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This article was originally posted by Chris on Multiplicity.
INFINTI Lab is all wrapped up and it was a wonderful experience. I had the fortune to arrange some seasoned and serial entrepreneurs to come in and speak at the Lab. It’s funny how very similar advice was given by different speakers and mentors. My thought is if several successful people give similar advice, you should probably listen. Here’s the most important things I learned while running INFINITI Lab Toronto.
Culture is The Most Important Thing You Can Build
Two very successful entrepreneurs independently told similar stories of their startups falling on hard times and the thing that saved them was the culture that they built. In these two specific cases, culture can be further broken down into vision and honesty.
Vision: People worked at their startups not just for a paycheque, but because they believed in the vision of the company, they deeply cared about what they were building and wanted to see it survive. These founders had hired for fit, they had hired missionaries.
Honesty: These founders were honest and transparent with their employees. They had the painful talk with them about the hard times approaching, and gave their employees the option to jump ship, or to stay aboard and ride out the storm. In both cases everyone stayed and rode out the storm.
In God We Trust, All Others Must Bring Data
Data and validation is so important in so many ways. You need to prove you’re solving a real problem that your target customer actually cares about solving (hint: this means they give you money). You need to validate that your channels will produce effective traction for an efficient cost (Low cost of customer acquisition). Investors get excited when you can prove you have a product people want, and you have a cost effective distribution channel to get it to them. Then all you need is their money to ramp up and activate more distribution.
Startups Under Charge Customers
Due to industry wide inferiority complex startups are afraid to lose business by charging too much, this is not true.
It sounds counter-intuitive but, have the courage to double it, triple it, or add a zero to the price. If your price is too high, it’s easy to lower, but very hard to raise once set. Think of it, if you’re doing B2B sales and you think your price is $100 per month. Try pitching $1,000 per month. If the client pushes back, offer a 50% discount, you’re still up 5X from your original price. If the client doesn’t flinch at your price at all, it’s still too low, double it, triple it or add a zero.
Amazon started selling books, eBay started as a marketplace for Bennie Babies, and PayPal faciliated the financial side of those Bennie Baby sales. I know you have a big vision of your startup filled with world domination, but if you don’t make it through phase one, phase two or three don’t matter. Focus on a narrow, niche market as a beachhead, dominate it, then move to adjacent markets. Don’t try to boil the ocean just yet.
Chris Kay is a member of Founders Only and periodically writes here. He is co-Founder of Multiplicity Accelerator, which he co-founded with Rajah.