Do you have a promising business idea? You might want to hit pause before you start throwing out marketing plans and networking your way to seed funding. Not that you should sleep on your startup visions, of course. But you should take some time 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 fuel your momentum. In that spirit, here are some lessons from some of today’s standouts successful startups who took an idea from scratch to IPO.
1. Simplify a difficult process
Consumers crave simplicity. If a product or service is too complicated, they tend to think twice about using it. But say it’s a service that markets consider necessary, like buying or selling a house. The US real estate market may have been down recently, but 5 million trading continued last year.
Despite the necessity of buying and selling a home, most consumers would agree that it is a complicated ordeal. You have to find an agent, break your routine for showings or open houses, and—if you finally find the right solution—get through all the legalese. A lot about the process can slow things down. And when you need to buy or sell quickly, the traditional route can be very difficult.
Opendoor is an example of a startup based 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 make this multifaceted exchange. The idea of Opendoor struck home owners 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 suffering.
2. Connect the dots
Profitable startups sometimes start with the idea of bringing business and consumer groups under one roof. Take the restaurant industry for example. Some restaurants have the ability to offer delivery services, while others do not. At the same time, hungry customers don’t always want to dine or mop the sidewalk. And in households with diverse 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. That’s what Doordash has done by providing a service that both diners and diners find useful. By expanding its food delivery services, the company is creating a way for more restaurants and consumers to connect.
Restaurant owners win because they don’t lose sales or have to maintain overhead costs, including staff, associated with deliveries. Consumers are also rated for the ease 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. Reveal the Real Need
It’s hard to believe that streaming giant Netflix was once a startup. Known for disrupting the video rental industry, the company’s founders did so by carefully studying the market. Consumers were looking for home entertainment—the more demand, the better. The reason video rentals were popular was because they brought cinema into people’s homes. This was easier and cheaper than going to the theater, but consumers’ choices were limited to the movies that were on the shelves of video stores 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 the way 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 doorsteps was born and has continued to evolve with changes in technology.
By discovering the key 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 consumer actions leads to improvements they will want to embrace. Uniquely serving the identified need helps your company stand out and establish market leadership.
Learning from the lessons learned by others
Starting a startup comes with risks and rewards. You are pursuing an entrepreneurial path because you want a different kind of life. You see a way to do something better and you want to bring it to the world. You also want to experience the freedom of being in charge of your career.
Learning what created startups before yours thrived can help you determine if your business idea is viable. You may find ways to serve purchases with simplified solutions, bridge market gaps, and/or identify real consumer wants before they do. By applying these winning strategies to your stand-alone offering, your startup could be the next big success story.