• Focusing on increasing traffic and improving conversion rates is important for startups, but retaining existing customers is also crucial for recurring service businesses.
• Adding new features to keep current customers happy can be more important than focusing only on sales and revenue growth.
• Losing customers through cancellations is like losing people through the bottom of your sales funnel. It undoes the work you did to acquire those customers.
• The key metrics for sales funnels are traffic (getting people into the top of the funnel) and conversion rate (moving people to the next step in the funnel). But for recurring services, customer retention is the third critical metric.
• If you have a SaaS business, you need to quickly address key customer feature requests in the first 1-2 months after launch. Otherwise, you risk losing many of your new customers through cancellations.
• Losing a single customer is like 100 people never coming to your website, if your conversion rate is 1%. So you must stop customer losses before improving conversion rates or driving more traffic.
• Realizing that customer cancellations represent the “third leg” of your sales funnel helps you understand that your business depends on driving traffic, converting prospects, and retaining customers. If any one area is “leaky,” you will lose customers.
• The solution is to first realize this dynamic is occurring, then stop customer losses before working on anything else. Adding key features to retain customers should be top priority.
•Successful founders move quickly to capitalize on opportunities but are able to adapt to changes. They don’t rigidly stick to plans and are willing to make pivots based on new information. This “flexibility” allows them to optimize their path to success.
• Strong communication skills. Success as an entrepreneur requires constantly communicating with customers, investors, employees, and partners. Founders who can convey ideas effectively in speech and writing tend to be more successful.
•Taking calculated risks. Successful founders are willing to take risks, but they evaluate the risks carefully and have contingency plans in place. They push boundaries but not recklessly.
•Learning from failures. Successful founders view failures and mistakes as learning opportunities. Rather than being discouraged by failures, they analyze what went wrong and use the lessons to improve. They have a growth mindset.
•Sacrificing work-life balance. Most successful founders go through periods of working extremely long hours to build their companies. While work-life balance is ideal, many founders have to sacrifice it at times to achieve key milestones. They are willing to do what is necessary to succeed.
•Persisting through challenges. Success is rarely overnight. Successful founders persevere through the inevitable challenges, rejections, and obstacles on the path to success. They are able to keep pushing forward in the face of adversity.
•Taking ownership and responsibility. Rather than blaming external factors, successful founders take ownership over their situations and responsibilities. They see themselves as driving their own destiny and success through the decisions they make. They don’t make excuses.
The key traits of successful founders could be summarized as the willingness to take risks, learn, adapt, work hard, persevere, communicate well, and take ownership over their endeavors. These “soft skills” are as critical as technical skills for entrepreneurs. Success comes from consistency and persistence, not rigidity. A growth mindset is essential.
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Start marketing as early as possible, even before launching your product. Talk to customers, show them wireframes and prototypes to get feedback. This removes guesswork and increases your chance of success.
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The Beatles played live for years before recording an album. Those early shows were critical for developing their skills and building an audience.
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Build a complementary startup team. Like Lennon and McCartney, founders provide vision and leadership. But attract others with different skills and talents to compensate for your weaknesses. A mix of abilities creates successful startups.
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Be flexible, opportunistic, and forward-thinking. The Beatles evolved rapidly, pushing creative boundaries. They anticipated technology changes and cultural shifts. Startups should do the same to stay ahead of competitors.
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Experiment and take risks. The Beatles were innovative in the studio, creating new sounds and techniques. Startups should test new ideas and “fail fast” to achieve breakthroughs. Some experiments won’t work, but you only need a few successes.
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Stay authentic and true to your vision. While flexible in some ways, The Beatles maintained their essence. Don’t chase fads or copy competitors. Startups should stay faithful to their mission and values.
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Build a devoted fan base. The Beatles had a very passionate, loyal fan base that amplified their success. Startups need enthusiastic customers and advocates to spread the word. Build a community around your brand.
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Continuously improve your product. The Beatles evolved with each new album. Startups must keep enhancing their product to exceed customer expectations, gain new users, and compete in the market. Stagnation leads to failure.
In summary, The Beatles provide many lessons for startups, from building a complementary team to marketing early, staying authentic yet flexible, experimenting, improving continuously, and cultivating devoted fans. Follow these principles to achieve startup success.
The Beatles were pioneers who were willing to experiment and seize new opportunities. They broke into film, pioneered new recording techniques, created concept albums, and evolved with changing tastes while retaining their unique style.
Like the Beatles, startups need:
•Flexibility and opportunism: Experiment, pursue new opportunities, and plan for the future. Don’t get trapped in a narrow definition of what you do.
•Willingness to adapt: Success comes from evolving to meet market demands. Don’t get stuck in “this is what we are.” Adapt as needed.
•Forward-thinking vision: Work with limited resources and look ahead to where your industry and customers are heading.
•Uniqueness: Retain the qualities that make you stand out while evolving. Don’t lose your identity and what makes you different.
In summary, be willing to experiment, adapt to change, plan for the future, and hold onto what makes you unique. Success comes through evolving. Don’t get trapped by rigid definitions or unwillingness to change.
To convince developers to work on your idea:
•Show a solid business plan, market research, specs, and designs. This demonstrates the idea is well-thought out and more likely to succeed.
•If developers continually say no, reevaluate what needs to change in your pitch or idea.
•Look for entrepreneurial developers, not at big companies or on Craigslist. Meet in person.
•Determine what kind of developer fits your company culture:
›Small startups attract “social” developers who like contributing a lot.
›Large, stable companies attract developers who value process and work-life balance.
›Tech companies attract developers passionate about cutting-edge products.
›Other companies attract developers who support businesses with software.
•Market to and keep developers who match your culture. Provide an environment where they’ll thrive.
To start a development consulting business:
•Get paying clients before worrying about business structure or accounting. Start with a business license.
•Choose a sole proprietorship, S-corp, or LLC. An LLC offers the most protection with less hassle than an S-corp.
•Use LegalZoom for paperwork. Get a “DBA” if operating under another name. Check the name isn’t taken.
•Hire an accountant for taxes and accounting so you can focus on developing.
•Build a website and network to find new clients. Offer a freebie to build your audience.
•Set rates based on your experience, skills, and local competitors. Adjust as you gain more experience.
Consider whether buying existing software or hiring developers to build it is right for your needs and abilities. Building requires significant time and money, and marketing skills are key - so if lacking, the risks are high. Buying or hiring others to build while you market is a good compromise.
Does this summary cover the main highlights and takeaways? Let me know if you have any other questions!
• Use contracts to outline details for every client project including scope, payments, intellectual property, etc. This protects you and clients.
• A fictitious name statement involves putting an ad in the paper announcing a business name. After a few weeks, you get a certificate showing you followed proper process, though it does not mean you trademarked the name. Use LegalZoom.
• A resale license allows buying items wholesale or avoiding upfront sales tax. Get from local government or LegalZoom.
• Advisors:
› CPA for $400-$1000/year to handle taxes
› Lawyer to help with legal issues, charges by hour or retainer
› Insurance agent to determine coverage, probably $500-$1000/month
• Use a spouse’s insurance if possible, otherwise expect to pay $500-$1000/month for individual coverage. E&O or umbrella insurance may be needed depending on business.
• Open a business checking account for deposits, checks, merchant accounts, and tax records.
• Get a business credit card to track expenses. Recommended: Advanta.
• Price based on market rate. Increase rates as you market yourself. Common mistake is charging too little.
• Save 10% of income for retirement. Recommended: Vanguard, SEP/SIMPLE IRAs.
• Use hosted source control like DreamHost or HostMySite instead of your own server. Cost is $30-$100/month.
• Recommended time tracking tools: SlimTimer, ClickTime. For bug tracking, Hosted FogBugz over free tools.
About Matheus Puppe