What do Successful Startups Have in Common?

What do successful startups have in common? According to Eric Reiss, it’s not necessarily the great ideas of their founders. Rather, it is their “pivot”, or their ability to change direction in response to feedback on the initial idea. The pivot is a systematic way to keep one foot rooted in what was learned, but step with the other foot into something new. It helps create the zig-zag path startups take when developing new products.

Traditional product development looks like a waterfall. You start with requirements to specification, move to design, implementation, verification, and then maintenance. This model works where both the problem and solution are relatively understood, but is a bad model for start-ups. Startups need to focus on what is called “agile” product development.

Agile product development is an iterative process that allows for uncertainty. The model begins with customer discovery, moves to customer validation, customer creation, then scale up. Both the problem and the solution are unknown, but validated learning drives success. The startup loop begins with ideas, moves to a building phase, then product development, measurement, data collection, learning, and the process starts all over again.

Successful startups are lean and can get through this loop faster. Fast startups can test more ideas before they run out of money. This is doing more with less.

Reiss asks the question: As government employees, what types of experiments would you run? A great question for us to consider!