Entrepreneurship has become so glamorized in our culture that it’s easy to underestimate just how hard it is to get a startup off the ground.
We are constantly bombarded with success stories of founders who have made millions – or, in some cases, billions – of dollars with their startups.
It’s important to remember survivorship bias here: if we only look at the successes without also looking at the failures, we will develop an inaccurate perception of reality. And the reality is that 90% of startups fail.
However, if your dream is to build a successful startup, you shouldn’t let that statistic demoralize you. It’s not something that is completely outside of your control like winning a lottery.
In the world of entrepreneurship, your behavior has a significant impact on your outcomes. You can increase your odds of success by taking the right actions.
That’s why today we want to share the seven key strategies that can help you overcome common startup challenges…
- Strategy #1: Bootstrap Instead of Seeking Funding
- Strategy #2: Focus on Something That Already Has Proven Demand
- Strategy #3: Sell Painkillers, Not Vitamins
- Strategy #4: Understand That the Only Way to Validate Your Product is to Build it and Charge for it
- Strategy #5: Build MVPs as Fast as You Can
- Strategy #6: Get Your First Users With Cold Outreach
- Strategy #7: Build a Sales Funnel for Your Product
Strategy #1: Bootstrap Instead of Seeking Funding
VC-funded startups that are coming out of Silicon Valley get the most media attention so it’s understandable if you believe that the only way to succeed is to get funding.
However, we encourage you to examine that assumption. There’s an entire subculture of software entrepreneurs who are bootstrapping their startups without bringing in outside investors.
These software entrepreneurs call themselves “indie hackers”, have an ethos of scrappiness, and aim to build self-sustaining, profitable businesses.
Typically, indie hackers either have regular jobs and build their startups as side hustles or save up money from their salaries and then use it as a “runway” to focus on their startups full-time.
There’s also a huge overlap between the indie hacker subculture and the digital nomad subculture: indie hackers often move to low-cost-of-living countries in order to extend their runways.
The most successful entrepreneur in that scene is undeniably Pieter Levels. At the time of writing, he’s generating over $350k/month in revenue. That’s more than $4.2M per year!
Levels is an extreme outlier but there are plenty of indie hackers out there who are making six figures with their bootstrapped startups.
Of course, survivorship bias applies here as well. If you start following the indie hacker scene on Twitter, seeing all those success stories can make you believe that everyone except you is making tons of money with apps that they built over the weekend.
That’s why it’s important to temper your expectations. “Ask HN: Starting a business is way harder than Twitter-bros claim. Any advice?” post on Hacker News is probably more representative of the average aspiring software entrepreneur experience than what you see on Twitter.
Also, some people who pursue this dream develop severe mental health problems and burnout.
You might want to read “I am done. I give up” on Hacker News. This post was written by an aspiring entrepreneur who gave up after three failed attempts at building a startup and spending some time institutionalized.
All that being said, the indie hacker approach is the least risky way to build software startups. If that’s what you want to do, it might make sense to explore this path instead of seeking funding.
Of course, if you have an idea for a hardware startup or a biotech startup, then it’s an entirely different situation. It might not be possible to build it without raising capital. You will need to seek funding in that case.
Strategy #2: Focus on Something That Already Has Proven Demand
The startup world is obsessed with “innovation”, “disruption” and “going from zero to one”. But we would argue that it’s leading aspiring entrepreneurs astray.
If you already have a big idea that you want to pursue and you know that you will regret it if you don’t, then by all means do that if you are willing to take on the associated risks. Who are we to tell you that you shouldn’t?
But if you want to build a sustainable business in order to create a better life for yourself and your loved ones, innovation is not the best path towards realizing that dream.
You’ll have much higher odds of success if you take something that already has proven demand and figure out how to make it better.
For example, when Nathan Barry launched ConvertKit back in 2013, there were plenty of email marketing apps already.
However, the big players in that space like MailChimp and Aweber were offering generic solutions. They were okay tools that got the job done but left much to be desired when it came to specific use cases.
That’s where Barry saw an opportunity. As a blogger, he knew what the popular email marketing apps lacked for that particular use case, so he decided to focus on making ConvertKit the best email marketing tool for bloggers. Over time, he expanded his target audience to all kinds of online creators.
Now, more than a decade later, his company is generating eight figures. At the time of writing, its monthly recurring revenue is $3.5M+, which adds up to $42M+ in annual recurring revenue.
We recommend following a similar strategy: pick something that has proven demand, niche down to a specific, clearly-defined demographic, and then focus on creating the best product for that particular use case. You can always expand your target audience later if there’s a need for that!
Strategy #3: Sell Painkillers, Not Vitamins
Marc Louvion, an indie hacker who makes nearly $60k/month with his apps at the time of writing, explained the difference between “painkiller” products and “vitamin” products on his blog.
He shared that once he spent an entire year working on a gamified habit tracker called Habits Garden. Despite having 10,000 accounts and a ton of happy users, this app was making less than $400/month.
Meanwhile, one of his other products, his now-discontinued escape room marketing tool called VirallyBot, was making $600/month, despite the fact that at the time, Louvion hadn’t touched it for several years.
According to him, the key difference between these two apps was this:
- VirallyBot was a must-have “painkiller” product that addressed a painful problem (escape rooms need marketing).
- Habit Garden was a nice-to-have “vitamin” product (it’s cool to track habits).
He argued that if you want to reach profitability faster, you should focus on building painkiller products instead of vitamin ones!
Strategy #4: Understand That the Only Way to Validate Your Product is to Build it and Charge for it
Dan Norris’ article “Is Startup Validation Bullshit?” is well worth a read.
In that article, Norris questioned some of the approaches to idea validation that were popular at the time when it was published.
He also shared his experiences with his app Informly and what he learned from them.
Here are some of the key takeaways:
- People saying that they like your idea doesn’t mean that it’s a good idea. Dan got a ton of positive feedback from those around him.
- Thought leaders saying that they like your idea doesn’t mean that it’s a good idea. Dan got positive feedback from a famous venture capitalist.
- Building a pre-launch email list doesn’t mean that it’s a good idea. Dan had a pre-launch email list with more than 1,000 subscribers.
- Getting free users doesn’t mean that it’s a good idea. Informly had 4,000+ free users but only 15 of them converted into paying customers.
- Favorable media coverage doesn’t mean that it’s a good idea. Informly was covered by several popular tech websites, including Mashable and The Next Web.
At the time, everything was seemingly indicating that Informly was destined to be a success but it still failed despite all that.
In our view, the most important lesson here is that ultimately, the only product validation that counts is people paying for your product and using it!
Strategy #5: Build MVPs as Fast as You Can
The concept of a minimum viable product (MVP) was popularized by Eric Ries in his 2011 book “The Lean Startup”.
An MVP is supposed to be the minimum viable version of your product that only has the core functionality needed to provide value to the user.
One of the most notable differences between how VC-funded entrepreneurs approach creating software and how indie hackers approach it is the speed at which they build MVPs.
VC-funded entrepreneurs tend to take months to launch their MVPs while indie hackers do it in weeks, days, and in some cases, hours.
For example, once Nico Jeannen saw a tweet where someone said that they would pay for an app that allowed them to enhance the picture quality of old photos.
Jeannen already knew how to do it because he had previously edited old photos for his mom using AI. So he decided to build an MVP for an AI photo editing app.
He saw that tweet early in the morning and challenged himself to launch an MVP by 7 PM because he already had plans for that evening. Guess what?
He started working on it at 7.45 AM and managed to not only launch PhotoRestore but also make the first sale by 1.40 PM!
Jeannen’s MVP was a landing page advertising a photo editing service where he would edit the customers’ photos himself and send them the HD version within 24 hours.
He intended to turn PhotoRestore into a software product if he saw enough demand for it. In around two weeks, this service made $39.78. It has since been discontinued.
While PhotoRestore did not become a success, it’s a great example of how indie hackers build and launch MVPs at breakneck speed.
The reasoning behind it is simple: if you keep building products, eventually some of them will take off.
This approach does seem to work:
- Pieter Levels built 70+ products in the last decade
- Marc Louvion built 23 products in the last few years
- Nico Jeannen built 17 products in just one year
We should once again remember survivorship bias here. There probably are quite a few people out there who built a bunch of products in a short period of time and still failed.
However, if you want to make it as an indie hacker, this seems to be the best way to go about it. Luck is an important factor and the more times you roll the dice, the more likely you will be to succeed!
Strategy #6: Get Your First Users With Cold Outreach
The greatest challenge for any new startup is customer acquisition. So how can you get your first users?
We would argue that the best way to do that is cold outreach:
Cold Calls
If your startup is in the B2B space, cold calling probably makes the most sense.
Go on Fiverr, find a lead generation expert, and ask them to compile a list of 100 leads based on your criteria (industry, company size, annual revenue, etc.)
That list should include the phone number and the email address of each company’s founder or CEO.
(Unless you want to target a different decision-maker. For example, if you are selling something super technical, it might make more sense to cold-call the CTO).
Once you have your lead list, start calling the decision-makers. You can use this cold calling framework:
It’s impossible to predict what your conversion rates are going to be but a good initial target that you can aim for is 1 sale for every 100 cold calls!
Cold Email
Cold email can be another great way to acquire customers in the early stages.
For example, Justin McGill used cold email to grow his startup LeadFuze from zero to $30k in annual revenue in one year.
His cold email template was based on a “QVC” formula:
- Question – Lead with a question that is somehow related to your business.
- Value proposition – Explain how your product can help make their lives better. What’s in it for them?
- Call to action – Ask them if they would be interested in seeing a product demo.
Here’s a sample cold email that follows this formula:
A few days after that initial cold email, McGill would follow up and then continue following up once a week until he got a yes or no answer.
It’s worth noting that he would add this P.S. section to all his emails to provide the prospect with a way to opt out:
Cold Social Media DMs
All major social media platforms allow their users to send direct messages to other users, which means that you can also do cold outreach via social media DMs.
That being said, you’ll probably have more success if you use social media marketing to build a following and then DM people who already know who you are.
Strategy #7: Build a Sales Funnel for Your Product
Our co-founders Russell Brunson and Todd Dickerson launched ClickFunnels back in 2013.
In just five years, they bootstrapped their software startup to $100M+ in annual revenue. So how did they do it?
Their secret was the Value Ladder sales funnel that was developed by Russell:
If you have already validated your product idea by getting your first customers, we recommend building a Value Ladder sales funnel for your business.
We believe that this is the best way to sell software. It can help you grow your startup faster than you ever thought possible!
Want to Learn How to Build Sales Funnels That CONVERT?
Our co-founder Russell Brunson used sales funnels to take ClickFunnels from zero to $100M+ in annual revenue in just five years.
He is now widely considered to be one of the top sales funnel experts in the world. Want to learn from him?
His best-selling book “DotCom Secrets” is the best place to start because it covers everything you need to know in order to build sales funnels that convert.
This book is available on Amazon where it has over 2,500 global ratings and a 4.7-star overall rating.
But you can also get it directly from us for free…
All we ask is that you pay for shipping!
So what are you waiting for? 🧐