A great startup begins with an idea, but it has to be put into practice. Here are 12 steps to get you started on your startup journey.
Step 1: It always starts with an ‘Idea’:
Having an idea is not enough to attract funds. You will need to dig deep into your idea, breaking your idea into parts with the intention to identify what is ‘unique’ about it. What solution are you providing and to what problem? You will have to find out what is your ‘Most Unique Feature’ that helps you stand out from others. Once you have identified it, try to define it in a couple of words and that becomes your‘Unique Selling Point’. Use this to develop your elevator pitch, starting what is the problem, what is your solution and how is it unique? All summed up in less than a minute.
Step 2: Transform words to a prototype:
Now that you are able to define your USP, try to develop a ‘prototype’ around it. When I say prototype, it is not necessary that it has to be a finished product sample. You could take that unique feature of yours and put it into a PowerPoint, Photoshop, or draw it out on a piece of paper, so that you could show it to your potential investors. Investors like to see things that are‘tangible’. And also you could develop a ‘small animated video’ about how your product and the key feature of it ‘works out’ to be (could be as simple as a ‘flowchart’).
Step 3: Take an outside perspective (sampling).
Once you have your prototype, see if you can ‘test it/do a bit of reconnaissance’, which means go out see what others have to say about your prototype. When I say others focus on your ‘prospective customers’. Take a ‘good proportionate and a representative sample’ of it and try to ‘record’ their experience, this will help you in developing a market research report, that will come handy later on. During this step, see whether your customers are able to make head or tail of it. Also try to identify the reasons why your prospective customers ‘will/will not’ see themselves using this product/solution that your company is providing.
Step 4: Develop a ‘functional prototype’:
To many this could be considered as ‘the most difficult and challenging step’ that you may encounter in your journey to raise capital. Transforming a pictorial prototype to a functional prototype is ‘not a cake walk’ as many would agree with me here. However, the intention is not for you to develop a full-fledged product, just try ‘develop that one unique feature of your idea’. Try to develop it by seeking help/support from your friends, friends-of-friends, anyone and everyone who could help you. If you can try to black box your product idea and get pieces of it done from different people. This is essential to protect the ‘Intellectual Property’ of the idea, bearing in mind ‘Ideas are no one’s monopoly’. You could also go for the signing of a ‘Non-Disclosure Agreement’ (with an anti-conflict clause) between yourself and the developers. Having said that, if you could develop the functional prototype on your own or with your partners, there is nothing better. But this is a ‘very tricky ground, so trade carefully’.
Step 5: Customer acquisition (traction control):
This is the next difficult and challenging step – ‘getting traction for your product’. In order for this, make use of all the weapons available in your arsenal. From ‘Facebook to Twitter to YouTube to sending out emails to writing blogs to newspaper articles (through connections) to TV (if you can afford) to partnering with other startups and having a launch party, etc.,’ spread the word around as much as you can. At this stage, the intention is to acquire your potential customers a good chunk of your total customer base. Sadly, however, even after all this, you were unable to acquire a good number of customers, don’t get dis-heartened, go back to the drawing board (Step 1) ‘re-evaluate, re-define, re-engineer, and re-start’. There is seldom any company who got everything right in the first instance. This step will challenge you ‘mentally, physically, and monetary wise’ so be prepared for it.
Step 6: Monetising strategies:
By now you would know for sure that your idea has legs and it has walked a long way on the on the ‘shoulders’ of your unique feature attracting customers. This means that now you can think of ‘developing a business model’ around your feature, which means identifying ways to generate income from your idea. This is the point from where your ‘idea moves along a continuum to become a business’. Herein you should be able to identify who your ‘primary, secondary, and tertiary stakeholders are’. Now these stakeholders will start to play a role in your business at different levels, impact of these stakeholders could be through, for example, fiscal policy, monetary policies, state regulations, excise, HR rules, and many more. Hence, it becomes important to account them into process of developing monetising strategies. In this step you work on monetising your concept looking at different parameters and negotiating your way through different obstacles (beyond your control) and still make profit out of it (if not profit at least breakeven). Upon implementing these strategies, you could procure some funds that would allow you to move on to the next step.
Step 7: Scale your product/solution:
By now you will have traction and cash coming into your bank account from the previous steps. So now it is time ‘to move beyond boundaries’ with the aim of spreading out your wings. In order to do that you will have to ‘scale up’ your product accommodate wider usage (e.g., server with large space, etc.). And by this step, stage is set for you to approach your potential investors with the right numbers knowing how much money you need, for what, where it has to be spent, and what would be the ROI of it. And like that a lot of factual answers to some obvious questions. So the time is perfect to develop your pitch.
Step 8: Create a pitch:
This is the stretched out version of your elevator pitch developed in Step 1. Herein you could create a simple presentation describing the ‘product/ feature set’, results of your ‘market research’ (developed in the previous steps), highlighting the numbers coming out of the ‘traction levels’, ‘market size’ and where you ‘fit’ in the market. The ‘team’ behind (very important) investors not only invest on the idea but they need to be convinced that they could trust you and your team with their money, ‘business model or the monetising strategy’.
Step 9: Finding the ‘Money’:
Once you have developed your pitch, find investors using the local ‘Angel network’, through ‘LinkedIn’, approaching the local ‘University incubation center’, joining any ‘accelerator programme’, any ‘personal contact’, attending ‘Expo’s’ with your demos. You can also promote your product through various mediums waiting for it to catch the attention of potential investors but this is not very common.
Step 10: Delivering the pitch:
‘Trust’ plays a big role in order for handover of money to happen. At this stage you would want the potential investors to trust you. When you are finally in front of the investors, try to showcase your sharpness, thoroughness, diligence, and intelligence. Prove it to them that you are someone they could trust. They don’t expect you to know everything. Before you head out to deliver your pitch be prepared to answer any kind question, running a mock interview would be a good idea here. It is quest so you may be directed from one person to the other, but finally you will reach the right person at the right time. This is the stage where you have only one purpose and that is to impress your potential investors. But again this is not going to be very straightforward, be prepared to ‘face rejections’ and you might have to do this with a number of investors before they go on to decide to ‘invest or syndicate with some else’ to invest in your firm, the ‘Eureka Moment’.
Step 11: Refine your product:
While undergoing the process of finding investments, ‘equal efforts’ have to be put in to constantly refine the product, adjusting it to the changing internal or external variables. In doing so you are increasing your chances to attract investment, investors will not fund projects, wherein their funds are being used for development or marketing, they would prefer to invest in a venture at the stage of scaling. In refining your product you could also be hitting the box of ‘innovation’ and allowing you stay in tune with the latest trend in the market.
Step 12: ‘LionHeart’:
This is more to do with facing adversary and every time you fall or get rejected you dust it off and start all over again. Treat every rejection as a learning lesson. Every entrepreneur has faced rejection. The question is quoting Rocky Balboa here “It’s not how hard you can hit, but how hard you could get hit?” and stand back up.