4 Steps to Start-Up Success

4 Steps to Start-Up Success

While sitting on the beach one day in Amelia Island, Florida, I noticed my children (6 and 5 at the time) frantically building something in the sand. The detail at which they were scalping this thing was beautiful. They ran over to me when it was finished and said, “Daddy, Daddy, look what we created!”  I responded, “What a beautiful sandcastle you built!”  They both looked at me and laughed replying, “Don’t be silly, it’s a rocket ship.”  From that day forward, I’ve been mesmerized by innovators and entrepreneurs.  I could just imagine what people thought of Nikola Tesla when he said he was going to power the world with AC electricity; or the Wright Brothers talking of building the first airplane or Bill Gates and Steve Jobs when they were building their software and computers introducing these new and exciting products that no one had ever experienced before. What did the people say who witnessed these revolutionary products – how did they look at them, like they were crazy?  Did these innovators understand how disruptive their products were?

I’ve learned over the years that developing a new product, service or company comes in 4 steps: innovation, creation, customer development and business building.  Let’s investigate each of these four steps and discuss how one affects the other and explore how this process could help new and aspiring entrepreneurs along with assisting Intrapreneurs who operate within a large company.

  1. Innovation – This is the “aha” moment that many innovators have experienced – it’s the part of the process that requires the most open-mindedness and out of the mind thinking imaginable. The innovation comes from the pain point that needs to be corrected in an industry, business or personal life style. Innovation is looking at a problem and coming up with the solution that will save people time, money, headaches, and potential failure. There are two types of solutions to a problem: 1) is it a nice to have or 2) is it a need? The latter is always the better one to have.


I remember when I started my subrogation company I was introduced to an attorney who was working on subrogation cases for insurance companies – subrogation just means collection after a car accident. It took the insurance company 10 months to try and collect followed by a further two years when the debt was passed to a third party in an attempt to collect the debt. The inefficiency of that industry was amazing. I had the “aha” moment while sitting in this attorney’s office to make the process more efficient, saving the insurance industry time and money. We’ll use this example throughout this article.


  1. Creation – Now it’s time to start building your Minimum Viable Product (MVP). I created this as a power point presentation showing screen shots, applications, and ease of use. Remember, there was no back end to this product and service as it was all in my mind. The creativity part was putting it in some type of MVP so I could show it to potential clients. After a lot of research, I was now ready to present my hypothesis to my potential clients, which leads you to the Customer Development phase of project …..


  1. Customer Development – The old way of starting a company or developing a new product or service was to come up with an idea, obtain seed money from investors, start product development inside a building only (not talking to any customers to get feedback), do some alpha and beta testing with an evangelist (who would have purchased the product no matter what), then launch it on a timeframe. This is a disaster waiting to happen: read the Webvan debacle.

thisTo help hone my model, I visited every subrogation company in the US and the UK. I showed them my MVP constantly asking questions and watching their excitement grow.  Many iterations later, a great product was born that I knew clients wanted and needed, they told me (imagine that). It proved to be a game changer for our company. Let me introduce the customer development stages as I did with my new product and company creation. Customer Development is broken up into 4 categories: 1) Customer Discovery; 2) Customer Verification; 3) Customer Creation; and 4) Company Building. Put simply, when a company or start-up is completed using this process, they have a complete picture of who the customer is, what the customer desires, how the customer wants it delivered, and what price they would be willing to pay. Can you believe that companies and start-ups don’t use this methodology all the time?

  1. searchBusiness Building – Now it’s time to build the business structure around the new product or service. Before this four-step process existed in my world, new start-ups and companies would start the company first, hire a bunch of expensive employees (i.e. marketing, sales, lots of VPs etc.) before talking to one customer.  Building the company business model last but on the above foundation will dramatically increase your chances of success.

I’d like to invite all my readers to go to the Udacity web site and cycle through the 12 videos of Steve Blanks introducing the Customer Discovery and Business Model Canvas. This is a 15-week course I teach at the University of Virginia which has created some really cool companies. I use this in my Private Equity Firm looking at investing in a new company or developing a new company myself. This detailed process has saved me tens of thousands of dollars.

If you’d like more information please feel free to contact me at dmuir@muirandassociates.net

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Douglas Muir is an authority in business strategy, having successfully built several multimillion-dollar enterprises from the ground up. He is considered the start-up guru and speaks internationally on topics of entrepreneurship, innovation, and business growth. Muir teaches Entrepreneurship at the prestigious University of Virginia, both in the School of Engineering and in the Darden School of Business’s MBA program. As well as being a professor, he is the Assistant Director of the Business Minor Program in the School of Engineering. He is an expert in the Business Model Canvas theory of building businesses, and teaches this methodology to undergraduate students thirsty for entrepreneurship and eager to start their own companies. Muir has been interviewed by Gerri Willis of CNN and by Bloomberg Radio, and has been published and quoted in numerous publications including Business Week and The Scotsman Guide, a prestigious magazine for the banking, mortgage, and investor industry. Douglas was the host of The Doug and Eric Show on ABC, “Exposing the Hidden Truths about the Three Credit Bureaus and the Banking and Finance System”. He was featured in Kaihan Krippendorff's business tactics book, Hide a Dagger Behind a Smile, which described how Muir infiltrated the insurance industry and locked out his competition. If you’d like more information please feel free to contact me at dmuir@muirandassociates.net