H. Jun Huh

4 Key Skills Entrepreneurs Must Focus On

Translated by GPT

4 Key Areas Entrepreneurs Must Focus On

The following four capabilities are the most crucial factors for consumer-focused startups in the future. In order of importance, the product comes first, followed by the entrepreneur personally introducing the product, creating a funnel structure that naturally engages customers. Capital will naturally follow.

  1. Product
  2. Entrepreneur
  3. Customer Engagement
  4. Capital

The rapidly growing startups I’ve encountered overwhelmingly possessed these four factors. And I became curious. If I were to start a startup, how should I proceed? First, it was necessary to define what constitutes a good product.

So, what makes a good product?

Creating a good product is challenging. It’s a game of deciding what to focus on and what to eliminate. When Apple initially created the iPhone, there was no App Store1, messaging was slow, and web browsing was frustrating2. It was difficult to use, requiring users to discover features as they went along.

Apple deliberately left the product unfriendly from the start. The functionality was just at a “working” level, and seamless integration remained a challenge. The one thing Apple focused on was the touch experience. They concentrated solely on a smoothly functioning touch interface without lag. They chose and focused on details, minimizing the surface area that needed attention by making it as minimalist as possible. Trying to manage 100 details at once leads to mediocrity, but focusing on 10 details can make those 10 overwhelming. Once the details were nailed down, they gradually eliminated various inconveniences, such as the App Store and speed, which built up to the Apple we know today.

Personally, when discussing good products, I often emphasize distinguishing between inconvenience and unfriendliness. If you increase inconvenience to eliminate unfriendliness, retention will drop. Conversely, if you go out of your way to be friendly to eliminate inconvenience, the churn rate will rise. The appropriate gap between the two is what keeps users engaged with the product and constitutes well-designed UX.

This is the fundamental discussion of a good product. However, something is missing. Why should the product be used? This is the most fundamental question. Why do users spend on this product? Without answering this question, all analysis remains superficial.

There are a few reasons:

  1. It alleviates inconvenience -> Therefore, it’s overwhelmingly convenient compared to other products (=Baemin)
  2. It boosts productivity, increasing my salary or saving time (=ChatGPT, Adobe)
  3. It’s purely entertaining (=YouTube, Netflix)
  4. It showcases my beliefs, desires, or identity (=Fandom)
  5. It connects me with others (=Community)

I believe most consumer businesses fall into these categories. Finding the “Why” of the product’s existence, completing the “How” with the aforementioned details, and continuously refining the “What” by observing consumer behavior data is the essence of business.

To do this, it’s important to try out all consumer products already on the market. Observe as much participation from tech YouTubers and other consumers as possible, both domestically and internationally. Then, return to your product, decide what to improve, and where to focus, repeating this process. It’s easier said than done.

What about the entrepreneur?

Great. Now you can create a good product. If you’re an engineer-type entrepreneur, making it well is a given, so focus more on promoting and selling it well.

  1. Make it well
  2. Promote it well
  3. Sell it well

Ultimately, with the advancement of AI, the technology to create has become standardized. Of course, mastering the skill of making it well still requires study, but anyone with some intelligence can achieve this. Good software comes from well-designed structures and constraints, which are engineering problems that can be solved with existing pipelines and concepts like data flow, design patterns, test code, and CICD.

Therefore, promoting it well is necessary. While it’s important for the software to promote itself, you need to design a structure that makes consumers want to try it. The best method is still writing. Go wherever the customers are, whether it’s X and Threads, LinkedIn, Reddit, or Discord, and build influence until people say, “This is crazy.” The method of promoting well is detailed in the section on encouraging customer engagement.

Lastly, selling it well. The sales funnel is different from viral marketing. Natural virality should lead to natural transactions, but even if you do well with points 1 and 2, many struggle with point 3. That’s why business is a challenging game. You can increase sales by reducing churn and increasing retention through traditional methods, but many startups already do this. As mentioned in the article The Era of MVP is Over from a year ago, such theories, once considered standard, no longer work (to be precise, they have become the basics. Doing only this is not enough). Twisting existing formulas and having the entrepreneur step forward as the face of the product and present the vision is effective, as discussed in the methods of entrepreneurs below (in my personal opinion).

Carl Pei, the founder of Nothing, alternated between introducing his company’s earbuds and those of other companies when creating the initial Nothing earbuds. The company representative personally appeared on YouTube to introduce their product3, and as a result, Nothing has grown into a global product company. First, there was a good product, the entrepreneur personally introduced the product, and customer engagement was encouraged. Moreover, that customer engagement was a unique case where funding was raised by selling shares of the company4.

Airbnb is also very famous. The story of the founders, including the CEO, personally visiting hosts’ homes to assist with guest reception is well-known. From that time, Brian Chesky, the CEO of Airbnb, consistently posted company news on his personal account, becoming a case where the entrepreneur is the face of their product.

It’s not necessary for someone as great as Elon Musk to come forward and communicate with customers. Especially for early-stage startups, it’s crucial for the CEO to come forward and introduce their product. Even shooting a launch video or demo video with a smartphone camera, or making an interesting video about use cases, can suffice. Videos that aren’t overly polished or expensive but have a human touch can open consumers’ wallets and turn them into loyal customers. The unpretentious naturalness creates fans and a niche state with high churn but also high retention.

In that sense, I suggest targeting communities where people are already gathered. It’s more business-savvy to develop existing communities than to create new ones. For example, Landlink targeted the already active meshtastic community in the US and EU. They didn’t target an idealistic field. Approaching business idealistically leads to failure. Let’s take what’s already there.

How to Encourage Customer Engagement

There are three stages to virality.

  1. The entrepreneur tries to create virality, but customers don’t want it
  2. The entrepreneur’s writing or media naturally gains platform attention
  3. Customers independently review the product

Great entrepreneurs target stage 3. I’d like to mention the case of Pickle. My former workplace, Pickle, was the best at creating virality in the US and knew exactly what people needed. When Marques Brownlee talked about Pickle for over 30 minutes on a podcast5, I thought, “This is crazy.” It’s a case where a global influencer independently reviewed the product. It fits perfectly into stage 3.

After the Pickle Launch Video hit 5M views, it trended worldwide on X. The numbers are such that even viral entrepreneurs in Korea can’t compete. (Oh, and being number one in virality in Korea is meaningless. Korea is a fast-follower market, so if you succeed in the US, you automatically succeed in such a market.)

Even after leaving Pickle, my personal project map3d followed a similar path. Someone I didn’t know made a demo video of my product, and accounts spread it across the US, Japan, China, India, and other regions. If you search for map3d on X, you’ll find numerous videos uploaded by various people. Participation rates are high. Moreover, no one knows who started it or where the origin is.

Stages 1 and 2 of virality have limits. Simply achieving high engagement rates on a platform is meaningless. True virality is when a good product naturally goes viral, and an unspecified large number of people introduce my product, leading to a natural spread.

Capital

If the funnel from product, entrepreneur, and customer is cleanly designed to lead to actual sales, capital will come in. If there’s a revenue-generating structure and repeat sales are possible, attracting investment is feasible, and a compound structure can be created. From this point, it might truly be called a business.

The story of Omnisend is worth listening to in this field. It’s an email marketing company that initially received significant seed investment. They received it in the form of convertible notes, and after achieving profitability, they paid back the investors and grew without VC funding6. Obsidian and Notion are similar. They all positioned themselves to refuse capital rather than receive it and decided the company’s direction from that position.

Capital becomes an ally only when you can refuse it.

Footnote

  1. The original iPhone, released on June 29, 2007, had no App Store for downloading third-party apps and came preloaded with only 15 of Apple’s built-in apps. The App Store launched a year later, on July 11, 2008, alongside iPhone OS 2.0 (iPhone 3G). Source: Inverse, “15 Years Ago, Apple’s App Store Changed Everything”, Wikipedia “iPhone”.

  2. The original iPhone did not support 3G and operated only on AT&T’s slow 2.5G EDGE network, making data speed the main point of criticism in the NYT and WSJ reviews at launch. Source: Wikipedia “iPhone (1st generation)”, AppleInsider.

  3. Carl Pei frequently appears personally on the company’s YouTube channel to introduce new products, respond to customer reviews, and even analyze competitors’ devices. The Nothing Ear (2) was unveiled through a launch video in a studio-style unboxing format. Source: Medium, “The Story of Nothing”, Rustle Town.

  4. Believing it could not compete head-on with Apple on marketing spend, Nothing adopted a community-centered strategy. Its CEO sits on the board, the company released fan-edition products shaped by community feedback, and this is an extension of the direct-to-consumer (D2C) approach Carl Pei had used since his OnePlus days. Source: Techsponential, “Nothing Is Premium Now: Interview with CEO Carl Pei”.

  5. https://youtu.be/TPqmGfulrfw?si=X7K9rX6LWTMLt6nn

  6. The email marketing SaaS Omnisend initially raised a roughly $160,000 angel round in the form of a convertible note, and after turning profitable it repaid most of it, then grew while bootstrapped and cash-flow positive. As of 2019, it recorded $6.5 million in ARR.

← Back