Do you have a briliant idea for a startup in mind? Avoid these common mistakes: (part 1)
First of all, when I will be talking about all the common mistakes people do at the very beginning of their startups, I will be referring not only to people I have met while working as a business developer for our company in Czech Republic or here in Silicon Valley, where I currently meet business owners everyday, but also to my own mistakes I have made while working on my own projects like I already mentioned in my previous article.
“I have an idea but I am not going to tell anybody because they might steal it”.
Very common situation when people tend to require to sign NDA’s (non-disclosure agreement) before they start talking about their ideas. I always say when you are able to recreate the same or even better startup just because somebody told you the main idea in 5 minutes then either your startup is not sophisticated enough or you as a CEO suck. There are also benefits of sharing your basic idea with as many people as possible because they can possibly refer you to people who might help you, you get free feedback for which normally huge corporations pay a lot of money and many of these people will even come up with better parts of your solution for your idea.
“My business will be targeting people from every profession, country, with any age, language, culture etc”.
Maybe after 10 years it might be possible… Is Facebook targeting everybody? Well, now almost yes but do you remember how they started? In order to have an account you had to be a Harvard student (later another universities joined). So the social network with currently almost 2.2 billion users started with a target group of ~23K Harvard students. A good way how to find your first target group a.k.a. early adopters is to analyze the problems of a single entity, solve them and then trying to find similar entities (for example invent a machine for producing burgers for a single burger-making restaurant with many customers but lack of qualified employees and apply this criteria for all the next ones).
“I have an idea, a customer and a team but I cannot start without an investment”
The first thing you do shouldn’t be looking for an investor. Your initial team has to be able to produce a prototype / MVP (Minimum viable product) or a first working version without any aid. Of course, I am not talking about capital intensive businesses but mostly about businesses focused on software development or similar. Once you can show some traction or pre-arranged contracts with the customers and there is no other way to scale up your business without an investment you can start looking for an angel investor.
“Hi! My idea can cure cancer thanks to all 23 steps we have invented starting with number 1. which bla bla bla”
What is “one-liner”, why do I need it and why is it such a big deal? One-liner is a sentence which can fit into one line (surprise 😲) and describes your startup in 1–2 sentences.
Why is it so necesery to know it? According to article from techcrunch.com the startups have to contact around 70 angel investors before they get an investment. If it’s a good investor he will be probably busy and won’t have more than few minutes to talk to you. That’s why you need a catchy one-liner so you get his attention and he will remember you. A bad vs. good example could be from an awesome czech startup company I met who claim:
Bad example: “We are making intelligent bowls and collars for dogs which collect data, analyze them and ensuring your dog stays healthy”.
Good example: “We can prolong your dog’s life for another 2 years”. This ensures they will start asking questions like how is that possible? why 2? and they will actually listen to you.
In this part we found out it is necesery to share your idea with as many people as possible, be sure at the beginning our target group is specific enough, have an MVP before reaching out an investor and have an one-liner prepared for him.
More of the mistakes entrepreneurs usually do I will cover in the second part of this article. Please follow me if you want to be notified once is available and if you want to know more about me or you need to consult your business idea please visit my website https://vladimirelias.com/ and don’t hesitate to contact me.