After having an idea, what are the next steps to take to start a startup?
You got some kick-ass idea for your startup! Great! Fantastic and Fabulous!
Let’s come to business, because an idea for a startup is all about business..
..and a business is all about solving people’s problem to make money, raising funds and making more money (Haha..just going with the start up trend lately).
Let me get very serious now..
..before I write let me tell you why I qualify to write an answer to this question!
I’ve Co-Founded over a half a dozen start ups so far and all of them are profitable. My last venture GoPBN raised $230k in seed round earlier this month.
I short, I will tell you the story of how GoPBN became a reality from an idea. I think that will help you to relate better and strategize how to proceed.
Last year, I started working on developing GoPBN keeping client side in mind before that it was a raw version that we had developed that would take care of our needs.
..but then a lot of our clients started asking for a similar platform for themselves and quickly we started re-building the entire application keeping client side in mind.
I ended up building an in-house team for the development, and quickly started working on scaling up the application.
The easier I thought, the more complicated it got..
Finding the right team was one of the most difficult challenge. It took me several months to put up a team. I interviewed over 2 dozen people every week. You can imagine how much time I was interviewing interviewing people.
The Next biggest challenge was funds..
This was not a big problem because we had our other businesses to support the venture. (Imagine if we had no support, it would have been impossible)..
I didn’t had enough time to code the application myself because I was already swamped with work. Being the CEO of the company, I have tons of responsibility. If I would have to code, then things would have slowed down as I handle the entire company and specially the marketing aspect of the business.
After building the entire team, then came the first major hurdle…
..the estimated projection of the report was wrong. Initially my team told me that the platform will be completed in roughly six months and we had set the budget accordingly..
..but guess what?
It took another 4 months for the platform to get ready before I did a big bang launch which again required money for the promotional purpose.
..those extra 4 months really screwed us up, because you can imagine, that’s 66.67% additional investment.
As a Entrepreneur where you are just starting with a new venture, that’s a ton! That’s a massive number. I am not kidding. Industry standard is around 10–20%..
Then came some series of issues, that we kept working on and kept fixing them which is a part of the product cycle.
I hope the story helps you to relate to everything.
…but now I will get more specific to your question..
Here are the Steps you need to take after developing an Idea:
- First Evaluate the market opportunity. Look at the total number of customers you can make aka the market size.
- Second, look at the execution part of the idea. Is it technical or non-technical? Is it Online or Offline business model?
- I’m assuming it’s online (If it’s not then leave a comment and I will tell you several offline marketing strategy).
- Look for a Co-Founder whose skill sets are exactly the opposite, but likeminded and share the same business values and ethics.
- In this case I am assuming you are the non-techy person. In such a case, look for a person who is a good developer and offer him 50% Equity. The initial business will be equally owned by both of you.
- Now, do a cost analysis. Do you need more team members? If so, then how many. What would be the time projection for the project to complete.
- Next, look into your financials. You will require a decent amount of money even if you are a startup. If anyone says they don’t need any money for a start up then that’s a lie!
- Once you have some initial basic analysis done.. Add +20% on the time completion report and budget.
- Make sure to have enough marketing budget.
- Try to launch big (This will help you to establish you as a leader in the market right away). Saves you a lot on the Opportunity cost because people would trust you and your product.
- Don’t look for funding right away. You will be devaluing your product, your ideas and end up losing a higher amount of equity to the investor. This will leave your pockets in deep hole in the long run.
Please See, I am not going to mention anything about marketing because that’s a different topic altogether.
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