Why is the 1990s Startup Astonishing Exponential Growth Formula still valid?

“Startup” is a term which was originally coined for the early tech revolution in the 1970s.

It is referring to a new breed of small companies with astonishing exponential growth potential. However “startup” became a popular term in the 1990s and early 2000s business boom with the brands like Google, Microsoft and Apple scaling up at a faster pace than ever seen before.

The first startup definitions germinate from Venture Capitalists. It is the indicator to identify the companies with the best potential for the investors. However nowadays the search for the ultimate definition of “a good startup” is joined by accelerators, corporations and academia – all with their particular viewpoints.

The ground rule to be successful in your startup, you should be passionate about what you have planned to succeed. Ideas about the startup may not be innovative or unique but the way you are planning, that should be innovative. A ‘solid idea’ or unique business model may lose its charm if you are not approaching it with complete gusto. Initial foundation should be concreat, to have ‘astonishing exponential growth’ and to achieve it few measures should be strongly followed:

1. Identify the ‘beachhead market’ and TAM:

To start any entrepreneurship journey or startup, first identify your ‘Beachhead Market’. The word beachhead market and its history is surprisingly interesting. It comes from an army war related  strategy.

If a country is planning to attack another country, at first they will enter and station their soldiers on the beaches and make posts on beaches (just a few months ago we got the news from various news channels, that China is Planning to Occupy Taiwan, and few Chinese soldiers are seen at the sea border line have planted their tent). These are known as ‘Beachhead’. Strategically they have crossed the boundary but crossing the sea is not an easy task, and if the army enters through the boundary of the sea line route they are already in position to attack their enemy. This is called the ‘Beachhead Market’, here all the market being a startup you are going to target is like a large sea, if you jump into the middle, there is high probability of drowning.

Therefore, to make a target and shoot you need to understand the beachhead market in your business first. You may not like this idea, because technically it is identifying a single market ‘which increases the focus on value creation, in ‘consumers life’, and it minimises the loss if your startup shatters.

This technique will identically help and understand or identify the TAM (Total Addressable Market), which is really important for a startup plan and your investors. If you have an amphibious idea about your TAM and you pitch it to the investor, immediately your investor will understand that you know nothing about TAM, and market segmentation and beachhead market. Which could be calculated by the actual end user of the product or service in the beachhead market who is paying you, i.e., how much money a user spends in a year to consume a similar product like an existing business of yours. Another way to determine TAM is ‘Bottom-up Research' and 'Top-down Analysis’, either sit one on one and discuss face to face or do survey research. 

2. Draw a Perfect Consumer Persona  and  an End User:

From the 90’s era we have witnessed some incredibly beautiful ad campaigns. Few examples are: Cadbury, Titan Raga, Pepsi, Thumbs Up, Google, and the list is a little long.

The psychology behind this ad is defining a ‘Perfect Consumer Persona’ and ‘End User Profiling’. Persona is entering into the depth of personality of any person and going deep into their mind, and understanding their need, identifying the emotion and relating it to the solution or product which solved the ultimate need. ‘What my customer wants from me, through my service or product’, and as much as this identification process is cristal clear the startup will automatically achieve its success through its ‘End User’- the user who is paying the fee to consume.

3. Role of MVBP (Minimum Viable Business Product)  and Final Product:

Being a startup founder before designing a final product you should keep in mind that it should be viable and the consumer should pay for it in advance or in part as per the basis of service. Check whether your brand is getting free publicity by words of mouth or not? A Product becomes famous by free publicity and whether you should stop or try a new product or not you will get the idea. ‘Ultimately your consumer is expanding the business’. Now, before designing a final product for your ‘extreme user’ you have ample feedback and data to be measured to finalise your final product. Every feedback should be use effectively, listen to your consumer and improve continuously like most of the tech giant do, (Apple, Facebook, WhatsApp and Google, etc.,)

4. Design Thinking For Life Cycle Of Consumer:

A startup founder needs to understand a consumer life cycle or roadmap, which starts from awareness of the product, consumption phase and long term association with the product, which should be started from primary research itself. This is a process, which includes reach, acquisition, conversion, retention and loyalty. This is important for any kind of business because this will help you to understand your consumer journey and to make the other strategies in your business like; product go to strategy, initial pricing, your position in the market, in comparison with other existing business, what should be your unique selling proposition, and product growth. This transition could easily be done, when you would be knowing your consumer better. Your target market should be defined in depth, because your consumer is using the product is not enough to make your business sustainable in the long run. 

5. If your core product leads to a Successful Business:

What is your business core, that only you do and no one else can replicate it easily? Being a startup founder your core business should be clear and can not be changed often, which is a good opportunity to attract good investors. Ideally a startup founder in the initial days should put all the efforts, resources and creativity to build his business core, and it should be built in such a way that no change of market dynamic and competitors affects it. Core is: what your startup solves better than your competitor does, which gives you a competitive advantage. Few situations that we recently witnessed are ‘coronavirus’ and ‘Russia Ukraine War’ which affects the market dynamic. Few points could be taken care of while building the core:

a. Strategic partnership or network (ex: uber and ola), b. Business strategy (ex: microsoft, google, apple), c. Patent (if you built a unique design patenting on it), d. Technology (whatsapp messaging app), e. Business values (ex: ikea), f. Customer service (ex: dominos), g. Data (example: Reliance JIO), h. Customer experience (ex: maruti), i. Marketing (ex: xiaomi).

Generally, the fundamentals of an organisation or a core of a startup can not be changed completely, but the business model can be evolved.

Few examples can be considered: Apple OS (Operating System) can not replicate easily.

Coca Cola, secret formula, elements and mixture which is not replicable.

Reliance JIO huge network base.

WhatsApp till date is the best messaging App.

The non core area of an organisation should not be confused with not so important areas such as human resource and accounting. These two areas are considered as critical areas of their own, and must be cognizant of it.

6. Defining competitive position:

Competitive advantage or position  can be created beautifully when you put ample effort to make your consumer persona and identify their top two priorities, above all the priorities. This can help you to understand your competitive position. Carefully watch how the top two priorities of your consumer that you have identified, it serves them better than your competitors, if you solve it and being a startup founder you are experiencing growth in your business, then you have understood your competitive position. This may give you a first mover advantage and your competitor will be afraid to compete with you. When you build a product or service based on your core and explain it to your consumer and help them understand how you add value into their life by solving their priorities then you can enjoy the first mover advantage too. Always keep in mind you may be the owner of your company but your consumer is the boss.

7. Supportive assumption for your business:

Now, above all a successful business runs on assumption and not by instinct. Often we observe that now and then someone is doing business, or has started a startup, but the point of assumption? On what basis he/she started it? You are going to do business in the future, according to that, what is your assumption, and supporting proof? 

Everything in the above point is based on research i.e., assumption and data which is supporting proof. A right assumption can lead you to the right way. When you present your business idea to some people and they are ready to pay in advance, it is the best way to move forward with your idea, if they are ready to pay in part it is good, but if they just want to try it and can become a very bad idea to proceed with your business idea, and from here your assumption starts. How big your startup becomes, or if it is small, a good assumption is required for every step that you have decided to take, because it reduces the uncertainty.

Etymologically, it is important to validate your  assumption because it maps your vision, business strategy, performance of your business, growth and profit, and it ensures the success of your business. 

In conclusion, a startup could be successful by using a mindful observation technique. Whether it be in the initial days or in the running phase. Few technical factors also could be taken care of to be raised as a successful startup such as:

a. High level of product service,

b. Affordable price range without compromising the margin and profit.

c. Triggered emotion marketing strategy.

d. COGS behind the GOGS (Cost of Goods Sold behind the Cost of preparing the goods).

e. Solution close approach.

Lastly, being a brand we need to listen carefully to our consumers! what they are saying, understand their pain area.

A very important point can be noted, you should not push your consumer to buy your product instead you can pull the consumer by your service, and whenever you asked for the feedback and asking them to share their experience never push them, if they happy they will not mind for a extra long conversation but all you need to understand is valuing the value of your custom, otherwise you never know what may leave your consumer irritated and gives the reason to switch.

A meaningful conversation will help to identify an invisible problem, which may give ‘you’ an idea to grow your business.