Trajectory Startup: Ideation to Product-Market Fit (Book Review)
Trajectory: Startup is a book by Dave Parker, a serial entrepreneur and tech investor. Dave previously headed Startup America (now part of UP Global) and Founder Institute Seattle (where I originally met him). He is also a Techstars mentor and board member of several companies with successful exits.
It is perhaps the most practical guide I’ve come across for someone who has an idea and would like to found a company--from fleshing out the idea, incorporation, finding product market fit, competitor analysis and raising capital. Having a proven process clearly laid out for you in granular detail, will help you save time and avoid a lot of mistakes.
Dave’s advice is clearly based on ‘in the trenches’ experience from the hundreds of startups he has coached through various programs. It is a must-read for everyone considering a tech startup, and a great companion to Eric Reiss’ Lean Startup and Steve Blank’s Four Steps to Epiphany.
If you are doing a B2B startup, it is irresponsible--and founder malpractice of the highest order--not to go through it! Below are some of the key takeaways:
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Keep your day job for now and work on your startup on evenings and weekends. While it may feel audacious to “burn the ships” and “go all in” you should defer this to when you have some form of validation of your idea. This could be sign-ups on your website’s landing-page to the ultimate form of validation: paying customers.
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Have important co-founder discussions as early as possible. Deciding who gets how much of the company can be an awkward topic and most founders avoid it until forced by circumstances, which often leads to ugly disputes that can destroy an otherwise promising company.
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Be extra careful when hiring salespeople. Most people who talk a good game are not actually good at selling!
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He lists lots of different tools one can use when searching for product market fit. Everything from tools to build quick landing pages, to Ahrefs for competitor traffic analysis, to WayBackMachine for seeing what the websites of startups that failed in your category looked like, and many, many more!
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When pitching investors never start with a rhetorical question e.g “How many of you in this room wears socks?” (Something inexperienced founders do to show how large their market is).
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Also when pitching to investors never tag team. One person should present throughout. In the short time you have, it is just too easy for things to go off track or for your partner to look and feel awkward, and be a distraction, when not speaking.
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Pick one main revenue model. Early on you likely don’t have the resources to pursue more than one. He does a nice summary of the 14 major revenue models, noting that “SaaS is not a revenue model but a delivery mechanism” :) While it is tempting to look at a company like Amazon that has so many, they too started with just book sales. Interestingly, according to Dave’s research, having more than one revenue model correlates highly with long-term success.
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Avoid lawyers and service providers who say they can help you raise money, as a way of getting your business. These are the leeches of the startup ecosystem. Most good and experienced startup lawyers can introduce you to investors in their network but no one can raise capital on your behalf!
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Know when to quit. Dave addresses the age-old question of startups--the healthy persistence required to succeed vs. foolish stubbornness.
Overall a fun read (I listened to the Audible version) and I highly recommend it. Even as a founder long past the product-market fit phase, I still learned a lot from it.
