The Flounder Effect: Understanding What You Don’t Know
Entrepreneurship can mean and look like many different things, but this blog will focus on an entrepreneur with a wonderfully clear “AHA! Moment”. They have worked through a situation and believe there is a better way or a solution to a new/old problem. That solution is to create a marketplace for X, which will be the best platform ever. Even though this entrepreneur, let’s call him Nick, has no technical background or experience with marketplaces, he believes he can build this rocket. Nick has a remarkable idea, a precise vision, an old-school work ethic, and the ambition to do it.
Nick will soon experience the “Flounder Effect” because he is in the beginning stages of his new idea and has a gut instinct that this aha moment will change his life. The Flounder Effect embodies a new Founder navigating unfamiliar waters, a common experience for a person about to embark on a new journey. It’s an evocative way to convey the initial lack of confidence and direction that many non-technical founders might feel.
What does it take for Nick to beat the Flounder Effect and turn this dream into a thriving marketplace?
Navigating Uncharted Waters: Overcoming the Knowledge Gap
The Flounder Effect represents when a new Founder has cracked the bottle of champagne on the maiden voyage of their new business but has no compass, weather app, or directions for where they know they must end up.
Nick has an entrepreneurial spirit and is a first-time Founder creating a marketplace business. Nick has no technical background or related experience but knows what he must do.
What would Nick’s journey look like at a high level? Are there any sea creatures he needs to prepare himself to beat? What happens if he gets lost along the way? What about the provisions he will require to reach his distant destination?
Let’s see how Nick would tackle this list:
Business Research & Validation
Business Planning
Mentorship
Tech Partner / Team
Marketplace Strategy
Business Research & Validation
Nick may believe that just because he knows he has a golden egg in his mind, everyone else surely will agree. Nick should thoroughly investigate the marketplace he plans to create and the company he envisions that will be a market contender. Nick has to gain more confidence that the problem he wants to solve is accurate and that people would pay to use it and use this data to infer other decisions soon to come.
Nick’s Investigation list:
Who Has This Problem?
How Many People Have This Problem?
What Are The Existing Solutions?
What Are The Problems With Existing Solutions?
Collect Relatable People To Ask Their Opinion
Business Planning
Let’s say Nick has not created a Business Plan before and doesn’t know where to begin. We would explain to Nick that a Business Plan is a forever evolving document or, more accurately, a combination of documents. Nick would have to build a preliminary Business Plan to gather his thoughts and use as a test document when getting feedback from friends and family.
Nick’s V1 Business Plan Includes:
Marketplace Vision
Marketplace Description
Founder / Co-Founder Compatibility
Operations Plan
Product (Marketplace) Overview
Monetization Plan
Marketing Goals
Mentorship
Nick doesn’t have a full resume of experience to build this marketplace, so he needs to find someone who shares a passion for what he’s about to make and has “seen the movie”; in other words, he has been there and done that.
There are many business coaches and available mentors, but The Mentoring Club offers an excellent matching service and is free. Nick’s journey will likely be lonely without a Co-Founder, and he needs a friend to help guide him through the rough waters of starting a marketplace.
Nick would ideally find two free mentors, one to assist in understanding the technical challenges of building a tech company and the second someone previously working at a marketplace. Nick must realize that a marketplace startup is a different whale entirely from any other business.
Tech Partner or Team
Nick would have to start searching for a team to join him in this tremendous effort to solve the problem of X. His first instinct is likely to hire a developer to begin coding the marketplace, and he’ll search in his network or find an offshore firm.
There is nothing wrong with doing it that way, but there is an indescribable amount of work before any code is written.
A Founder's first hire would ideally be a Product Manager with some, or better yet, a lot of experience. A Product person's role is to take Nick's vision and direction, research it, prototype it, test it, and then document the workflow that will be coded further downstream.
At Marketplace Studio, we are advocates for a strong and defined Pre-Development Process that moves Nick from a genius idea to a Founder with a plan.
Pre-Development Process:
What is the problem?
Resulting in framing your marketplace as the solution
Who has the problem?
Define your Persona Profiles
What is the current market environment?
Market research
If the company was a person, who are they?
Branding & Logo
What workflows are "Must Haves" for a launch?
Phase 1 Backlog (Roadmap)
What will our personas like and not like about this workflow?
Hybrid Design Thinking Sprint
After Nick and Marketplace Studio's team complete these exercises, they will have a much better understanding of what Nick's grand vision tangibly looks like.
Next would be documentation, writing out the Technical User Stories, or the instructions to guide the Dev Team on how to code the must-have workflows.
Marketplace Strategy
Nick would have to start sifting through ideas for launching this Aha marketplace. This is Nick's first marketplace, and Nick needs to figure out where to start or what this process looks like. He can return to his mentors or the Marketplace Studio Team for help.
Marketplace Studio recently launched Digital360, an added layer of services we offer our clients to help with this exact problem and curb the Flounder Effect.
Digital360 comes in three specialties:
Strategy
Go-To-Market
User Acquisition
Supply Acquisition
Business Plan Build / Review
Monetization Forecasting
Fundraising
Investor Relations
Marketplace Pitch Decks (Any Round)
Pitch Strategies
Product Enhancement
Determining KPIs & Metrics
Data Tracking Plan & Implementation
Integration Considerations
User Stories / User Manuals
New Workflow Brainstorm
Design Thinking Sprints
Guiding Lighthouses: The Importance of Expert Direction
Throughout our time at Marketplace Studio, we've come to know two riptides that can take Nick.
The first depicts a story that Nick will certainly not enjoy. Nick decides to find his own Developers or Development Agency to build his Aha marketplace, skipping Pre-Development, Design, Research, Testing, and Iteration. Nick is acting Product Manager (instead of Founder) and must explain to the Dev Shop precisely what he wants done, how it works, and how it looks. This takes extraordinary effort and removes Nick from his should-be position as Founder.
After X time, Nick has spent almost 50 hours per week working with the Dev Shop to build what he has in mind. He's been turned into a Designer, a Technical Writer, a Product Manager, a QA, and everything in between. Eventually, it comes time to see the finished build, and Nick is less than thrilled knowing he has to put $X more into the marketplace. Of course, it could work out well, but Nick just spent all this time building the Product, and there's yet to be anything else done to launch.
What Nick didn't do?
Launch Strategy
Hiring Plan
Marketing & Ops Plan
Raising Investment
Talk to People / Users / Partners
The other riptide that can take Nick is one of the lessons learned from previous efforts by the Marketplace Studio team. Starting our first marketplace, we went down the first riptide and got lost in the world of technical jargon and making too many assumptions. Thankfully, we were humbled in our second year operating our marketplace; we learned through adoption analytics that our assumptions were wrong. We were less geniuses than we initially thought for braving this idea.
Instead, Nick can have a team that makes fewer assumptions, explain their thought process driving different initiatives, and make suggestions for potential improvements. Marketplace Studio does not take orders. We work with Nick under a partnership that becomes the vehicle to drive both of our successes.
Nick can Learn & Build with Marketplace Studio.
Charting a Course: Steps to Boost Confidence
While Nick is working with Marketplace Studio to Learn & Build, he will come to understand that it is highly essential to embrace failures rather than successes. Nick is inevitably going to face plant while running on the wet dock before diving into the lake. Once Nick gets up and wipes off the scraped knee, he will (hopefully) know exactly what not to do before diving into the lake off the wet dock. Of course, learning after watching a stranger do it before you is much better, but learning for yourself is an absolute experience.
We will ask him a few questions after we see Nick face plant on the dock.
What inspired you to run like that?
What was the outcome you were expecting?
Would you do it again if you had the newly gained knowledge before you ran? If yes, then why?
Let's say you're a SCRUM Master/ Product Manager / Product Owner / Dev Manager and have just completed a 3-month sprint and want to host a Retrospective meeting.
Your team is gathered in the boardroom, waiting for the meeting to commence, and you give everyone three cards.
What did you like about this sprint?
What could be improved on our next sprint?
If you could change anything about our next sprint. What would it be?
(This is not a special meeting for just developers; it is common practice in many areas of life. This is just one of the more jargon-filled examples to teach Nick.)
The point is to ensure that Nick understands what happened and to try not to repeat it and learn a valuable lesson.
Partnering with Marketplace Studio: A Beacon in the Flounder Effect
Marketplace Studio was founded by people who were just like Nick. We did not come from a Computer Science background or a Unicorn (Billion Dollar) Company. We learned by going against the current, betting against the odds, and fighting to overcome the Flounder Effect.
Even still, we do not code for work or hobby. Instead, we are constantly learning and refining our crafts so that when we hear of other people like ourselves and Nick who want to start the next big marketplace, we can help.
Our clients partner with Marketplace Studio because they get to Learn & Build. We take the load off their plates so they can focus on starting a scalable business while we handle the Build. We are on Slack and email 7-days a week, answering questions, providing suggestions, and working to enhance Nick's Aha marketplace. We suggest books, case studies, meetings, introductions, and anything we have at our disposal; we provide access to our clients.
We teach through a long process to ensure Nick won't face plant on the dock. We (Marketplace Studio) have already done it, so Nick doesn't have to.
We meet at least twice a week to catch you up on the Build, request specific tasks from you, and bounce ideas off of one another.
If you can relate to Nick and want to learn about all of the times we face-planted, click the button below.
