Also, let's now talk about the new products or startups. This is probably the most exciting part of the class. And honestly, the most complex part because managing new product and managing a startup was more of an art than a science and there is no consensus on what's the most important things and what you need to do to succeed. While there is still some opinions on what is critically important to do, right? Because if you do those things wrong, the chances of success will be preaching negligent. And let us start with just making it an explicit statement that new products and startups in general are pretty hard.

And if you're thinking about going into startup versus joining like a growth company or mature product company, you need to think twice, maybe even three times because again, startups are really, really hard and lots of smart people talk about this. I'm giving you two links in this class one is a Paul Graham from what Y Combinator and one is Marc Andreessen the each of them talks about how difficult startups and like each of them gives you more than 10 reasons of why not do a startup. So I would just suggest that You read those articles and like pretty carefully and you make decision for yourself whether you're ready for this type of an emotional roller coaster and like zero free time and like lots of other responsibilities and commitments you need to be able to dive into while you take startup risk. Now that committee decision to start a company or join an early stage startup or to start managing a new product, let's discuss what is important.

So what do you need to be focused on and what where do you critically need to succeed? There is again a wide wide range of topics which are important, I will be just talking about several of them, which I believe are of critical importance. And the first one is talking to customers. So some people call it doing things which do not scale there is many different reasons. But basically, it's all about learning how to reduce the amount of risk you're taking. Many people believe startups are about and startups and startup founders are about taking success.

In fact, it's a better way to believe that startup startups and startup founders are becoming successful. Only one they can eliminate success and focus on what's important while diversifying and removing every bit of uncertainty which is possible. So the best way I'm aware of doing this is actually talking to your customers. And the person I really trust previously told me that like before you talk to hundred customers, you can assume that you know nothing about the products and the space in the market you're in. So just go talk to customers take the notepad, take the pen and paper and just listen and write just just talk listen and write this is critically important. Then the same kind of concept, but it's maybe a little bit more general is like doing things which do not scale many in many cases founders and startup employees and product managers believe they need to only do things which can be done on a scale such as, for instance, how can I talk to million customers at the same time it is impossible, okay, let me not talk to customers because it's not sustainable.

So this logic, I really want to emphasize this logic is wrong and false you should not follow this logic. It is critically important for you to engage in things which do not Scale bars are critically important that this particular life's life stage of your company, in talking to customers, just one perfect example, which you absolutely need to be doing as much as possible every single day. Now that we covered a critical importance of doing things which do not scale, and in particular talking to customers, let's talk about storytelling for a little bit. Like what is storytelling? And why is it important? First of all, when you do a start up when when when you do a new product?

In many cases, it's really not obvious to other people what it does, and how is it valuable to me and like, why should they even Why should they even care? Why should they even sign up? So it's pretty common. It is pretty wide consensus by now that it's critically important for you to tell a story to not just explain, this is what we're doing. This is what our product does, but to always have a consistent and engaging story behind your product for different kinds of stakeholders. You need to have a story for your customers.

You need to have a story for your investors and you need to have a story for your employees. This is how you engage them. This is how you deliver the message and this is how you Make yourself more likely to succeed. Without the story, your probability of success is probably going to be way, way lower. So please do spend time and effort defining the story and crafting your story in a very convincing and engaging way. Okay, so now before we start talking about success formula for new product, let us spend some time talking about the concept of lean and minimum viable products.

And I decided to speak about them because, again, it's becoming a pretty predominant school of thought about managing new products and startups. And sometimes those concepts seem pretty mysterious to people. What does it even mean? What does lean product mean and what is minimum viable product? Basically, again, on a high level, and I will send you to a degreaser regional paper for more details, but on a very high level, the lean philosophy and methodology is just about eliminating risk as inexpensively as possible. Just making sure that you can get the certainty the fastest and most efficient way.

What is meant by this is like one good way to demonstrate that is to build minimum buy Apple products whenever is possible. And one of the most critical concepts in lean startup is minimum viable product. Let's talk about this. What does it even mean? minimum viable product. First of all, it needs to be viable, right?

It's a key word minimum was actually not as critical as viable the product needs to deliver on some customer expectations, the product is need to be able to solve a problem that customer have, if your product does not solve the problem. If your customers are not happy about your product, your product is not viable. So do make a product viable. And now minimum, like once you know that your product is viable, always challenge every single assumption in getting to this product like is is this particular feature important for me to keep this viable? What's going to happen if I remove this, what's going to happen if I not do this, so always have this mindset, you always need to be thinking in absolute minimum terms to satisfy the minimum requirement that that makes products viable, minimum is key. If you build something more than minimum, your are less efficient than you should and again, you will be less secure As your probability of success will be lower.

Now that we're all agreed that startups are hard, and we talked a little bit about what's important for startups, in particular, talking to customers telling a story, and building building your product in the lean way, let's discuss the success formula. So what makes a startup successful? And how do you succeed? Again, my way of looking at this is not the only right way, but I really like the framework by Marc Andreessen and I just I would like to talk about four key definitions, four key factors of success, which you can multiply by each other to make it a success formula and those will be marked as number one, product is number two, team is number three, and loc is number four. So let's talk about each of them one by one. One is market.

Marc Andreessen believes this is by far the most important factor for startup successful failure. And I tend to agree, like why is that and what is the market market is basically the total amount of the need or total pain that the problem is trying to solve. And so in simple terms, business people usually define marketing dollars and it wouldn't be like the typical definition of a market for product or service would be what's the total amount of money the customers pay in aggregate worldwide for this product or service in this particular year, but you can generalize, you can always think about the market as again as a need or pain, it does not have to be measured in money, it just needs to exist. And it needs to be a problem that people that you're solving to people. So this is the market, you need to always be able to size the market before you dive into your company.

And you need to go for as big of a market as possible to maximize the chances of your success. So to succeed with a new product, it is critically important that you always size the market and you always try to define market in a way that makes it as big as possible. This way, the chance of success will be bigger. Now that we talked about market. Let's talk a little bit about the team because it's another critical factor to startup success. What what's the success criteria for the team and what kind of team that makes startup successful?

It's very, very complex topic again, but there is several observations, which I want to share with you and those observations also come from very simple For people such as Paul Graham and Marc Andreessen or Sam Walton, so that is pretty wide consensus on what to do with the team and what mistakes not to make. So number one advice is always try to have a co founder do not go into startup alone. And again, startups are hard. We just talked about this. And in general, having a co founder makes it way more likely for you to raise funds to build better products and to be successful. Why?

There may be lots of reasons One reason is when you're doing something, not alone, it means that there is someone else who bought into your idea, the chances of two people being crazy about the same thing at the same time are way smaller than the chances of one person being crazy. And honestly, just having someone getting into you makes makes your idea and your approach and your venture way more attractive and way more attractive to the outside or to investor into a customer. Second, once you decided that you want a co founder do choose your co founder very carefully, it is critically important some Sometimes people spend a lot of time and effort to recruit their employees, but they just sometimes select the co founder from some random party, hey, do you want to start a company let's start a company. This is something you should not be doing this sometimes work.

But more frequently does not. You really need to know the person really well that you start company with. You need to be able to relate to some common topics or problems or interest because startups will again, they hard there will be really difficult periods in your relationships. And if it's just a random person next to you, the chance of success is going down. Finally, that we discussed that you need a co founder and you need to be very selective with a co founder. Try to identify any conflicts and try to resolve them early as possible.

So this is the third key advice on the team and why is it important conflicts are unavoidable The longer you wait, the more conflict conflict escalates. And the more likely the conflict is to kill kill your company in kill your startup and kill your product. So please try to identify them as early as you can and easily Have them as early as you can. And the extension of the same logic would be to basically fire employees that did not work out early on, right? Like you need to identify the fact that things and things are not working out early and fix however painful it is fix the problem right now. Otherwise, your chances of success will go down.

This coverage is our team topic. Now let's talk about product this whole. This whole class is about product. So I feel like we already have talked a little bit quite a bit about it. But let's make several key key concluding remarks what makes project successful and what you should be paying attention to, while developing a new product. And let me refer you to the article on LinkedIn by Jeff winner, which was called what makes truly great products.

I completely agree to all the five attributes of successful products in this article, I'm just going to cover each of them here. First, the product must be able to deliver on some single unique value proposition It does not have to be one but but the product needs to be able to do at least one thing really well. Something that does five things immediately. is probably not a successful product, you better focus on one thing and do it really, really well. That's that's item number one. Item number two is the product needs to be simple and intuitive to use to be successful.

If you look at all the successful products, you know, they're all intuitive and simple to use. That's self explanatory. Third thing is the product needs to exceed expectations. This is a pretty deep concept, but what it means is sometimes project may be rough, but still can work out really well when there is such a big need and such a big pain which has not been solved by anyone else. So if expectations are pretty low, and you build a relatively rough kind of product, which is still not polished, you still may succeed, but in some other cases when the expectations are very, very high in the customer have lots of alternatives. Even if you build a very very good product and very strong product you may not you may not succeed because expectations are not met.

Successful product mix must always exceed expectations. Number four, the product emotionally resonates with a customer This one is a trickier and honestly I understand not confident that every successful product does Emotional reasoning. But if your product does emotionally resonate with the customer, it is more likely to succeed. Finally, now that we talked about the market, the team and the product, let's spend a minute talking about luck. Luck is the most mysterious concept and I'm not going to give you my opinions. I'm just going to give you a link to again, a very nice book and advice by Marc Andreessen, which I use today is my framework for luck.

This book is called chase chance and creativity and the book is by Dr. James Olsen. And the reference to this book you can find in a post by Marc Andreessen on locking intrapreneur to four kinds of luck. Basically, there are four kinds of chance or luck, luck num luck number one is a purely stochastic is just a random like you may get hundred dollars today or you may not it does not depend on you. It's just luck. The luck number two is something that depends on your efforts. So for instance, when you wake up early and go to work early, you're more likely to find $100 just because I have not been able to pick it up before you so this is just effort, effort component.

The luck Number three is it adds to effort, some knowledge, right. So for instance, when I go to work, I take certain route, which is more likely to yield me hundred dollars just because again, I know that there is a bar on this route and people, for instance, may have lost hundred dollars the previous night. Finally, the fourth kind of luck is the most complex and probably the most interesting concept and it says luck, which is very specific and particular to you and your interests. So when you learn certain things in your life, and when you care about certain things, you start attracting some kinds of people to yourself, and you start attracting certain kinds of luck, which is otherwise not available to people who do not apply this effort and who have not, who do not have those interests. So those are the four kinds of luck you can think of.

And while some of those are not in your control, the some of those are well in your control, so you should be able to optimize on luck as well.