This article was originally posted on the Tech City UK website.
One of the greatest qualities of the startup ecosystem is the desire to learn fast and share knowledge. We hear from Tom MacThomas, Head of Marketing Forward Partners, one of the leading UK idea and seed stage venture funds, on why they decided to ‘pay it forward’ by open sourcing their methodology, The Path Forward.
Why did we create The Path Forward?
At Forward Partners we get the opportunity to work with a small number of talented entrepreneurs and businesses that fit our investment criteria. However, we know there are many entrepreneurs and businesses across the UK that we don’t see. We believe that we have a responsibility to the startup community: to aim to help all businesses whether we’ve backed them or not. As a result, we wanted to open source our internal process so that all UK startups can be guided through the tried and tested steps we put in place with businesses that we fund. Our goal is to contribute to a richer, increasingly vibrant ecosystem by helping to create a greater number of higher quality startups. The Path Forward is our way of helping to achieve that.
What is The Path Forward?
When we invest in an entrepreneur at idea stage, we take them through a twelve month process called The Path Forward. This process is formed of three distinct steps, which are made up of a 2 month, a 4 month and a 6 month stage. These steps focus on idea validation, product development and the creation of a scalable, valuable business.
Associated with each step there are a number of activities which we guide our portfolio companies through, with the help of our in-house startup team. These activities vary from design sprints and performing lots of customer interviews all the way to ensuring there is a robust business model and the right team is hired. We release articles every week on The Path Forward website which address each activity. These articles are a great way to pick up new skills and get actionable ideas for your business.
Within the first step, Valid Idea, we focus on three waypoints along the path. First comes Proven Need, which uses customer interviews to validate the problems the business is trying to solve and to ensure there is a big addressable market. Following this, we help our businesses create a Resonant Prototype which means that customers emotionally connect with the MVP. This step also features defining the Right Skills – so that the founder has or can source the requisite product, design and development skills to build their MVP.
In month 3 we move into Valued Product. This contains the Passionate Advocates waypoint, which involves building a product that customers really enjoy, measured by unprompted messages of support by, for example, Twitter or email. The Growing Product waypoint helps to achieve the foundations for a scalable technology platform and gets the right marketing channels in place. Also in this step is Emerging Team. This waypoint centres around the need to have at least one other senior hire within the business, possibly a co-founder.
The final step is entitled Valuable Business. In this 6 month step we focus on Scalable Economics. At this stage, there should be a clear path for customer acquisition costs to be or to become lower than the estimated lifetime value of a cohort. Rapid Growth then targets metric-driven growth in the order of 20-30% month on month. Growth should become an ingrained mindset in the business. Finally we aim to build an Empowered Team, where all key functional areas contain people with a good level of expertise. The team is usually 5-10 people strong by this time.
How does it work?
One example of a recent company that has followed The Path Forward with great success is Live Better With – a one-stop shop for those living with cancer, with all the products and information needed to improve the quality of day-to-day life.
Using The Path Forward, Live Better With was able to go from raw idea/business plan to launching in the UK within 3 weeks, then rolling out into the US within five months. This is certainly a testament to the Live Better With team being incredibly passionate and driven about what they wanted to achieve. However, by being able to prioritise activities using The Path Forward framework they were able to progress the business very quickly into two key territories.
Tamara Rajah, Founder and CEO of Live Better With comments “Unless you’ve done it multiple times before, as a Founder you don’t know what you don’t know. The Path Forward is a very useful tool to track your startup’s progress against some clear chronological goals. It helped me think through what to focus on next and got Live Better With off the ground very quickly.”
You can get on The Path Forward and subscribe to our weekly newsletter here.
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