How to Plan for Success

The Blueprint (figure this out before your company is formed):

• Entry point: a product that solves customers’ pain and that they will pay for.
  
  
  • Must have a total addressable market (TAM) of at least $5 billion.
    
    
  • TAM is measured correctly; not over-exaggerated.
    
    
  • Addresses customers’ known needs and pains, not their wants or what you think their pains are.
    
    
  • There aren’t several similar companies that have already failed.
    
    
  • Will reach $100 million revenue within 5 to 7 years, and is priced high enough that you don’t need a massive customer base to achieve that.
    
    
  • Build in pivot points if no one’s buying the entry point.
    
    
  • Something that competitors can’t copy too quickly.
    
    
  • Industry trends are with you.
    
    
  • Insertion point: product must be easy and desirable to use.
    
    
• Bigger vision: what the company will be and produce beyond the entry point.
  
  
• Plan of execution: milestones and the time it will take to hit them.

The Technology Adoption Life Cycle and Product-Market Fit

• Early adopters: people you know or your VC knows, usually 10 to 15 percent of your initial market.
  
  
  • They will give you feedback that helps you polish your product for the next set of customers.
    
    
• Early majority: companies that don’t usually buy from startups but your entry point is so enticing that they buy it.
  
  
  • Product-market fit: Mohit’s definition is an average sales person can sell your product to an average company without having to get headquarters involved. This means your company can scale.
    
    
  • Don’t go for the early majority if your product isn’t ready; these customers won’t accept an unstable product the way early adopters will.
    
    
  • How to find early majority customers: look for companies that have bought similar products and/or bought from other startups.
    
    
  • Only go for the customers that you know need what you are selling.

Checklist your Way to Good Non-Technical Hires

As a technical founder, Mohit thought non-technical and technical hires were the same. They are not. Now, he has a three-phase checklist that potential hires must meet to be considered.

• Phase 1: Pre-interview
  
  
  • Look for a good job history, relevant experience, and results in previous companies.
    
    
• Phase 2: The interview
  
  
  • Look for a good culture/chemistry match — but don’t hire solely based on chemistry.
    
    
  • Look for red flags
    
    
• Phase 3: Post-interview
  
  
  • Check the references the candidate gives you. These will usually validate the positives you saw in the candidate but they won’t tell you the negatives.
    
    
  • Find blind references. Seek out peers and direct reports. They will tell you what the negatives or red flags might be.

A Bigger Hiring Pipeline is Worth the Money

Recruiting is expensive, but hiring the wrong person costs even more. Don’t cut corners.

• Be careful not to hire a big name too soon; they will be bored with a small company and an unpolished product.