Do you have a promising idea for a business? You might want to press pause before you start grinding away at marketing plans and networking your way to seed funding. Not that you should sleep on your visions for a startup, of course. But you should take a moment to study what has made other founders successful.
It’s understandable if taking a page from someone else’s book doesn’t hold much appeal. Most entrepreneurs get into the game because they have a desire to carve out their own niche, after all. However, you could pick up strategic insights to add fuel to your momentum. In that spirit, here are a few lessons from some of today’s exceptionally successful startups that took an idea from zero to IPO.
1. Simplify a Difficult Process
Consumers crave simplicity. If a product or service is too complex, they tend to think twice about using it. But say it’s a service that markets consider essential, such as buying or selling a home. The U.S. real estate market might have tapered off recently, but 5 million transactions still went through last year.
Despite the necessity of home buying and selling, most consumers would agree it’s a complicated ordeal. You’ve got to find an agent, disrupt your routine for showings or open houses and—should you eventually find a good fit—sift through all the legalese. A lot about the process can slow things down. And when you need to buy or sell fast, the traditional route can be too much to handle.
Opendoor is an example of a startup founded on the idea of simplifying an overly complex but necessary process. Its business model leverages technology to make it easier for buyers and sellers to carry out this multifaceted exchange. Opendoor’s idea caught on with homeowners who want to skip the hassles of showings and need to sell their properties quickly. The company’s services also streamline the process for those buying and selling at the same time. Goodbye, stress and inconvenience.
2. Connect the Dots
Profitable startups sometimes begin with the notion of bringing groups of businesses and consumers under one roof. Take the restaurant industry as an example. Some restaurants have the capacity to offer delivery services, while others don’t. Simultaneously, hungry customers don’t always want to dine in or pick up curbside. And in households with different palates, calling multiple restaurants to deliver a family feast can be a pain.
Sometimes, a brilliant business model starts by building bridges between unmet needs. This is something Doordash did by providing a service both restaurants and diners find useful. By expanding food delivery services, the company creates a way for more restaurants and consumers to connect.
Restaurant owners win because they don’t lose out on sales or have to maintain the overhead, including personnel, associated with deliveries. Consumers also score because of the convenience of ordering from multiple restaurants under a single platform. The key to success in this model is finding the overlap in market needs and offering convenient, centralized solutions to both sides of the transaction.
3. Uncover the Real Need
It’s hard to believe streaming giant Netflix was once a startup. Known for disrupting the video rental industry, the company’s founders did it by closely studying the market. Consumers were seeking home entertainment—the more on demand, the better. The reason video rentals were popular was because they brought the movie theater into people’s homes. This was easier and more economical than going to the theater, yet consumers’ choices were limited to the films video stores had on their shelves when they visited.
Netflix knew that access to seemingly endless video content was what mattered. Through extensive market research, the company was able to reshape how consumers fulfilled this need. The fact that they didn’t have to leave their homes to do it made it even better. Netflix’s model of delivering DVDs to people’s doors was born, and it continued to evolve with changes in technology.
By uncovering the core driver of your target market’s behaviors, you can find ways to introduce disruptive, high-growth solutions. Listening to what the market is saying and analyzing consumers’ actions leads to improvements they’ll want to embrace. Uniquely serving the identified need helps your company stand out and establish market leadership.
Learning From the Lessons Others Learned
Launching a startup comes with risks and rewards. You’re pursuing an entrepreneurial path because you want a different kind of life. You see a way to do something better and want to bring that to the world. You also want to experience the freedom of being in charge of your career.
Learning what’s made startups before yours thrive can help you determine whether your business idea is viable. You might find ways to serve markets with simplified solutions, bridge market gaps and/or identify consumers’ true wants before they do. By applying these winning strategies to your distinct offering, your startup could be the next big success story.
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