They say there are three things to building a startup successful: team, market, and product. I want to explore these three concepts from my experience and then get into some of the other things that are necessary that team, market, product help you attain.

Team 

The team, in my opinion, is of the utmost importance. It doesn’t stand alone, a great team with a poor product and market is going to fail. But I put a lot of weight on team. Team is what generates the market and identifies and exploits the market opportunity. Team is the brains, the processor that makes the whole thing work.

Team is also relatively static. The founders in a startup will spend years and years together building product and addressing market. Markets landscapes change, customers change, and therefore products change. But it’s one team that gains the wisdom of living through this change.

Another concept in the startup world, that I agree with, is that it’s never your first idea that succeeds, it’s always the eighth idea. What does that mean? You start a business with a great idea, but through experience and gained insight you iterate and discover more and the business you succeed with sometimes never looks like the business you started with. But, the team is often the same.

I frequently have said that “the team is the same.” I say this because the core team needs to be cohesive. Needs to work well together. Needs to mesh. The core team must execute flawlessly together to succeed. You must have complimentary skillsets so that there is enough talent in the pool to address all the aspects of running a business. If you are missing skills, acquire them or find another team member.

Market

If team is first, market is second. Finding a great market opportunity is a hard thing to do. I’d argue it’s the hardest thing to do. Searching for a market with a gap or a problem or a need can be tricky. Trying to establish a new market is difficult to do, though not impossible. If you can find that gap in the marketplace and have a market strategy to exploit it you’re way ahead of the game.

In searching for a market I suggest to sticking with what you know and have experience with. You’ve spent time in a career, in an industry, in a market learning the ins and outs and getting paid to get an education in that market. Leverage that knowledge in your own business venture. If you seek out a market you are unfamiliar with be sure to solicit as much advice and input as possible. You need to learn some things as well as learn what you don’t know.

A usually overlooked aspect of the new entrepreneur is a strategy to reach a market. A need is identified, but how do you bridge the gap between your product and the customer. A strategy to get your product to market is just as important as identifying the market itself.

Getting your market strategy in place is tough. First you need to take your market and break it down. Then break it down again and again. Keep narrowing your market down until you have a sliver of the market that you can talk to directly. You want to know so much about who your customer is that you could describe their gender, age, income level, and other personal characteristics.

You have limited resources and by focusing in a very narrow sliver of the market you will have a clear message and focused efforts. By addressing a market segment as a whole your message gets watered down. By speaking to everyone you are speaking to no one. Once you have captured that sliver of the market, start knocking down the next ones like domino’s.

A good market is hard to find, it’s the intersection of what you have personal experience with, where there is an unmet need, and a method of reaching that market.

Product

In this case, think of product as actual product or a service. Product is a critical part of a successful company. Managing a product and especially a product roadmap needs to take several aspects into consideration. When you offer something is just as important as what you offer.

First, the obvious points with the product is that it has to meet your audiences need. You’ve identified a market gap and your product, at a minimum, must fill it. If you can do that then you’re ahead of the game. But, there are other considerations to make as well: can we make the product more pleasurable to use, can we reduce our costs in producing the product, how will we support the product, what are our measures of success.

Having a product roadmap is a critical aspect to the product. Some customers will demand it. But, more than that, you need to make sure to balance your time, resources, money, and opportunity. Forgoing features to gain speed to market. Leaving money on the table to capture a customer base. Delaying release to include a critical feature. Taking time to develop specific barriers. Make sure your first version meets your markets need, then, balance everything else with speed to market, lost opportunity, and barriers to entry.

Priorities, that’s what we set when we’re in business. One priority that is tricky is optimization in search of a greater profit margin. Product optimization, workflow optimization, operational optimization, and any other ways of making business more streamlined is a good thing in general, but can be a bad thing at times.

In general, optimized business means greater operating profit. But, there are some times when you should consider putting your short term operating profit less than front and center.

• When you’re launching a product.When launching a product there are a lot of concerns. First, is even getting the thing off the ground. Then there are considerations of adoption rate, market success, customer feedback, supporting operations, and quality testing are also important. At this time if you are engineering down product and operational costs you could be sacrificing a few things of value: time and money. It takes time to optimize your offering, and in the mean time you’re not in business. It takes money to streamline your business, but you may never see adoption of your product and that investment was of naught. Or, maybe worse, a competitor makes it out before you.
• When you have a market but are entering new territory.If you have a product that is successful in a market and you are looking to expand, this could be another time to consider de-prioritizing profit. Business is fast and if you’re racing to grab market share you sometimes need to put product optimization behind you so you can control a market. This can mean entering contracts with less margin. It can also mean that those plans to engineer down costs are backburnered so you can capture a new customer base.
• When the cost/benefit doesn’t work out. Often times we see the carot. We see that we can increase our operating profit by a certain percent. Or we see that we can decrease our costs by so much per unit. We get tricked into investing time and money into chasing these margins. We don’t really do a cost/benefit analysis. Look at the man-hours and money it will take to reduce costs. Try to quanitfy for yourself the lost opportunity cost of time passed. Look at your increased margin per unit. Look at your sales projections. Look at the opportunity cost. Then, decide what the best course of action is.

So, with all that said. Optimizing your offerings and operations is a great thing. It can be easy money to capture. Just be cautious of the situation you are in before pursuing optimization.

It’s tempting for startups to look for increased margins, especially if they are thin to begin with. Sometimes you have to make the investment so your business can survive. Just remember, sometimes the search for optimization can kill you. I’ve seen it a lot.

You’ll read lists and lists and lists. You’ll read advice and more advice. I’m part of the information storm, and I want to talk about it. When you’re in a startup the context of your business changes all the time. It is so dynamic that “the most important thing” never stays that way for long.

If you’ve read a lot of books and articles on business and “how to win,” or “the top ten attributes of successful businesses,” or “how to execute” you’ll notice that you get somewhere between a couple morsels of applicable information and zero. Maybe you’ll pick up the latest buzz words.

So why do we read all these books and articles if what we get seems to be very little? Well, it’s to fill gaps, to build confidence, and to reflect. There is a lot of good information out there, it’s just sometimes the context of the writer doesn’t match the context of your business.

There is a lot of context missing from business advice. What is a priority for a company, group, or individual not only changes by individual but is also a function of change over time. Funding is most important, now it’s people, now it’s a sales strategy, now it’s protecting IP, now its [fill in the blank], etc., etc.

Take time to regularly evaluate where you stand. It’s easy to get caught up in the flow of things. Every week or two take some time to slow down, sit back, and think critically about where you’ve come from, where you’re at, and where you want to be. Give yourself some context, try to recollect all the advice you’ve gotten, and then modify your plans.

And, if you find yourself needing some advice, just remember to translate all that you hear and read into the context of your business.

There are precarious times when in business. I’d like to draw attention to the two most precarious times: high growth and slow decline.

The ideal state of a business is sustained growth, a nice gentle line that trends upwards.

A bad state, obviously, is a sharp downward slope. The only positive behind a sharp downward slope is that it’s obvious, you have to react to stop the bleeding or you have to cut your losses.

A not as obvious state of danger is a slow decline. Having a metric slowly go downhill is dangerous. The trend takes longer to see. People can still remain apathetic. It’s the kind of thing where people say “how did we get here?” If your performance metrics are trending down, even just by a small amount, be on your toes.

Probably the most dangerous times are high growth. If your metrics are off the chart it’s a time to celebrate… cautiously. Growth is good, sustained growth is what we want. If you have a peak, be critical. Is it a fluke? Is it sustainable? Be conservative, put money in the bank, don’t overspend. High growth leads to high emotion and that can lead to poor decisions. Get to a sustained growth and you’re golden.

It seems there are three motivations for information exchange in the niche of blogging media:

1. Entertainment
2. Planning
3. To Generate More Information

Blogs serve the purpose of entertaining, this includes all the jokes and humor, updates about the next gadget, horror stories about failed companies, gossip, or even just news about local events. This is information that we consume for our own sake. It doesn’t get past a few conversations or an internal emotional response.

Blogs serve the purpose of informing so that people can plan. This includes product releases, events and announcements, technology reviews, etc. Information that people use to get things done. About how to plan a vacation, a day, a career, an education, a business.

Blogs serve the purpose of generating moreblogs. Weird. Blogging serves bloggers, as well as other media outlets. Blogging is viral and information is consumed for the purpose of regurgitation, editorials, or adding facts. Posts beget posts. Information generates more information.