Everyone wants to start their own business, but it can be a really intimidating process. It’s not just about having an idea and running with it. There are many steps you need to take before you’re able to turn your idea into reality, and this blog post will walk you through each step of the way!
A startup is an exciting business venture aimed at giving birth to a successful company.
Starting up requires courage and a good amount of luck. Moreover, it takes immense efforts and perseverance on the part of entrepreneurs to ensure that their ventures take off successfully. It’s not surprising that most aspiring entrepreneurs don’t succeed in their first attempt itself. What they lack is practical knowledge about the field: how difficult or tricky it may be, what challenges lie ahead etc.
In this answer, I will focus on things that aspiring entrepreneurs should know before starting up a new venture (not necessarily limited to startups).
Things They Should Know Before Starting Up A New Venture:
Here are some things they should know before starting up:
1. Launch Vs Build:
How do we decide whether to launch or build? For example, if your startup sells SIM cards, do you want to work from scratch on a mobile app and roll out a new website for it or use the existing one? Take another example of an advertising agency: is it better to get started by launching already existing business in a new city (re-branding) or setting up from scratch there? Starting from scratch is always more difficult than repurposing an existing one. When getting started, you have to lay foundation for your company: find office space, hire employees who fit well with your vision and take care of other administrative issues . Launching an existing company would mean that there is already a team in place (and they may be doing well) and you need to work on the branding part only.
2. Inadequate Planning : Is It Necessary To Write A Business Plan?
As much as I am no fan of business plans, it’s still necessary to plan the startup meticulously. Entrepreneurs should develop measurable goals , put them up against their current position, analyze how far they are from achieving these goals and then devise plans to close the gap. With a business plan, you can evaluate your progress and adopt new strategies if needed.
3. Who Should We Focus On?
Usually, startups focus on product-led businesses or service-led businesses:
Product -Led Businesses: In this case, the startup focuses on building great products/services that solve customer problems before selling them to customers. The value lies in these products/services (not in sales). Think of Microsoft Office or Adobe Photoshop . Service — Led Businesses : This is more traditional way of doing business where the company would sell its expertise through services (sales guys talk with clients and take orders) rather than a specific product (think of consultants).
4. We Are More Target Oriented Than Customer-Led:
Many aspirants are more target oriented than customer focused (target orientation may be called goal-oriented). If you want to achieve your dream of starting up a startup, then it’s very important to understand that entrepreneurs should satisfy the needs of their customers/clients and not their own targets. A lot of startups fail because they don’t take into account the wants, beliefs, values etc of their customers . Think about it this way: when was the last time you used Google Maps? For all practical purposes, maps have been replaced by GPS (global positioning system) but many people still use Google Maps because they think that there is no other way to get directions. This is exactly what happens with many startups that fail even though their product/service (which would have been a success few years back) may not be needed by people anymore.
5. Customer Value Vs Product Value:
A lot of aspirants focus more on the features and functions of their products than customer value . They think that customers need certain features but they don’t understand why do these customers need those features. You should always start your product development process with the question ‘What problem does this feature solve?’ For example, you find an existing solution to a common problem but you want to develop something new because you can improve upon it in some way without losing its core functionality (think Google Docs vs Open Office).
6. We Focus Too Much On The Features of Our Product:
A lot of aspirants are obsessed with the features and functions of their product/service but they don’t understand that all these features and functions add value to customers only when they solve a problem/
7. Do We Have To Follow Any Design Patterns?
Many young entrepreneurs think that there are certain ‘design patterns’ out there which dictate how a particular product should be structured to ensure its success. As a result, they are scared to innovate or bring about certain changes because these changes might go against the design patterns.
8. What’s With The Name?
This is something you’ll get wrong over and over again unless you ask people what they think your name means (or have a good reason for naming your startup).
9. Can We Use Social Media In Marketing Our Startup?
Most startups tend to rely heavily on social media in marketing their products/services even before defining customer problems properly or identifying target markets/communities . They forget that most social media sites are built more for entertainment than business communication and hence don’t work very well as an effective medium of communication/marketing when comes to business transactions. There are exceptions to this (Twitter) but they’re few and far between.
10. Simple Or Ready-To-Use?
This is where many aspirants focus too much on building something simple rather than building something ready-to-use . They don’t understand that it’s very difficult to choose the right path in the initial stages of your startup because you have a limited view of how things will turn out once you start bringing people in . This is exactly why most startups fail — they build something too simple while their customers want something more usable (ready-made).
11. What Is A Minimum Viable Product?
This is what most aspirants think when they begin product development by first designing everything from the ground up and then coding it all down. They try to build the product as advertised in their marketing material (even if that means getting rid of many features) rather than building something which can provide some kind of value for users in its basic form .
12. How To Not Get Lost In The Analytics:
Many startups get stuck with their analytics dashboard because they think that you can learn everything from data, when in reality you will only be wasting your time trying to find answers without looking at your current customers’ behaviour (what they like/hate about your service).
13. What Is Our Unique Selling Proposition?
Most aspirants don’t take note of this and spend a lot of time thinking through different names for their startups (instead of focusing on the actual problem/solution). They think that they’ll be able to create a unique selling proposition based on some unique feature or function of their product, which is not necessarily true.
14. Are We Building The right Product For the Right Market?
This happens when you don’t do some market research before starting your startup and thus build something people might not need.
15. Do People Need Something Different from Us?
A lot of aspirants focus too much on what other similar businesses are doing rather than focusing on whether their target customers are happy with these existing solutions or not (the more fundamental question).
16. How To Understand What Makes A Good Startup Story:
You will notice that most startup stories begin with telling you about the founder: who he is, what was his previous profession, where did he work before etc. You will also notice common elements in these stories like how the idea of the startup came to him and how he built it alone during nights while working a day job or raising funding for it. If your own story does not share enough such details then you are doing something wrong somewhere.
17. What Are Our Strengths?
This is something all startups seem to overlook because they’re too busy thinking about their weaknesses which they believe they need help/advice from others to deal with . They think that building a startup requires this kind of thinking but in reality this attitude has done more harm than good to most startups. If you do not have a clear understanding of what your strengths are then it is very unlikely that you can build something valuable.
18. What Is Our Unique Value Proposition?
This happens when you try too hard to be different from others instead of focusing on what makes you valuable . You might find similarities between different businesses and think that this will help make your startup stand out but in reality doing so is just like copying someone else’s work (which shouldn’t matter if the service has already been provided before).
19. Will I Be Able To Build The Product On My Own?
The more people involved in building the product, the higher percentage chance there is that something wrong/redundant will be added or removed from its core functionality. The second thing you need to consider when hiring people for your startup is whether they are worth paying and whether they will be able to deliver high quality work in the short time-frame.
20. Do We Have Enough Funding To Start?
Many aspirants think that their business idea is good enough without even testing it first, which means that at some point down the road they’ll either go out of business or have to completely change their direction (which isn’t necessarily a bad thing if done early on).
21. Are We Doing This For The Right Reasons?
Ideas don’t come to us based on how much we want them but rather because we’re supposed to build them . If you’re doing something just because you want to build a startup then you really don’t have a problem. It’s when you’re doing something because someone else wants you to that things get complicated.
22. Are We Addressing Real Pain?
If your target customers are not suffering enough with their current problem/solution then there is no point building your alternative solution for them.
23. What Is the State of Our Technology?
It is the technology part of your business which will help determine if your product can be created successfully or not (the more complex it is, the harder it will be) .
24. What Are Some Of The Biggest Financial Decisions We Need To Make In The Next Three Months And How Have They Changed From The Last Three Months?
It’s usually the last three months before you run out of funding that you’ll notice what is working and what isn’t in your business, which means that this period is really important .
25. Are We Including The Right People In The Product Development Process And Do They Have Enough Information To Make Good Decisions?
The most efficient way to build a product is by involving just those people who are directly involved on a daily basis .
26. What Is Our Money Making Plan?
Some businesses will have an easy time making money while some others won’t (this depends mainly on their target customers). So make sure that you know how your startup will attract enough paying customers for it to be profitable because if you don’t, then you’ll constantly struggle to make money in the first few years.
27. How Will We Attract Customers If Our Product Is Not Yet Ready?
Most startup entrepreneurs just keep working on their product without knowing how they are going to attract paying customers before it is even ready .
28. What Are Some Funding Sources We Can Pursue To Help Us Get The Startup Off The Ground And Where Should We Go For More Information If We Have To Do That?
(For this question I recommend reading “ Bootstrapping a Business: The Ultimate Guide to Fundraising for Entrepreneurs and Small Business Owners “).
29. How Much Money Do We Need To Achieve Certain Milestones?
It’s important that you have milestones set from the start because you need to constantly measure your progress and reassess if what is being done is actually working .