When talking about early stage ventures the most important thing that matters is growth and growth requires customer traction. That was the major statement we talked about last lecture accompanied by Xiaochen, one of the co-founder of Guide to Iceland.
Guide to Iceland, a startup launched a year ago in August ’14, operates as the largest collaboration in the Icelandic travel industry. Based in Reykjavik, this startup is probably one of the best examples regarding the topic growth. It turned their business into profit after only four months, remember we are talking about Iceland, a population about 330.000 people and around 1.1 million visitors annually.
Xiaochen mentioned many things we have learned from Bala the last weeks already: “…look for a niche market…think about creating value, not about money…do not wait until everything is perfect…ask for the motivation when you hire people etc.”. Nevertheless, what have I took from her speech? It was interesting to see how she talked about the development and I felt already like an ‘advanced entrepreneur’ who knows some principles which matter for startups.
By far the most important and exciting part was the way Guide to Iceland is growing. They do it organically! They listen to their customers and they take their advices to improve their product. Good questions from the audience, which underline that statement like: “Are you planning to implement a booking platform for restaurants like you have for several tours?” Simple answer: “Yes, if the customer inquire that…” This is what customer traction in conjunction with growth means.
During the second half of the lecture, we talked about the book “Traction: How Any Startup Can Achieve Rapid Customer Growth”. The authors identify 19 different traction channels a startup can access to achieve customer traction. Have a look here for the review; it is already in my reading list.
So what is this curve about? According to the quote, many startups end up at the “Uh-Oh!” point, even if they have a product and customers . Why does that happen? Better, how can I avoid this?
I would like to bring up the Guide to Iceland as an example. I don’t know if they got stuck at that point “Uh-Oh!” but a good solution they found to avoid that was translating their page into several languages – that’s smart! Think about it. Your business operates in the travel industry; your customers are coming from all over the world; what would happen if your website would be only Icelandic? You would not have the product market fit. So make your business accessible for more customers by giving them the choice of choosing from different languages. Conclusion: chance of more growth.
Another statement Bala mentioned:
That means the more your weekly growth rate is the merrier you grow yearly! When tracking the rate week-by-week, you will recognize immediately if you are stuck at the “Uh-Oh!” – Point or if you hit the rate, you know you are climbing the right path towards the summit.
The time is running and our startup-project is in process, the pitch is going to be in a little bit more than a month. Next week I’ll give you further updates about the status and come up with some more details.
Guide to Iceland, a startup launched a year ago in August ’14, operates as the largest collaboration in the Icelandic travel industry. Based in Reykjavik, this startup is probably one of the best examples regarding the topic growth. It turned their business into profit after only four months, remember we are talking about Iceland, a population about 330.000 people and around 1.1 million visitors annually.
Xiaochen mentioned many things we have learned from Bala the last weeks already: “…look for a niche market…think about creating value, not about money…do not wait until everything is perfect…ask for the motivation when you hire people etc.”. Nevertheless, what have I took from her speech? It was interesting to see how she talked about the development and I felt already like an ‘advanced entrepreneur’ who knows some principles which matter for startups.
By far the most important and exciting part was the way Guide to Iceland is growing. They do it organically! They listen to their customers and they take their advices to improve their product. Good questions from the audience, which underline that statement like: “Are you planning to implement a booking platform for restaurants like you have for several tours?” Simple answer: “Yes, if the customer inquire that…” This is what customer traction in conjunction with growth means.
During the second half of the lecture, we talked about the book “Traction: How Any Startup Can Achieve Rapid Customer Growth”. The authors identify 19 different traction channels a startup can access to achieve customer traction. Have a look here for the review; it is already in my reading list.
So what is this curve about? According to the quote, many startups end up at the “Uh-Oh!” point, even if they have a product and customers . Why does that happen? Better, how can I avoid this?
I would like to bring up the Guide to Iceland as an example. I don’t know if they got stuck at that point “Uh-Oh!” but a good solution they found to avoid that was translating their page into several languages – that’s smart! Think about it. Your business operates in the travel industry; your customers are coming from all over the world; what would happen if your website would be only Icelandic? You would not have the product market fit. So make your business accessible for more customers by giving them the choice of choosing from different languages. Conclusion: chance of more growth.
Another statement Bala mentioned:
“Are you growing 5% to 7% a week?”Simple question and it’s all about the mathematics. Example:
“A company making $1000 a month (a typical number early in YC) and growing at 1% a week will 4 years later be making $7900 a month, which is less than a good programmer makes in salary in Silicon Valley. A startup that grows at 5% a week will in 4 years be making $25 million a month.”Paul Graham
That means the more your weekly growth rate is the merrier you grow yearly! When tracking the rate week-by-week, you will recognize immediately if you are stuck at the “Uh-Oh!” – Point or if you hit the rate, you know you are climbing the right path towards the summit.
The time is running and our startup-project is in process, the pitch is going to be in a little bit more than a month. Next week I’ll give you further updates about the status and come up with some more details.