Why do Founders Often Struggle to Be Heard?https://nonerds.com/wp-content/uploads/2023/08/founders-2.jpg1024655James KnightJames Knighthttps://secure.gravatar.com/avatar/144d3d2f0a5be5f68582d5eab9fdd626?s=96&d=mm&r=g
The MICE quotient is an invaluable tool for understanding the story you’re telling.
It’s a concept that comes from fiction but applies equally well to sales and marketing.
By understanding the four MICE conflicts, founders can turn their vision into a captivating narrative.
Good stories are the same — in fiction, non-fiction, or copy. They all revolve around conflict.
The MICE quotient describes the four primary sources of conflict you can use:
1. 🗺️ Milieu 2. ❓ Inquiry 3. 🦋 Character 4. 🌋 Event.
Let’s explore each one:
🗺️ Milieu conflicts focus on the setting of the story.
A Milieu story begins when our character(s) enter a new place.
It ends when they exit.
In Milieu conflicts, the struggle to leave entertains and educates us.
For products, Milieu stories are about our customers returning to a place of comfort.
Something has changed, and they’ve entered a new, scary world.
Our product helps them return to the one they came from.
❓ Inquiry conflicts focus on a question.
An Inquiry story begins when our character(s) discover a question they don’t know the answer to.
It ends when they find that answer.
In marketing, Inquiry stories are best used to entice the customer into reading more.
We open the loop with a question they’re dying to know the answer to (“But how?!”).
We close the loop when we’re ready to move on to the next big question.
🦋 Character conflicts focus on character transformation.
They begin when our character becomes dissatisfied with their life or their circumstances.
They end when the character transforms into the person they want to be.
Character stories are best used as the over-arching narrative our customer moves through.
At the start, they’re not achieving their full potential.
They want more.
Our product or service helps them become that better person.
🌋 Event conflicts are all about changing the status quo.
Something big has happened. Our characters have to respond.
Event conflicts begin when the status quo is threatened.
They end when the character is returned to the status quo or to a better version of it.
Event conflicts are great for discussing your company’s role in the narrative.
They’re perfect for answering “why now?” What changed in your customer’s world to make your product relevant today?
In 2023, there are plenty of “events” to use in your stories.
The pandemic, the war in Ukraine, and the explosion of AI.
Each one of these threatens the status quo and provides new conflicts your customers have to navigate.
Understanding the MICE quotient can help you craft compelling stories & captivate your customers.
Use the 4 conflicts:
1. 🗺️ Milieu 2. ❓ Inquiry 3. 🦋 Character 4. 🌋 Event.
And watch your vision spread to customers, investors, and the world.
How to Build a Million-Dollar Startup: A Non-Technical Founders Guidehttps://nonerds.com/wp-content/uploads/2023/07/How-to-build-a-million-dollar-start-up_POST-1.jpg19201080James KnightJames Knighthttps://secure.gravatar.com/avatar/144d3d2f0a5be5f68582d5eab9fdd626?s=96&d=mm&r=g
I’m James Knight, Founder & Chief Nerd at No Nerds No Problem. I help founders iterate faster with a team of nearshore Nerds. I’ve spent the last ten years obsessing about how to help non-technical founders build and launch their startups and MVPs. I’m a Bona Fide Nerd myself with an undergraduate degree in Mathematics.
Since leaving Google in 2015 and starting my startup consulting agency, I’ve grown this company to 30+ nerds across six different countries, been featured in Bloomberg, and have helped more than 35 companieslaunch their MVPsand raise a combined $700M in fundraising using our Nerdstorm process. I’m here to help you do the same.
“Independent software {firms} such as Mr. Knights {No Nerds} represent an elite echelon of the so-called Gig Economy.” Bloomberg
In this article, I will show you how to lay the groundwork to build your million-dollar startup and how we did this for multiple clients. Be sure to read (or skip) to the end to see how we helped an early-stage startup with no money raise six figures in funding without writing a single line of code.
In the world of startups, we often hear the daunting statistic: a staggering 90% of startups ultimately fail. But let’s change our perspective for a moment. What if we turn our attention to the 10% that defy the odds, those that flourish and succeed? What can we learn from them? Let’s explore the key ingredients that set these triumphant startups apart.
1. The Market Fit Maestro: Catering to Customer Needs
Success begins with an unwavering focus on understanding customer needs and solving their problems like no one else can. These startups actively listen to feedback, readily adapt their offerings to meet market demands, and consistently strive to stay ahead of the curve.
2. The Visionary Vanguard: Cultivating a Cohesive Team
Behind every successful startup is a leader who inspires, motivates, and galvanizes the team. These visionaries foster a thriving culture, champion collaboration, and boldly embrace calculated risks to propel their startup toward its ultimate goals.
3. The Resilient Trailblazer: Rising Above Adversity
The startup journey is riddled with challenges – securing funding, outpacing competition, and attracting top talent. But the leaders of flourishing startups refuse to let setbacks define them. Instead, they learn, adapt, and pursue success, always staying the course.
How To Set Early-Stage Valuations
A startup founder must conduct a thorough valuation process to attract investors and make informed decisions. This process determines the required capital and quantifies the startup’s worth. Calculating startup valuation is crucial for fundraising, as it involves investors acquiring equity in the company.
Calculating Expected Value
Unlike established companies, early-stage startups move too quickly for traditional valuation models—like those based on Discounted Future Cashflows or EBITDA multiples. Instead, investors base valuations on what they expect the company’s future value to be based on its current state.
Expected Value (EV) calculations are an elementary financial concept, computed by breaking down an investment into its possible future outcomes, assigning each of those outcomes a probability, multiplying that probability times the value of that outcome, then adding those values up to reach the total expected value:
EV = Sum (Outcome Probability * Outcome Value)
Calculating these individual outcomes and probabilities is straightforward for assets with extensive market histories. But with startups, we only know the value of two outcomes:
(A) Possible Success: Total Addressable Market (TAM) – X% of $YB market
(B) Failure: $0
Many first-time founders make the mistake of basing their personal valuation expectations on Outcome A. While understanding a startup’s TAM (Total Addressable Market) is important, investors know that around 90% of startups fail.
And even amongst those that don’t, the vast majority of their portfolio companies will end up somewhere between Outcomes A and B. For an investor to accurately assess a company’s Expected Value, they need to understand these intermediate outcomes.
Estimating the Outcomes
Because they can’t possibly know the probability of every possible outcome between total market capture and failure, investors rely on their personal expectations of a company’s success. They base these expectations on three components:
Quantitative: Traction metrics, i.e., is the startup currently growing?
Temporal: Time, i.e., how fast is that growth happening?
Qualitative: Belief, i.e., Does the investor believe the company can continue to grow?
How To Calculate a Company’s Valuation
These three components can be used to calculate a company’s valuation:
Valuation = (Qualitative Factor * Quantitative Factor) / time
Where our Quantitative Factor(Fqt)is some form of traction metrics, t is the amount of time it took to achieve those metrics, and our Qualitative Factor (Fql) is an arbitrary value chosen by the investor based on their belief in the company, market, and founding team.
Let’s look at it another way:
V = Metrics * Multiple
Where Multiple is a combination of the Qualitative Factor (Fql) and Time (t).
Revenue v. Pre-revenue Valuations
The metrics used in the above calculation depend primarily on whether or not the startup currently generates revenue. Those that are, use their annual revenue (AR), while those that don’t use Monthly Active Users (MAUs).
Revenue Valuations
Revenue-generating startups are valued based on their speed in achieving current annual revenue. The valuation multiple, typically ranging from 5-15x, is determined by investors, but industry trends indicate specific benchmarks.
Startups reaching revenue within 12-18 months can expect an average multiple of 10x, while faster achievers may see multiples of 15x or higher, mainly if the revenue is recurring.
Pre-revenue Valuations
Pre-revenue startup valuation depends on the investor’s estimation of Customer Lifetime Value (LTV), which considers metrics like Customer Acquisition Costs (CACs), Session Length, Churn Rate, and demographics.
These metrics significantly impact LTV, leading to a wide range of multiples for pre-revenue startups. Typically, MAU multiples range from $75-150 per user, with an industry average of $100.
Assuming we can earn the average industry multiple for our startup’s valuation (i.e., we can reach our growth targets within our first 12-18 months). What metrics justify a $1M valuation?
How To Calculate Metrics Correctly
Accurate metric calculation is crucial for startups, providing a clear view of performance, growth, and overall business health. It enables informed decision-making, identifies strengths and weaknesses, and supports funding and partnerships.
If you calculate metrics right, you can open your business to valuable insights, increased success chances, and confident navigation of the competitive landscape. Let’s get this right.
Use our Free Metric Model
To help you get started, we built a simple model of the below calculations here. Feel free to make a copy of the spreadsheet and change the variables at the top to see how they affect your target valuation.
Revenue-based Metrics
For revenue-generating startups with a 10X multiple, we need to show $100K in annualized revenue. Broken down monthly, that’s just over $8.3K per month.
Depending on your ticket price (value per sale) that means we need to reach the following sales numbers to justify a $1M valuation:
834 monthly customers at $10 each.
OR 84 monthly customers at $100 each.
OR 9 monthly customers at $1K each.
Non-revenue Metrics
The calculation for pre-revenue startups with an expected LTV of $100 is more straightforward: we need to show 10,000 Monthly Active Users (MAUs) to hit a valuation of $1M.
V = 10,000 MAUs * $100 LTV Multiple = $1,000,000
How To Reach Million-Dollar Metrics
If you want to build, launch, and grow your company to $1M and beyond, a “great idea” isn’t enough. It takes a capable founding team months to turn their vision into an actual product, take it to customers, and reach the traction goals necessary to earn those valuations.
Reaching those goals in 6 months? That takes a rockstar founder or founding team leading a killer execution team. Do you have what it takes to hit those metrics in that timeframe? Our clients have done that and then some.
Here are two examples (names removed at client request):
Example 1
Social networking startup – 10K users in ~1 month
Example 2
D2C startup – $35K in sales in first 90 days ($11.6K monthly):
Both of these companies were worth $1M+ within three months of launching their product. OK, so what type of team got them there? How do I create such a team? Read on.
We know what metrics we must show to reach a million-dollar valuation. We’ve seen that other companies have done it. OK, but what does it take for a startup to do the same?
Y Combinator, the most successful Startup Accelerator of all time, often says that startups should spend their time “writing code and talking to customers.”
Put another way; startups have two jobs: Building and Selling. That means that every successful startup has two distinct sides:
(1) The Business
Comprised of business-minded visionaries who identify opportunities, conceptualize products, and successfully sell them to customers.
(2) The Nerds
Designers & developers who are capable of taking the Business’s vision and implementing it.
What if you had a founder who could assemble, vet, and manage a team of world-classnerds without giving away 50% of equity, wasting hundreds of thousands of dollars on expensive freelancers, or wasting six months of your time sourcing work from India?
But what kind of person does it take to lead a Million Dollar Business? A million-dollar founder.
How To Think Like a Million-Dollar Founder
Even with a team of (Math) Olympian-tier Nerds and a perfect team executing flawlessly, a startup is only as valuable as its vision. And its vision is only as valuable as its founding team.
So what kind of non-technical founder can hit a $ 1M valuation in six months?
Here’s how you do it:
You have to have an idea for an ambitious startup. Small ideas don’t get big valuations.
You have to be willing to invest time and money into making that idea a reality. We can show you how to be efficient with those costs, but development isn’t free.
You must be willing to put in the work: even with others executing your vision, reaching Million Dollar Metrics is a full-time job.
You must be willing to take your product to market every few weeks, even if it’s not “finished” or “perfect.”
You have to be open to criticism and be able to take harsh feedback from your team and customers.
You have to be willing to sell, sell, sell.
What type of founders can’t hit these metrics?
Founders who aren’t willing to get their hands dirty. Startups are hard work.
Founders who aren’t willing to take risks. You win and lose at the table you play at.
Founders who only hire technical talent based on how cheap they are. You won’t even reach LAUNCH in 6 months with budget providers.
Why do founders fail?
Non-technical founders don’t fail because their ideas aren’t ambitious enough, because they don’t know how to run a business, talk to customers, or sell their products.
They fail because they over-invest in bringing their MVPs to market, work with partners that can’t deliver that MVP effectively and efficiently, and reach launch with no traction, money to improve their product, and no way to raise more funds.
How To Prevent Your Startup From Failing
How do we keep our clients away from the 90% fail club? We use a one-week roadmapping workshop called theNerdstorm. We’ve tailored and fine-tuned this process to turn ideas into something tangible. More than just a toy—something real that you can take to customers and sell and fundraise with.
Your new product shouldn’t take six months and $100K+ to bring to market. This is why we developed the Nerdstorm as a 5-day product, design, and development sprint built to get The Next Big Thing™ out of your head and into the hands of your customers.
James Knight, No Nerds CEO – Nerdstorm Session
We have used this approach repeatedly to take concepts to clickable prototypes in a week. Instead of having calls about calls, you should be raising capital, closing your first customers, and testing new business outcomes.
If you already have the capabilities to do this, great, as I have yet to see a faster, more affordable approach to kickstarting development and getting customer feedback in days, not months. If not, check out these success stories and see if we can help.
While I self-promoted in this article, that is not my overall goal. I am passionate about helping early-stage startups reach their potential and avoid the dreaded 90% club. I don’t just ask my team of Nerds to build a product and disappear; quite the opposite. Our work is usually just getting started post-launch.
The world of startups is teeming with ambitious dreamers and relentless doers who dare to shake things up. Success, however, is reserved for those who can adapt to a perpetually changing landscape while remaining steadfast in their core values and vision.
Unleash your potential by learning from the elite 10% who demonstrate that, with determination, adaptability, and passion, nothing is impossible. Let’s ignite a new revolution that propels even more startups into the exclusive 10% club.
What do you think it takes for startups to beat the odds and thrive? Did I miss anything? Share your insights and experiences in the comments below.
How to Launch a Million-Dollar MVP in 5 Days with Zero Development Costshttps://nonerds.com/wp-content/uploads/2023/07/nonerds_orange_character_in_spacesuit_watching_a_neon_bright_sp_4ca3cc8b-fb4e-4a74-bcc5-96346263c837.png1456816James KnightJames Knighthttps://secure.gravatar.com/avatar/144d3d2f0a5be5f68582d5eab9fdd626?s=96&d=mm&r=g
Over the years, I’ve worked with countless early-stage startups and non-technical founders and noticed a single factor that often determines their success or failure:
How well they define and prioritize their MVP (Minimum Viable Product).
A well-planned MVP focuses on core features that solve a specific user problem and allows startups to test assumptions, learn, and iterate. But, trying to create a fully-featured product right from the start can lead to wasted resources and a delayed launch.
Over-engineering, disregarding feedback, insufficient market research, subpar user experience, and ambiguous success metrics are common prevalent missteps I have seen by startups and founders when crafting an MVP.
If nothing else, take this information and run with it. I promise you, if done right, it will work. If you don’t believe me, just skip to the end for the proof.
The Minimum-Viable Product or MVP is the minimum level of work product we can test in the marketplace. Building and launching an MVP is one of the first activities anew startup completes.
As founders, we often hear about the importance of building an MVP. It’s the first version of your product that you can release with just enough features to captivate early adopters.
On its way to the marketplace, an MVP goes through three distinct stages:
(1) The idea
Everything from the initial idea until implementation begins. This includes market research, customer discovery, and solution exploration.
(2) Building the meat of the process
Here, technical partners take the concepts outlined during Idea and design, develop, test, and prepare them for launch.
(3) Launch
Once implementation is complete, the product is prepared for release and brought to the marketplace.
A Common Mistake Among Founders
First-time founders often see the initial launch as the final step, confident in their vision’s strength and viewing implementation as the only obstacle. They expect their MVP to be a runaway success, leaving no room for doubt in their growth expectations.
Confidence is crucial for founders, but startup reality can contradict bravado. CBInsights reports a 70% failure rate for startups that launched and secured initial funding within 20 months. This indicates that over 2 out of 3 funded MVPs couldn’t sustain viable companies, excluding those that didn’t even reach that stage.
In reality, early-stage startups typically experience slow initial growth before trending sharply upward after months (or even years). This model is often referred to as “Hockey Stick Growth.”
The Holy Hockey Stick & Product-Market Fit
In the Hockey Stick model, a startup sees little to no traction in its early months or years before hitting its “inflection point” and trending upwards into an exponential growth curve.
In this model, a startup’s inflection point is reached once it finds “Product-Market Fit” (PMF), i.e., in a good market with a product that can satisfy said market. Finding Product-Market Fit is the primary goal of an early-stage startup.
In truth, the only thing that matters at this stage is getting to product/market fit.
Hockey Stick Growth Stages
Founders often overestimate their ability to find Product-Market Fit pre-launch, assuming everything will work out by just bringing their MVP to market. However, the top reason for failure among funded companies is “No Market Need” for their product.
This overconfidence leads first-time founders to over-invest in their launch, obsessing over a “perfect” product only to find the market’s interest isn’t as expected. They invest months preparing the idea, researching the market, engaging potential customers, and collaborating with technical partners on development, testing, and revisions.
This preparation includes building sales and marketing assets, organizing press releases and events, and ensuring scalability. Then, on the big day, they hit the red button, eagerly awaiting a valuation climb to $1M and beyond.
The big day
Post-Launch Reality
The expected growth never comes. Months or years of MVP work yield little to no market response. A flaw in the original vision or a mismatch between perceived market needs and customer requirements could be the cause. Or, the implementation team might not have delivered the product as initially envisioned.
Or worse. Their vision may be spot on, but the market moved out from under them. In the time they took to make their MVP perfect, the world moved on without them. A competitor beat them to the punch, government regulations were passed into law, or the App Store’s rules changed overnight.
Or an unprecedented global pandemic eliminated their industry overnight. Imagine spending a year building an Airbnb competitor to have COVID reduce travel worldwide by ~50%.
Startups can take months or years to find “Product-Market Fit,” posing a challenge for non-technical founders. Even the ultra-wealthy find it difficult to cover team expenses for an extended period.
Many founders mistakenly believe they’ll be exceptions to startup failures, but high-profile founders with significant funding have made similar mistakes. Let’s take a look at a recent example.
A Billion Dollar Failure
In August 2018, Jeffrey Katzenberg pitched his idea for “NewTV,” a mobile-first TV programming startup, raising $1 billion in financing and appointing Meg Whitman as CEO.
In 2019, Quibi invested over $500 million in producing 75+ programs and 8500+ short episodes before its April 2020 launch. The launch gained 300k users on day one and over 1.7 million in the first week, with 3.5 million downloads and 1.3 million active users by the end of the month.
This success wasn’t enough. Two months post-launch, executives took pay cuts while the company secured an additional $750M in funding. Adjusting first-year subscription projections from 7.4 million to 2 million, Quibi changed paid and free offerings globally to offset losses.
Jeffrey Katzenberg, at Sundance 2020. Source – Daniel Boczarski / Getty Images
This success wasn’t enough. Two months post-launch, executives took pay cuts while the company secured an additional $750M in funding. Adjusting first-year subscription projections from 7.4 million to 2 million, Quibi changed paid and free offerings globally to offset losses.
By September of that year, Quibi had just $200M left of almost $2B in capital it had raised and earned. The company looked for ways to keep the lights on, looking to either raise another round or even go public.
But it was too late: on October 21, 2020, just six months after its launch, Quibi announced that it was shutting down.
Why couldn’t Quibi raise more money?
Quibi’s had impressive launch figures, with 1.3 million monthly active users in one month, surpassing even the popular Clubhouse, which took a year to reach 2 million users. Projected revenues of $250-300M in the first year, a quarter of the way to $1B, were a remarkable achievement, a dream for most founders.
If we plug those figures into our model from before, the picture is less rosy. Raising $1B in seed money put Quibi’s valuation between $5-10B. Using our MAU, their valuation after launch was ~$130M. After showing revenues, even at a 15X multiple, Quibi’s AR valued them at $4.5B.
After two years of operation, Quibi had lost between $500M and $5B in valuation.
So what did Quibi do wrong?
It wasn’t the leadership team: Jeffrey Katzenberg is an entertainment mogul responsible for producing The Lion King, Beauty and the Beast, and Aladdin—Meg Whitman is a startup titan; in her ten years at eBay, she took the company from $4M to $8B in annual revenue.
It wasn’t the content: its shows received ten Emmy nominations, winning two. The tech was ready for Netflix-level traffic upon launch, and timing cannot be solely blamed, as mobile app viewership increased by 65% during pandemic-related lockdowns.
The easy answer is that Quibi failed because it didn’t reach Product-Market Fit. But why didn’t it reach Product-Market Fit?
In 1962, Everett Rogers published Diffusion of Innovations, describing how new ideas spread across cultures and populations. In that book, he identified five categories of people that each approach new ideas in different ways:
1 – Innovators
Those who love trying new things may even be the people encouraging others to explore a new idea.
2 – Early Adopters
Those comfortable taking risks but want to form a solid opinion of the new idea before they vocally support it.
3 – Early Majority
Those interested in new ideas but want proof of their effectiveness.
4 – Late Majority
Those who dislike taking risks tend to question the need for changes.
5 – Laggards
Those who prefer the status quo because they know what to expect.
Why are these categories important?
These different approaches to new ideas affect how people view new products and the kinds of products each is interested in. A product that’s interesting to an Innovator is viewed as too risky by the Early Majority. And the Innovators and Early Adopters will completely ignore a safe offering that might be interesting to the Late Majority.
New products don’t have access to the entire curve at once. They can’t because the different parts of the curve aren’t interested in the same kinds of products. This is why Clubhouse attracts tech hipsters discussing AI, while Facebook is where Aunt Tina shares chemtrail videos.
Quibi failed by targeting the mass market but introducing a new product category that was not appealing to the Early and Late Majority.
Launching early and targeting Innovators and Early Adopters captures the most receptive part of the curve. You’ll gain immediate traction from an interested customer base, and as you improve the product, you access larger parts of the curve, accelerating growth towards Hockey Stick Growth.
The Product Development Cycle
Finding true Product-Market Fit is an ongoing process from launch, involving iterations and improvements. There’s no mythical Growth phase; instead, we move from Launch to Learning, assessing progress, readjusting strategies, and repeating the cycle.
Despite knowing the “Lean Startup” concept, many founders fail to practice it. Non-technical founders often plan long roadmaps and MVPs with extensive features, seeking low-rate partners to build everything at once instead of prioritizing launch.
This approach can be disastrous as development costs rise and bug rates increase with larger scopes, potentially turning a “6-month” project into over a year.
2020 taught us how much can change in a year.
Imagine spending two years perfecting a travel app, only to face COVID’s impactright before launch, or working 18 months on a location-sharing startup, only to have Apple restrict access. These are real examples.
Non-technical founders need efficient cycles for success. Efficiency means more than cost-cutting; it’s about delivering value. Prioritizing customers’ needs provides new value with each cycle, getting closer to Product-Market Fit and increasing long-term survival chances.
Finding the True Hockey Stick
If Product-Market fit isn’t binary, what does true Hockey Stick Growth look like?
The final stage of the Hockey Stick model is characterized by “rapid” or “surging” growth. After our inflection point, our curve begins to bend sharply upward.
For a curve to get steeper over time, it has to be “accelerating.” In math terms, its second derivative must be positive or increasing. That means that our growth, or the “velocity” at which our metrics change, is itself changing.
In startups, our growth rate naturally increases as we achieve Product-Market Fit. With each successive improvement to our product and to how we sell that product, our curve gets steeper.
Over time that curve looks like this:
Product-Market Fit Curve
In reality, the inflection “point” of the Hockey Stick model is more of an inflection “process.” With each successive launch, we improve our Product-Market Fit, increasing our growth rate and opening up larger and larger portions of the market as we go.
Use Our Free Metric Model
We’ve built a simple model of the above curves here. Feel free to make a copy of the spreadsheet and change the variables to see how they affect your growth curve over time.
Why You Should Launch Early and Often
Prioritizing launch over “perfection” means reaching our first customers in weeks, not months. That means less upfront investment, less exposure to risk, and less time waiting to show traction.
That’s time and money we can use to iterate through our inflection point, finding early Product-Market Fit and kickstarting our Hockey Stick growth. Many successful startups have followed this process of launching early and iterating over time.
Let’s look at three examples:
Airbnb
Airbnb launched as Airbed and Breakfast: its first listing was founder Brian Chesky’s living room. After focusing exclusively on SF, they expanded to select markets, catering to Early Adopters for their first several years before expanding into the mid-market.
Uber
Uber, initially UberCab, began with founders personally coordinating rides through livery companies in the bay area, targeting tech Early Adopters. I used Uber in 2012 to reach YCombinator’s Startup School and couldn’t wait to share it with friends. My mom didn’t try Uber until around 2016.
Facebook
Facebook initially targeted Harvard students, then expanded to other Ivy League institutions and universities nationwide before opening to the general public. College students are a perfect example of early adopters, and Facebook’s limited access fueled discussions about the product.
Clubhouse
Another example of rapid growth is Clubhouse. Formed as Alpha Exploration Co. in February 2020, they launched their app within two months in April without any marketing or press. The app’s success was expedited using licensed technology, featuring a simple interface and limited features, allowing users to join available rooms or create their own.
After launching as invite-only, the platform gained traction within the tech community (Early Adopters), securing a $12M investment from Andreesen Horowitz. As interest grew, Early Movers from the general business world joined in, with Elon Musk’s appearance in January 2021 sealing the deal.
That same month, Clubhouse closed a second round of $100M, valuing the company at $1B. On its first anniversary, it announced it had reached 10M Monthly Active Users, publicly validating that valuation with its growth metrics.
Clubhouse’s MVP wasn’t “perfect”
Rather than spending months improving design or adding features like chat, scheduling, or clubs, they focused on the single feature they believed would bring success.
Clubhouse built their MVP efficiently, targeting customers who would overlook rough edges or prefer them. Leveraging customers’ psychology and desire to feel “in the known,” they spread the app through them.
A Playbook for any Non-Technical Founder
On paper, it’s simple enough: define your MVP, have your technical partners build it, then take it to customers for real-world feedback.
In practice, many non-technical founders get stuck on the second step. They struggle to find, vet, and manage their technical teams.
They hire providers that overpromise and underdeliver, turning what was supposed to be a two-week process into two months or more.
Let’s show you how to fix that.
How To Prevent Your MVP From Failing
How do we make sure our clients build the right MVP? We use a one-week roadmapping workshop called the Nerdstorm. We’ve tailored and fine-tuned this process to turn ideas into something tangible. More than just a toy—something real that you can take to customers and sell and fundraise with.
Your new product shouldn’t take six months and $100K+ to bring to market. This is why we developed the Nerdstorm as a 5-day product, design, and development sprint built to get The Next Big Thing™ out of your head and into the hands of your customers.
James Knight, No Nerds CEO – Nerdstorm Session
We have used this approach repeatedly to take concepts to clickable prototypes in a week. Instead of having calls about calls, you should be raising capital, closing your first customers, and testing new business outcomes.
If you already have the capabilities to do this, great, as I have yet to see a faster, more affordable approach to kickstarting development and getting customer feedback in days, not months. If not, check out these success stories and see if we can help.
I’ve seen a pattern with early-stage startups: those who figure out how to maximize their resources and stay focused on their primary goals have a higher likelihood of success than those who try to do it all. This is especially true when building an MVP.
Be strategic about your priorities, and don’t be afraid to say no to something that doesn’t align with your vision. Consistent focus and the ability to adapt are two keys to launching incredible products in today’s fast-paced and competitive market.
Stay focused, stay agile, and you’ll be on your way to building a product people will love.Don’t waste precious time and money on ‘perfection.’ Aspiring founders, keep this in your mind: you don’t have to get it perfect.
You just have to get it going!
Put the MINIMUM back in MVP. Get your offer out the door, try to sell it, and get feedback. Iterate and improve. That’s the secret sauce.
Recession, Who Cares? – Why Founders Should Embrace the Recession, Not Run From Ithttps://nonerds.com/wp-content/uploads/2023/07/bear.webp1024667James KnightJames Knighthttps://secure.gravatar.com/avatar/144d3d2f0a5be5f68582d5eab9fdd626?s=96&d=mm&r=g
Recession. A big scary word.
When the economy shrinks, there’s less for everyone. Less money in the money stream. Fewer jobs on the job tree.
Hockey Stick Growth is a Myth—What Companies Can Do to Create True Exponential Growthhttps://nonerds.com/wp-content/uploads/2023/07/unicorn.webp1024690James KnightJames Knighthttps://secure.gravatar.com/avatar/144d3d2f0a5be5f68582d5eab9fdd626?s=96&d=mm&r=g
Hockey Stick Growth is a myth.
There’s no magical point at which a startup takes off. True growth is built brick-by-brick.
Let’s see what real exponential growth is made of.
The “Holy Hockey Stick”
In the Hockey Stick Growth model, startups see little traction in their early days before hitting a mystical “inflection point” and trending upwards into exponential growth.
That mystical point is defined as the point when you achieve Product-Market Fit (PMF).
But that’s not how growth works.
Product-Market Fit is a Process
In the real world, PMF isn’t a point in time. It’s a process.
A process that most founders underestimate.
Even amongst *funded* startups, the #1 reason for failure is “No Market Need [1]”. These are companies that had 12–18 months to find PMF.
And they never found it.
A founder’s overconfidence in their ability to reach PMF will doom them.
It leads to over-investment (both in time and money) in their initial version of the product.
It creates an obsession with each successive release, as the founder is sure *this one* will be the one to achieve PMF.
So what can you do about it?
The True Hockey Stick
Since Product-Market Fit isn’t binary, what does the true Hockey Stick look like?
In the hockey-stick model, the period after the inflection point is characterized by “surging” growth.
That’s a fancy way to say growth is “accelerating”.
So how do we increase our growth rate over time?
The real Hockey Stick isn’t defined by an inflection point but rather by an inflectionprocess.
With each change we make to our product or its messaging, we increase our growth rate just a little. These improvements stack on top of each other one by one, building the famous hockey stick shape.
Creating real exponential growth isn’t about finding the mythical Product-Market fit. It’s not about reaching some magical inflection point.
Real exponential growth is achieved by stacking incremental improvements over time.
