A 4-minute playbook to building a startup

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This article is part of Tech in Asia’s partnership with Monk’s Hill Ventures where we publish articles that feature the firm’s valuable insights. For more articles in this series, go here.

When I got to Singapore in 2011 and was starting Perx, the ecosystem looked a lot different than it is today. And as I mentored companies, built my own, or helped build others, I noticed that I was hearing the same issues and offering the same pieces of advice. So, I started to create a playbook to building a startup. I hope that my mistakes will help save you from making some of them yourselves and get you to your next milestone faster.

I’ve never been one for writing, so I’m going to try a different format for this post: lots of bullet points!

What is your purpose?

As a founder, there are two important things you need to do:

1. Be ready for the long journey.
2. Hire great people to delegate as quickly as possible.

You’ve heard this many times: startups are hard. There will be high-highs and low-lows. Having a purpose for yourself that you truly believe in will help you get through the many times you’ll want to give up.

But that’s not enough. I think a lot of new founders do not spend enough time clearly articulating to their team what the company’s purpose is. Once you have identified the purpose:

• Make sure everyone in the company knows what this is and that they all interpret it the same way.
• Make sure you only hire people who believe in and are legitimately excited about this purpose.
• Your progress will accelerate dramatically as soon as you start hiring people that can get the load off of your plate. If people are aligned with the goal, you can be confident that they can make good decisions on their own and will focus on the right things.

What is the problem you are solving?

Is the problem you are solving big enough? I’ve heard hundreds of company pitches, and probably 99 percent of the problems they’re trying to solve were either too small or not painful enough. What’s even worse is that their “solution” is the one looking for a problem.

When trying to identify a problem, my rule of thumb is to ask these questions:

• How painful is the problem?
• If you were to shut down, would your users constantly knock on your door until you reopen?
• How big is the market? (This doesn’t mean I want you to go and solve a problem for everyone immediately. More on that later, but what I’m saying is that you should see a path to a large scale).

Who are your customers?

• Figure out at least three or four personas of people who would benefit from your product.
• Test these personas through product features, user studies, research, or sales. At Perx, we tested new merchant personas almost every week to figure out who really needed our product.
• Eliminate personas as they fail your tests. This may mean that they won’t convert at a high-enough rate because they don’t find the problem that compelling. This may also mean poor retention rates or that these prospects are not yet ready. You don’t have time to waste on difficult personas; they can come later.
• Once you find your “easy-money” personas, it’s time to double down. Let the entire team focus on this customer. Plaster it everywhere in your office so everyone remembers. When everyone is aligned, you suddenly see that your product team knows what features to prioritize, your sales team knows who to sell to, and your management makes decisions much faster.
• Don’t worry about having a narrow focus. If you create a great product for this customer and scale, you’ll find that a good portion of what you built will apply to the next persona you want to target, and so on.

What are your success metrics?

How can you tell whether you’ve picked the right customer and are working toward product-market fit? Set the right metrics.