then the start-up idea itself may be too weak. That’s why it’s worth taking the time to analyse your strengths, resources and opportunities, rather than just focusing on what you can do “a little better”. Think about what you can offer that others cannot easily simulate or copy.

Your “unfair advantage” may be the key to creating a product that is not only better than the competition, but also resistant to attempts to copy it. Remember that the goal is not just to be “a little better” – the goal is to be unique and one of a kind in the market.

The trap of perfectionism: The consequences of developing a product for a year without consultation

Imagine you are working on a new product or service. The vision is clear and the idea seems perfect. You spend a year developing the product, refining it and adding more and more features. You don’t consult anyone about your idea, you don’t test it, you don’t adapt it to the needs of users. Finally, after a year of hard work, you launch the product on the market. Are you sure it will be a success?

Approaching start-up creation in this way has many potential consequences:

1. Lack of validation: Without consulting potential users or customers, you risk your product not meeting the actual needs of the market. It is possible that your vision of the product is wrong, or that the features you think are crucial are not as important to your target customer.
2. Wasted time and resources: By spending a year developing a product without testing its market appeal, you run the risk of finding out that your efforts were in vain. Even if the product is technically perfect, there may be no market for it.
3. Lack of adaptability: If you do not collect feedback and consult with users during the development process, you lose the ability to adapt and adjust your development direction. In the extremely dynamic start-up business, this ability to respond quickly to changing circumstances is crucial.
4. Risk of being overtaken by the competition: In the fast-paced world of technology, a year is a very long time. During this time, your competitors may introduce new products or features that meet customer needs before you have a chance to launch your product.
5. Lack of user engagement: By releasing a product after a year of work without interacting with users, you lose the opportunity to build an engaged community around your product. Users who are engaged and have influence on product development from the beginning are more likely to become loyal customers.

Therefore, instead of spending a year creating the “perfect” product behind closed doors, focus on the Pareto principle, i.e. 80/20. Your mantra in a start-up is “how to solve 80% of problems with a maximum of 20% of functionality”. Your solution does not have to be a perfect work of art, it just has to be good enough for users to want to use it and contribute to its development. This approach should not be confused with the “I’ll make something mediocre and invest in it once it starts making money” approach. I often encounter this approach when our clients are guided by price because they think they will do something very budget-friendly, and when they make money, they will do something great. This is a mistake in assumptions, and this approach often dooms a project to failure, not because the idea was bad.

The role of minimalism in product creation: avoiding colossal mistakes

Working on a complex IT project for a year or more not only carries the risk of not matching the market, but also poses a great challenge on many other levels. Not only do market needs change, but technology, resources and even the team can change over such a long period of time. What seemed simple at first may turn out to be much more complicated than originally assumed.

Another aspect is the endless loop of improvement. If you fall into the trap of “one more feature” that keeps pushing back the product release date, you not only prolong the development process, but also increase the risk of frustration for investors or the team. All of this leads to increased costs and reduced chances of success.

In contrast to this is the concept of MVP (Minimal Viable Product) – a minimal, working product that allows for quick verification of an idea on the market. Instead of creating a complex product with the assumption that only a comprehensive solution will attract users, we focus on a basic version that solves a key problem.

Creating an MVP has many advantages, and I will describe what has already been written from a slightly different perspective, but it is so important that it is worth emphasising:

1. Validation: An MVP allows you to quickly check whether the product idea makes sense and is attractive to users. It gives you the opportunity to check which features are most important to users.
2. Speed of response: If it turns out that the product does not meet expectations, you are not too far into the development process to change direction. This allows you to minimise losses and focus on other opportunities.
3. User engagement: Users who are involved from the very beginning can feel that they have an impact on the development of the product. This further deepens their engagement and builds loyalty.
4. Risk reduction: By releasing an MVP, you minimise the risk associated with creating a complex product. This is particularly important in the IT sector, where technological development is extremely dynamic.

Creating a huge colossus is no guarantee of success. It is more important to focus on basic functionality that will bring value to users and is good enough to attract their attention. Remember: if you think that without a certain feature the product will have no value, you have probably made a mistake in your assumptions. Try to focus on the basic solution to the problem and build your value proposition around it.

Build interest from day one

Talk about your idea from the very beginning. Have conversations that will help you determine exactly what you should build. Don’t be afraid to talk about your new application or service. Remember that no one will steal your idea – implementation is the key. Your unique way of understanding and implementing your idea sets it apart from others. A good example is what one investor told me. Sometimes, under the influence of market changes, they receive very similar projects and solutions to the same problems from various start-ups. Each of them expects to sign an NDA, which makes potential investors smile because they understand that they are dealing with people who do not understand the process. Remember – an idea cannot be patented, only its solution. People overestimate the importance of their unique ideas while underestimating the importance of the implementation and execution stage, and it is this stage that is crucial.

Waiting list and presenting the idea

Creating a waiting list is a fantastic way to gather potential customers. All you need is a simple landing page with a short description of the project and a waiting list sign-up form. Check the interest in your idea before you start implementing it. To do this, you need to start promoting yourself. Use your social media accounts, groups that may be interested in your project, and other online platforms to promote your waiting list. Instead of linking directly to your website, post a graphic and ask people to write to you directly. This will allow you to stay in touch with them and validate your ideas.

Rethink your idea and re-analyse your business model

You are facing a so-called pivot, which every start-up faces sooner or later, so it is very important to keep going back to the beginning and think about whether our idea is really as good as we thought and whether we are moving towards the right solution to the target group’s problem.