For many young companies, the road to starting up typically involves prototyping a product or idea. You get some traction and go about raising money, iterating, and ultimately building a healthy business that scales over time.

But what if you took the opposite approach?

What if you focused on strengthening all aspects for a healthy business by building a platform for which to launch products that truly delight customers?

While this may be an unorthodox approach, it's one we've implemented at my company Porch.com and it has directly correlated to our explosive growth over the past year and a half.

I believe that taking a "business first" approach can actually lower some of the long-term risks of starting up.

Here are four business-first steps we took while scaling the business.

1) Build an MVP, then an "MEP"

Regardless of whether you start by focusing on the product or the business first, it's important to get validation for your initial idea or product through a Minimum Viable Product (MVP). At my startup, we tested lots of different hypotheses and personally spoke with hundreds of customers to prove our early assumptions--a vital first step.

However, instead of launching broadly with our first MVP, we instead went away and built an MEP or a, "Minimum Excellent Product," which is essentially a more developed product that has durability. It can be a bit more capital-intensive, but getting your MEP correctly lowers the risk by letting you launch with confidence to a large audience.

2) Build competitive moats

If you want to build a strong company with a durable advantage, you have to look past simply adding features to your product. Instead focus on building competitive moats around your business. For example, for a year while we were building our MEP, we formed hundreds of partnerships and acquired data that was exclusive to our business. We secured distribution channels for our product and worked with investors that could bring smart money and connections to the company early on.

When you build moats, whether it's with data, partnerships, IP, or other forms of exclusivity, you strengthen your business and buy yourself time to really focus on the customer.

3) Understand the math

Regardless of the quality of your product, you can't build a sustainable business if you can't make the math around it work. If customers are too expensive to acquire or you can't retain customers, your company simply won't scale. For us, we spent months figuring out the math behind our sales process to clearly understand the metrics and costs behind hiring, training, and retaining great sales people. Once we were able to get the math working, we could pull the lever and creating an engine that would continue to grow the business.

Prioritize getting the math working for your business and build a machine around it.

4) Create culture early

The funny thing about a company culture is that once it's set, it's nearly impossible to change. When you're taking the business first approach to building your startup, you need to ensure that your culture is strong enough to be able to sustain long periods of development without launching widely to customers (especially with engineering). You need to actively build a culture that is durable so that when you do launch and scale quickly, things don't break apart at the seams.

Published on: Apr 18, 2015