Should an entrepreneur be building or selling a product or service first?
Should an entrepreneur be building or selling a product or service first?
Hey it’s the Startup Coach here and recently I was working with a bootstrapping startup who is struggling between building a product to demo in order to get your first sale or making your first sale then building the product. While I always coach startups, to get clients first before building anything, sometimes there is an MVP (Minimum Viable Product) that can or should be done before the sale. However, this MVP is usually not an app but what is minimally required to test your hypothesis (hypothesis is usually ‘will people will buy my product or service’). This could be phone calls, an ad on Craig’s list or local paper, going somewhere where your target market is going to be (tradeshow, meetup etc.) and talking, or doing a survey, and getting potential customers to yes. Signing a letter of intent or a purchase order.
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The question that every startup needs to ask is not can this product, service, or company be built but should it be built
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As The Startup Coach & Toronto’s entrepreneur mentor I know every situation is different, when deciding which to do first, building or selling a product or service when mentoring startups, I always coach.
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If you can’t sell it why would you build it?
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I can think of a number of exceptions to this rule, but they are exceptions. Generally, there are two types of founders the makers and the sellers. The makers are the product people, they do the code, product or service the startup provides. The sellers gather people around them to build the product, or service and have a gift for vision and persuasion. While some builders can iterate rapidly and build MVPs quickly to demo and get to sale;
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If you are a seller founder who is bootstrapping you need to sell before you build there should be no exceptions!
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When you are deciding between building or selling a product or service don’t fall into the trap that many entrepreneurs before you have. Building something no one wants or is willing to pay for. How do you avoid this trap? You engage potential customers early. Discover their pain. Find out what it is they are willing to pay for. Get them to review your draft screen shots and functionality. Engage them and get them to commit to purchasing your product before you build it. This is easier then you think and most entrepreneurs fail because they avoid doing it.
If you are struggling between building or selling a product or service you should stop. Find an idea validation or ideation workshop near you and take it immediately. Learn lean startup techniques for idea validation and how to get out of the building and talk to customers. Idea Validation is one of the series of TorontoStarts workshops hosted by The Startup Coach, you can see all of our upcoming events and workshops on our Eventbrite page.
Idea validation is at the heart of everything we do during the Startup Launch accelerator program where the Startup Coach helps take entrepreneurs and ideas and turn them into sustainable and scalable businesses.
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Craig
The Startup Coach
Founder of TorontoStarts Toronto’s Startup Community
