Testing the market before you build a product

Mangabox on Instagram

Jason Kottke’s just shared an interesting story about Instagram shops which are doing gangbusters in Kuwait.

A description from ‘shop’ owner Fatima Al Qadiri:

If you have an Instagram account, you can slap a price tag on anything, take a picture of it, and sell it. For instance, you could take this can of San Pellegrino, paint it pink, put a heart on it, call it yours, and declare it for sale. Even my grandmother has an Instagram business! She sells dried fruit.

Amazing. This is not only such a low-impact way of testing the market for a particular product, but it’s so smartly circumventing issues around modern shopping cart systems.

Specifically, the sellers can:

  1. Easily update their inventory from their mobile phone.
  2. Quickly share new inventory across multiple networks.
  3. Easily conduct their business from their mobile phones by leveraging low-cost options like WhatsApp.
  4. Leverage another network without the need to integrate APIs. In this case, by using Instagram directly.

No storefront maintenance, no hosting requirements, no need for a desktop or tablet, no fancy marketing. Just the goods.

This kind of lightweight testing is great for getting an understanding of market interest in your product and can lead to great insights, just like the four noted above.

[Ed.note: This post originally appeared Say Yeah! blog on Friday, July 12, 2013. It has been republished here with permission]

When Does a Startup Stop Being a Startup?

Editor’s note: This is a cross post from Mark Evans Tech written by Mark Evans of ME Consulting. Follow him on Twitter @markevans or MarkEvansTech.com. This post was originally published in January 11, 2012 on MarkEvansTech.com.

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This may be a question of semantics but here’s a question for you: When does a startup stop being a startup? At what point does a startup become a small company or a plain and simple company?

It’s an interesting question because it’s easy – and probably lazy – to describe less established high-tech companies as startups. As well, the word “startup” is lot sexier and appealing than “small business”.

So how should a startup be defined? Does it have to do with the evolution and life-cycle of its product? Is it the number of employees? Is it linked to revenue? Does it have to do with how long a company has been around? Can a startup have 10s of thousands of customers even if none of them actually pay for a service?

For example, is Freshbooks a startup despite the fact it has been around for several years, it has 80 employees and sales of about $10-million give or take a few million dollars? It’s sometimes called a startup but it’s more accurate to call it a small company.

For the sake of argument, here are some possible criteria for startups:

  1. Less than 20 employees. Once you get more  than this number of employees, a company starts to have “departments”
  2. A product still in development (pre-launch) or in market as a beta for less than six months.
  3. No sales or sales of less than $1-million, which means it’s a mini-business as opposed to a small business.
  4. It’s less than a year old, although there are companies that do go from zero to sixty in less than 364 days.
  5. No customers or only a handful of customers, who may or may not be significant clients dollars-wise.
  6. It has raised more than $5-million in venture capital. With this kind of cash, a company can support having a large team.

For more thoughts, check out this Q&A on Quora, as well as a recent blog post on Business Insider.

Editor’s note: This is a cross post from Mark Evans Tech written by Mark Evans of ME Consulting. Follow him on Twitter @markevans or MarkEvansTech.com. This post was originally published in January 11, 2012 on MarkEvansTech.com.

Does your startup need to be massive?

Editor’s note: This is a guest post by serial entrepreneur and investor Howard Lindzon of StockTwits and SocialLeverage. He was born and raised in Toronto and has a soft spot for his hometown and Canadian entrepreneurs.  Follow him on Twitter @howardlindzon or StockTwits @howardlindzon.

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In 2008, I was using every speaking chance I was offered to preach that there was never a better time to start a web business. I also put my money where my mouth was and invested in more companies than I could afford and started Stocktwits.

Let’s assume you followed the advice and failed. Most startups do. You were Lindzon’d. Sorry.

Good news…you learned a lot and the funding market, never easy, is more open than ever.

Better yet, the mentoring system and pool of talented angel investors looking to reinvest has never been wider and deeper.

Techmeme, Hacker News, Fred Wilson, Brad Feld, LInked In, Twitter, Facebook and of course Stocktwits ….all better than ever for connecting, getting smarter about starting businesses and finding the right trends to ride. Y combinator may be too crowded, but Tech Stars, Founder Labs and Startup Weekends are open.

It is a little intimidating right now to take the first steps because of the bubble talk, startup revolution, competition and massive reach of the last group of leaders. There is not one Tiger Woods of startups, there are 5 you will ultimately stress yourself out comparing yourself too…Facebook, Twitter, Linked In, Zynga and Groupon.

Don’t get caught up in the ‘I need to be Massive’ talk. It’s a trap. Take the ‘Massive’ lessons of geniuses like Reid Hoffman from this great post and than get to work on getting massive one step at a time.

The game of Risk and world domination is won from the corners of the world unless you can roll non stop 6?s. Don’t bet on that stuff and don’t pitch your investors on stuff they won’t believe.

Editors Note: This post was originally published on HowardLindzon.com on March 23, 2011 @copy;2011 Howard Lindzon. Republished with permission.