Startup Vision Definition
“Vision without action is daydreaming and action
without vision is a nightmare” – Chinese Proverb
Defining the vision for you startup is the first step to taking action. At this stage you’re not implementing anything yet, just clarifying what you’re building and why. You’ll want to account for the critical strategic details and when you’re done, it should be easy to put together a concise 3-5 sentence elevator pitch. We’ve created the Startup Vision framework to guide the process of identifying the most important elements of vision and distilling that information into a concise statement.
The value of this process is two-fold: first it forces clarity on key issues such as who you’re serving and what the primary activity of your business is. Second, having a crystallized sound byte can be quite useful when aligning your team around a common direction, or developing a pitch deck to raise money or support.
The Product Vision worksheet is comprised of six categorical boxes, that each ask two questions. Answer each question with a concise phrase. Shorter is better in fact. Mark Twain once commented at the end of a long letter “I didn’t have time to write a short letter, so I wrote a long one instead”, echoing a sentiment that it takes time to compose and distill thought into something simple and concise. That precision is what we’re after here, so invest some time to answer each of these questions accordingly. If something doesn’t apply, you can leave it blank.
Market Segment – Describe the market segment at a personal level. What are the 3-5 most important qualities that best describe the people you are trying to reach? Useful information might include title/role, age, gender, marital status, income, and race/nationality.
Channels (customer access) – How will you access your customers? If this is a common consumer product, you may be able to reach them with online channels such as PPC and affiliate marketing. If your product is more expensive or requires commitment, they user may do research before buying and thus content marketing channels search as SEO and social media may work best. If you need to proactively reach out to customers, phone sales may be appropriate.
Logical Need – Is there an actual problem you are solving? A utility you are providing? If you ask them, they can likely tell you what problem they need solved. Are you solving a specific problem? For example, the need for a marketing CRM system that will automatically reach out to customers and nurture leads to increase efficiency and efficacy.
Emotional Desire – Sometimes desire is a more powerful motivator than need, but it is not always easy to identify. Customers may not realize they want something until they viscerally experience it, but when they do, it can cap into deep emotional triggers such as ego, fear, and happiness. Are you providing an emotional value to someone?
Primary Function – Your product may do many things, but at the end of the day, it will be considered and hopefully purchased because it is the best solution for a specific thing that it does. What is that core competency?
Business Model Archetype – There are seven fundamental “personalities” that every business model inherits from. You should identify which model best fits what you’re creating, as it can provide guidance on how to build your business and what companies to look to as role models. The archetypes are: Product, Trade, Service, Marketplace, Subscription, Brokerage, and Ecosystem.
Differentiation – How will you ensure you’re perceived differently and thus not a substitutable commodity in the market? What makes you special? Answering this question effectively if how you’ll build a competitive barrier and minimize commoditization down the road.
Competitive Advantage – What strength do you have, relative to your competition that you can build from? Play to your strengths when possible. If you are exceptional at design, then you may want to focus the solution we’re building around standout design. If you’re an exceptional sales team, then build upon that strength.
Core Team – who are the founding members of your proposed startup, and what role will they play? You could start with a single founder, but research has found teams with 2-4 founding members are more likely to succeed, particularly when they play complimentary (not redundant roles).
Key Partnerships – Few businesses are self-sufficient and do not require partnerships or providers. Identify what your business will need to source and who your providers/partners will be. Are you able to negotiate preferred sourcing with them, so you’ll have a competitive advantage?
Sunk Costs – Every endeavor will require some up-front investment to get setup and build your product or processes. How much capital will you require to create the business that is ready to begin accepting customers?
Working Capital – There is frequently a gap between account payable and accounts receivable. For some types of businesses, it is not uncommon to have to source raw materials or pay a large staff, but to not capital on those investments until 90 or 120 days later. Consider what kind of gap you might anticipate and how much capital you’ll need to “float” that spread, indefinitely.
Below is an example of what the Startup Vision Definition might look like after it has been filled in. We used the example of building a WordPress theme with IDX marketing automation features that we validated in Startup Scorecard example. We provided concise answers to each question and finally developed an “elevator” pitch, which is a 3-5 sentence description of what your startup is.
Developing a complete vision is the last step in developing a cohesive startup product strategy. What you do with this artifact depends on your context. If you are using these tools to create a slide deck for executives or investors, the vision definition will provide you with the structure and content to develop that presentation. It also provides a well-articulated elevator pitch that you can test for market fit – you can immediately begin getting feedback from customer prospects and build our your prototype or minimal viable product if you find “fit”.