Dan Martell - July 24, 2017


5 Things All Great Startups Have


Episode Stats

Length

6 minutes

Words per Minute

195.57481

Word Count

1,264

Sentence Count

60


Summary

Summaries generated with gmurro/bart-large-finetuned-filtered-spotify-podcast-summ .

Transcript

Transcript generated with Whisper (turbo).
00:00:00.000 Startup domination, world domination.
00:00:12.420 Five keys to startup success.
00:00:15.040 Maybe you're frustrated with the progress you're making
00:00:17.320 or you feel like you should be two or three years ahead
00:00:20.080 because you have a friend that started at the same time
00:00:22.060 as you and you're like, why am I not making more progress
00:00:25.220 in your business?
00:00:26.060 Here's the thing is there's literally five keys
00:00:28.720 to a great product, a great startup,
00:00:30.800 a great technology platform that's required
00:00:33.700 so that you even have the right foundation
00:00:35.900 to grow and scale your business.
00:00:37.580 Now, I've been watching and studying
00:00:38.760 some of the smartest people in the world,
00:00:40.920 even though I feel blessed and lucky
00:00:42.440 to have started and scaled and exited.
00:00:45.160 My last two companies were venture-backed.
00:00:46.780 My third one was a consulting company
00:00:48.460 and literally invested, had the privilege
00:00:51.520 to invest in 30-plus other companies
00:00:53.260 like Intercom and Udemy and Getaround and Unbounce
00:00:56.820 and watch them grow their businesses.
00:01:00.340 There's really, you know, studying the Elon Musk
00:01:03.060 and the Reid Hoffmans from LinkedIn
00:01:04.320 and the Peter Thiel's, you know, PayPal and Facebook fame.
00:01:08.060 I just feel like there's literally a pattern.
00:01:10.880 And if you understand these five keys,
00:01:12.880 then it'll at least allow you to make better decisions
00:01:14.760 in your business.
00:01:15.400 So the first one is product founder fit.
00:01:18.960 Okay, a lot of people talk about product market fit.
00:01:21.320 I actually think you gotta go to the next level.
00:01:23.280 When I was starting my company Clarity.fm,
00:01:25.540 It was an expert network for entrepreneurs
00:01:27.300 that get advice over the phone.
00:01:29.000 Everybody kept saying to me,
00:01:30.380 Dan, I've never seen an idea and a product
00:01:33.580 that had better product founder fit
00:01:35.740 because I was so passionate.
00:01:38.520 Like literally, I mean, it's the reason why I do these videos.
00:01:40.360 I just love teaching.
00:01:41.580 I love connecting people.
00:01:42.780 I organize founder dinners.
00:01:44.540 I host events.
00:01:46.040 I mean, this is just part of my DNA
00:01:48.040 and to create a platform to allow people to do that,
00:01:50.780 I think it's a big part
00:01:51.820 and that's where I see a lot of people get into businesses
00:01:54.320 because of opportunities, financial opportunities.
00:01:57.360 And I just don't think that's the way to do it.
00:01:59.180 The biggest key, number one, is product founder fit.
00:02:02.560 Number two is the market need.
00:02:05.120 There's a pain, okay?
00:02:06.840 If you feel like you're trying to peddle something
00:02:08.640 that people kind of want but they don't really want,
00:02:10.460 like there's no immediate pull from the market,
00:02:13.280 it's probably because you built a nice-to-have,
00:02:14.900 not a must-have.
00:02:15.820 And I think that understanding the pain,
00:02:18.340 sometimes it's really just a positioning challenge.
00:02:21.000 Like the market's there, they have the problem,
00:02:23.480 Your solution solves the problem but you actually haven't
00:02:26.280 positioned it right for them to understand that.
00:02:28.780 I think that's a huge opportunity.
00:02:30.520 But literally the market, step one,
00:02:32.980 is that they need to have the pain.
00:02:34.760 So first is product founder fit.
00:02:36.360 Two is market need.
00:02:38.100 Three is a great product hook.
00:02:40.960 You know, every company out there from, you know,
00:02:43.860 PayPal to Facebook, they all had a very direct
00:02:47.640 and simple premise, you know?
00:02:49.340 You have a problem, they solved it and they got the user
00:02:52.040 to take an action that was logical, that was easy,
00:02:55.540 that got a feedback loop going, right?
00:02:57.780 From posting a tweet to sharing a project on Basecamp
00:03:02.520 to commenting in Slack to you name the product,
00:03:05.080 sharing a file in Dropbox, you know,
00:03:07.480 searching and saving to a list on Airbnb.
00:03:11.300 People don't understand that every product has a hook,
00:03:14.220 has something that you can get people to resonate with,
00:03:17.660 take action on, and gets them some kind of benefit,
00:03:20.400 some kind of dopamine hit.
00:03:22.020 So that's the third area that I want you to think of
00:03:23.600 in your product.
00:03:24.140 What is that hook that'll get somebody in,
00:03:26.460 get them to experience kind of the value
00:03:28.100 that I'm suggesting for them to go further
00:03:30.280 so then you can expand what's called
00:03:31.620 the surface area of the product.
00:03:34.540 And number four is they figured out
00:03:36.340 a scalable distribution process.
00:03:39.620 I mean, the challenge is that, you know,
00:03:41.700 at the end of the day,
00:03:42.420 you need to be able to grow faster.
00:03:44.300 Some kind of virality.
00:03:45.260 Things like, you know, embedding an image
00:03:48.100 or embedding, well, so Instagram was really distribution
00:03:51.800 through social networks, but you have YouTube
00:03:54.320 that was famous on using MySpace for their distribution.
00:03:59.160 So there's a lot of different ways to do it.
00:04:00.720 With Clarity, it was really about using the expert profile.
00:04:03.540 We called it EDS, expert-driven signups.
00:04:06.260 Engaging the expert to promote their profile
00:04:08.360 to drive more demand, which then introduced them
00:04:10.320 to their platform, which then kind of created
00:04:12.340 this snowball effect.
00:04:13.300 So really understanding what is your scalable
00:04:16.080 distribution model, that is the key, you know?
00:04:18.940 And I wanna leave you guys with a really important concept.
00:04:21.820 It was almost number five, but is more of a thought,
00:04:25.820 an idea, and that is to create a moat, right?
00:04:29.560 And that's the tip, is that there's something
00:04:31.960 about your business that has to be hard to copy.
00:04:35.200 If it's just as easy for anybody to just create
00:04:37.760 a features checklist of your product and copy it.
00:04:40.800 I mean, I've seen so many people, they're like,
00:04:42.800 can somebody on Upwork, right?
00:04:45.080 and people, I would get notifications
00:04:46.580 because I subscribed for the notice,
00:04:48.880 but people would literally write,
00:04:50.220 can somebody build me a copy of Clarity?
00:04:52.620 Can somebody build us a copy of Flowtown?
00:04:55.120 If it was as easy as any developer
00:04:57.360 just building those features, I mean, people forget this.
00:04:59.400 Do you remember Pounce?
00:05:00.800 Do you remember, literally, when Twitter came out,
00:05:03.100 there was so many different products
00:05:04.840 that looked exactly like Twitter
00:05:06.240 for different use cases, different verticals,
00:05:08.580 but there was only one that won
00:05:09.980 because they built the network, they built the moat,
00:05:12.180 they built that virality into it,
00:05:14.840 and they were first, and I think, you know,
00:05:16.640 even today, even as much as PayPal is a shitty product,
00:05:19.880 I mean, let's be honest, it's a bad product.
00:05:22.420 It's still used, it's still defensible.
00:05:24.320 There's very few people that have been able
00:05:26.020 to penetrate that moat, and I think that that is
00:05:28.220 something worth thinking about as a thought experiment
00:05:30.780 within your business, on your team,
00:05:32.200 when you're thinking about product direction.
00:05:34.060 How do you create a moat in your business?
00:05:35.600 So real quick, product founder fit is number one.
00:05:38.960 Number two is market need.
00:05:41.440 Is there a pain to solve, or is it a nice to have?
00:05:44.440 Three is a product hook.
00:05:46.040 Is there one thing you can ask your users to do
00:05:48.180 that gets them engaged in the product,
00:05:49.520 gets them some value to feel it?
00:05:51.480 Four is a scalable distribution model,
00:05:54.160 understanding how your product gets penetrated
00:05:56.920 into the market and distributed amongst different users.
00:06:00.060 And then as a thought experiment for you to really
00:06:02.520 take things to the next level is how do you create a moat
00:06:04.620 so that it's hard to copy?
00:06:07.060 As per usual, I want to challenge you
00:06:08.860 to live a bigger life and a bigger business
00:06:10.540 and I'll see you next Monday.
00:06:12.060 If you like this video, be sure to subscribe to my channel
00:06:14.240 to get other tips and strategies
00:06:15.640 on how to start and grow your business.
00:06:16.840 I'd also encourage you to join my newsletter
00:06:19.040 where I share exclusive invites to events,
00:06:21.620 free entrepreneurial training and other community contests.
00:06:23.780 If you're ready to get going, I got two more videos
00:06:25.420 queued up for you.
00:06:26.620 Have a great day.