What startups can’t get away with that new service businesses can

What startups can’t get away with that new service businesses can

Dear Founder,

New startup founders on the disruptive innovation journey often begin believing their biggest challenges are:

  1. Building their product
  2. Selling what they’ve built, and
  3. Raising capital to do both. 

This stems from a mistaken belief that they know exactly what they need to build and sell.

As founders travel the Dunning Kruger curve and reach the ‘Slope of Enlightenment,’ they realise the bigger challenge is uncovering:

  1. Working out exactly what product to build
  2. Uncovering exactly who is the ideal customer to sell to, and
  3. Raising capital from aligned investors to support this (or, develop a strategy that allows them to remain bootstrapping, use revenue for growth, and retain full control of their company).

This is very different from the general approach taken when someone decides to start a new service-based business. 

Many founders have a predominantly service-based business background, and as a result, don’t understand the underlying fundamental differences between building a product-based startup vs a service-based business. 

For example, let’s say an entrepreneur is especially skilled in a particular area, like financial advice, recruitment, business consulting, etc. and they decide to create a professional service to offer clients or customers in this area. 

When opening a service-based business, they can simply open up shop and let people know they’re offering the service. 

Anyone who needs it, finds it, and decides their service is better than any other options available – will sign up to use it. 

If the service doesn’t work out for whatever reason, the business owner can simply stop offering it and move on to something else. 

Pivoting can be relatively easy and, depending on the situation, failure isn’t overly costly (though there’s the opportunity cost of spending time running a business in a less-than-ideal way). 

This pathway, however, is simply not an option for a startup creating a software or tech product. 

Why? Because of the key difference between a startup and a service-based business. 

A service-based business follows an already-established and understood business model. 

Everyone knows what an accountant is, for example, and there’s not much variation in the way accounting businesses are run. 

Any accountant can learn it, easily find mentorship from accountants who’ve done it before them, and run with it. 

But a founder building a startup is bringing a brand-new product to market – something that hasn’t been created yet. 

Meaning they also need to build a brand-new business model alongside it to support its production and growth. 

Startups building a product company like this – that are intended primarily to be scaled with technology rather than raw materials or people – must manage their innovation risk. 

Because of the software or tech needed to bring the full-scaled vision to life, there is a massive risk of over-investment in the wrong thing at the wrong time – which is so often the nail in the coffin of what was otherwise a great idea that deserved to be birthed into the world and scaled.  

This is why startups must aim, at all times, to reach Product-Market Fit

While service businesses can get away with a lack of focus on Product-Market Fit, startups cannot. 

If you don’t come to this understanding as a startup founder, you’re at high risk of skipping crucial steps on your startup journey, wasting a huge amount of time and money, and ultimately ending up in the startup graveyard.

LeapSheep supports founders to come to this understanding and build Go-To-Market Strategies that will take them to Product-Market Fit.

We guide enlightened founders to use their resources as efficiently as possible to radically improve their chances of reaching startup success.

If you’re a founder and you’re unsure how to reach your first pilot customers, we can help. Fill out this short questionnaire to tell us about your situation, and we’ll get in touch with your next steps. 

Jump Ahead!



Whenever you’re ready, here’s how we can help you.

If you’ve got a startup idea, or you’ve already embarked on your journey – you might be facing one or both of these situations.

1. You’re struggling while going it alone, unsure of who to turn to for advice.  

2. You’re wading in the muddy waters of some not-so-great advice, wondering how to move out of that situation and into better guidance.

If you’re ready to get the help you need growing your startup, our Startup Builder™ solution was created especially for you. 

The Startup Builder™ process is specifically designed to take you from idea to global success – in a way that’s simple, sustainable, and scalable.

If you’re ready to grow your revenue, profit, and social impact faster without wasting time and money on the wrong things at the wrong time, share your situation with us by filling out this short questionnaire and we’ll get in touch with your next steps.


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