⚙️ How to Reverse Engineer Success...
7 step-by-step strategies to deconstruct startups effectively: Learn how to analyze and apply successful elements from other startups to enhance your business model and strategy for improved performance and innovation.
A Step-By-Step Guide to Deconstructing Startups
Ever wonder why some businesses work and others fail? There’s no silver bullet, but unpacking a successful or failed business can help you learn a lot. In this post, we'll arm you with a treasure map – a step-by-step guide that will help you unearth hidden gems of business insights.
It’s called Deconstruction, the process of separating complex systems into the smallest subsystems possible to help understand them. In the real-world context, it's akin to reverse-engineering the critical decisions startup founders made to get where they are.
Here’s how…
Step 1: Choose a Target & Objective
Select a startup that aligns with your goals or interests. Consider a business that targets the same market with a different product or service. Understanding how they delight your ideal customer can help you find nuggets.
Outline what you hope to learn: marketing strategy, revenue model or perhaps their team structure. Pose a specific question: "Why do the best people love to work there?" or “Why do people buy from them at that price?” etc.
Step 2: Analyse the Business & the Market
Study the business model, including revenue streams, customer acquisition costs, and retention rates. Public interviews and annual reports are good sources. And also look for patents or exclusive technologies that give a competitive edge.
Identify competitors and analyse market trends. This will help you understand the startup's position and unique selling proposition in its ecosystem.
Step 3: Examine the Team
Look into the backgrounds of the founding team and key employees. Skills, experience, and roles can reveal much about a business's success or failure.
Step 4: Identify Key Milestones or Pivots
Recognise the moments when the business made significant changes or reached important goals. What led to these moments, and how did the business capitalise on them? What did they do differently from this point on?
Step 5: Consolidate & Strategise
Compile your research into notes and share it with your team (or outside advisor) to unpack what you can learn from these insights. Can you draw actionable insights? This could be anything from a unique customer retention strategy to a successful revenue model.
Step 6: Implement and Test
Apply the insights you’ve gathered to your own startup. Track these changes meticulously so you can evaluate their effectiveness.
Step 7: Repeat
Continuously analyse other startups to update and refine your strategies. Remember, in the fast-changing world of startups, standing still is akin to moving backwards. Keep deconstructing, keep learning, and keep iterating!