Starting a startup isn’t just about opening your doors or launching your website. Long before that happens, it’s about planning to launch.
There’s a real art form in the planning, and those who have launched a lot of startups — as we have — approach launching a new idea very differently from someone who’s just taking on their first startup.
Simply put — we emphasize spending as little time as possible on chasing ideas that may not work. We’re nuts about efficiency.
We know that time is both our friend and our greatest enemy. And we do everything we can to protect our time so it’s spent in the most efficient way possible.
So what does that actually look like? Here are 10 steps to launching a startup, from someone who’s been there (a few times).
1. Identify the Problem — Not the Solution
We all get enamored with brilliant solutions: “Wouldn’t it be great if…” is the mantra of every new startup. But it’s much more important to articulate the problem than the solution right now.
For example, the solution might be that Netflix delivers movies on any device for $15 per month.
But the problem is far more important: Cable is too expensive. Broadcast television severely limits your choices of what you can watch.
People are now using mobile devices, as opposed to their TVs, to consume content, so multi-form factor output is important. All of these concerns should form the basis of what your solution will ultimately become.
The solution can change over time as you get more familiar with the problem, but spending some serious time articulating the core problem will help guide your efforts around everything from marketing to product development — at every step of the way.
It’s the North Star of a startup.
2. Conduct Basic Research
Before you lift a finger or talk to anyone about your idea, research the hell out of it online. Every minute you invest in researching online saves you 10 minutes of building your startup blindly, only to find out out that customers are flocking to a different solution to the problem you’re solving.
Don’t limit your research to “Is there another company doing the exact same thing?” There may not be.
Instead, focus on “Where can I find examples of how people are solving this problem in a different way?”
People were watching plenty of movies before Netflix. So it’s not like the problem of watching movies wasn’t already being solved in different ways.
Find out what customers spend on the problem now. Read online reviews to find out if they’re happy about it.
You’re building a picture of how the problem you’re solving is currently being solved — and where the holes are — so you can start to formulate the best possible product.
3. Interview Experts
Nine times out of ten, the answer you’re seeking already exists in someone’s head. Often that head belongs to someone who’s worked in some version of your industry before.
If you’re Netflix founder Reed Hastings, you’d be interviewing people who worked at the highest levels of Blockbuster, HBO, Time Warner Cable, or major studios.
You want to find out why the existing solutions don’t seem to be working as they should. You want to hear their war stories and learn from them, instead of having to learn the hard way yourself.
If you’re nervous about approaching an expert — who may be someone you’ve looked up to for years — I have a pro tip: You’d be shocked at how willing people are to help.
Nothing gets an industry expert talking like asking questions about the world they’ve lived in for so long. Reach out to strangers and ask hard questions. Go deep on interviews.
Think of every question you get answered from an expert as a shortcut to an entire lifetime of experience you don’t have to gain from scratch.
4. Develop a Product Concept
Long before you actually start working on the actual product, you need a product concept.
This is the story you would tell a prospective customer about what the product will be some day. You need to give it as much detail as possible, without actually having the product.
Reed at Netflix would say “Imagine you could open your Web browser and instantly access thousands of movies and TV shows whenever you wanted them, on any device.”
He’d go on to explain how you could watch entire seasons of shows, jump from one device to the other while watching the same show, and all the other wonderful features that Netflix boasts.
Your product concept is critical. It’s what you’ll share and refine a million times before you start spending actual cycles building the real thing.
Functionally, it can be anything from a paragraph text description to concept sketches to a PowerPoint presentation.
What’s important is that it paints a picture that potential customers can react to.
5. Get Beta Users
Beta users are your very first customers. In some cases, they’re customers before you have “real” customers.
They’re the people who are willing to try your stuff out when anyone else wouldn’t even think about it. They are your early adopters.
You don’t have to wait until you have a product to get beta users. You can start by identifying those who would be a likely customer (not just your roommate who happens to be sitting next to you on the couch).
You can begin with your product concept and eventually transition to your actual product later on.
What’s important now is that you identify these users and keep learning from them as you refine the product.
It doesn’t have to be a massive group — it could be five to 10 people — but you have to keep presenting your idea to them until it clicks.
6. Launch a Minimum Viable Product (MVP)
MVPs are usually associated with tech startups, but they aren’t limited to tech startups. The idea is to create the simplest version of your product and let your beta users play with it.
Almost every startup can create an MVP. It just requires some creativity.
For example, if you’re opening a restaurant, your MVP could be cooking the exact menu you have in mind for dinner parties in your neighborhood or catered events.
If you were going to create a fashion brand, it would be creating a handful of samples that you convince your beta users to wear.
If you were starting a services business (like accounting), you’d bring on a handful of clients free of charge in order to show them how your service works.
The MVP isn’t just about making early money. It’s about knowing for a fact that your first attempt at a product will be flawed — probably many times over — and about using this iteration as a way to learn how to improve the product until it’s awesome.
7. Acquire Unknown Customers
You’ll often find your beta users from people you know. They’re basically the “low hanging fruit” of people who clearly have an interest in your product.
That’s super helpful, but the real test is getting strangers to use your product. That’s where early customer acquisition becomes important.
There are essentially three parts to early customer acquisition:
- Refining the offer (What does your Facebook ad read?)
- Adjusting your conversion (What’s on your landing page when people click your ad?)
- Optimizing the price (What’s the perfect price and offer type?).
Chance are you’ll refine these three elements hundreds of times before you get them right. What’s important now though is just starting the testing process.
In the online world, that often means running ads on Google and Facebook, sending customers to a landing page to sign up, and then trying to figure out how to convert that signup into a paid customer.
But that’s just one way to acquire unknown customers. Your version could involve sourcing new clients, how to convert them into a sale (during a sales call for instance) and then how to maximize their value by keeping them as a client.
In every case, it’s just another version of learning how you’re going to acquire customers.
8. Commit to a Brand Promise
As you talk to more and more customers, you’re going to start to see a pattern emerge around what they really want and expect out of your product.
They are essentially asking for your “brand promise” — what can your brand promise to deliver if people use your product.
If you’re running a yoga studio, can your brand promise an incredibly uplifting experience? How?
Every great brand (and some shitty ones) are built on a brand promise that keeps customers coming back. You need to refine your brand promise and move that to the top of all of your communications.
It’s not just a tagline on the bottle of your craft beer. It’s an implicit feeling that you can constantly deliver every time someone interacts with your company or your product.
9. Maximize Customer Feedback
As startups grow, they often look at customer service as a necessary evil to keep selling more product. That’s definitely the wrong approach.
A formative startup wants as much customer feedback as possible, no matter how awful it may sound at the time.
At Startups.co we have over a million companies on our platform and every single one of them gets an email from the Founder + CEO Wil Schroter. (Hit Reply and see how quickly I respond!)
Instead of looking at it as a million potential complaints, we look at it as a million potential points of feedback. And all of our customers are founders themselves, so they provide amazing feedback!
Maximizing customer feedback is the lifeblood of a new startups product roadmap. Every single data point helps shape the highly formative nature of the product.
That includes every possible channel from in-person customer interactions to back and forth tweets to voicemails left after hours.
Every data point matters because every customer interaction tells a story of where the product is supposed to be going.
And the last step of the cycle of launching a startup is reassessment. It’s time to take a look at what you’ve done and honestly decide whether or not it’s a good idea to keep going — or if it’s time for a pivot.
What are you hearing from your customers? Do you have a clear path forward? Or does it seem like your initial idea isn’t going to cut it, after all? Is someone else doing it much better than you ever could?
Be honest with yourself, because continuing on with a startup that’s not working is a great way to go bankrupt.
You might have to go through this cycle a few times before you find the idea that truly fits both your market and your passions.
But when you get there — when you finally nail that perfect idea and product/market fit — there’s nothing better.
I’ll see you when you get there.
What are the 4 basics to a start up business? ›
Requirements for Starting a Business
An ownership or business structure. A business registration certificate. A legal license or seller's permit (as well as other legal documents) A source of funding.
- Build an MVP the market wants.
- Validate the app with early adopters.
- Iterate to meet product-market fit.
- Build a skilled and unified founding team.
- Get the funding you need to grow.
- Develop and practice an agile methodology.
- Generate funding and scale team.
- Discover your big idea.
- Research your product and audience.
- Calculate your startup costs.
- Source products.
- Figure out your shipping strategy.
- Develop a brand strategy and brand identity.
- Build and launch your website.
- Register your business.
- Vision. A strong core starts with a strong vision. ...
- Values. Entrepreneurs need to have a central value to their company. ...
- Product and Engineering. Effective sales and marketing used to be the foundation of great companies. ...
- Feedback Loops. ...
- Resilience. ...
Capital, Product and Marketing are the three key pillars through which a startup can become a sustainable company in the long run. Many startups end up focusing only on one or, at most, two of these pillars, which negatively affects them sooner or later.What are 10 things you need to start a business? ›
- Identify a creative idea. ...
- Write a business plan. ...
- Choose a legal structure. ...
- Get your business registration, licenses and tax identification. ...
- Know your competition and the marketplace. ...
- Finance your business. ...
- Identify and secure a location. ...
- Get proper insurance.
The average cost of starting a tech company is $1 million. Of course, you can always bootstrap your tech startup. This means that you start the company with very little money and grow it organically. Many tech startups begin this way and it can be a great way to get your business off the ground.Can a single person start a tech company? ›
Being a founder and having a startup does not require that you build a scalable technology company. Lifestyle and small business molds can be a good fit for single founders and provide lucrative paths, both financially and professionally.How much does the average tech startup sell for? ›
A Crunchbase analysis (it's somewhat dated, from 2013) shows the average “successful” startup exited for $243 million. Their definition of “successful” includes startups that have raised at least one round of funding; the average successful startup in their mold has raised $41 million in venture capital.Is YC startup school free? ›
Startup School is a free resource created by YC for anyone considering starting their own company.
Can I start a startup alone? ›
So, can a single person start a startup? Absolutely. The data puts solo founders in excellent company. To understand why, let's take a look at the role founders play in establishing thriving businesses.What are the 15 steps to starting a business? ›
- Brainstorm and refine your business idea.
- Pick a business name.
- Create a professional website.
- Conduct market research.
- Write up a business plan.
- Build a pitch deck.
- Choose a legal structure.
- Secure capital and cash flow.
- Create an executive summary. ...
- Write a company description. ...
- Conduct a market analysis. ...
- Outline your business structure. ...
- Define your products and services. ...
- Write out a marketing and sales plan. ...
- Gather your business financials. ...
- Outline your financial projections.
- Test your concept. ...
- Build a business plan. ...
- Work on your sales pitch. ...
- Find funding. ...
- Decide on a business structure. ...
- Get the right licenses and permits. ...
- Open a business bank account. ...
- Organize your accounting.
A startup needs to have a solid plan for how it will attract and keep customers. This can be through marketing, sales, or other means. It's important to focus on acquiring and retaining customers early on in the life of your startup. One way to do this is by providing great customer service.How do I make a startup from scratch? ›
- Ideation and Solution/Validation.
- Find your Dream Team.
- Customer Persona & Customer Validation.
- Prototype & Validation.
- Marketing Plan & Building a Landing Page.
- Business and Revenue Model.
- Lifestyle startups.
- Small business startups.
- Scalable startups.
- Buyable startups.
- Large company Startups.
- Social startups.
- Entrepreneurs are everywhere.
- Entrepreneurship is management.
- Validated learning.
- Innovation Accounting.
The startup action plan contains several incentives for the sector including recognition to the start-ups and tax concessions to them. It also gives encouragement to startup ecosystem players including incentives to incubators, recognition of associated players in the startup ecosystem like accelerators, mentors etc.What are the 4 gates in entrepreneurship? ›
The unique book about entrepreneurship and innovation, has the 4-Gate Model of Prosperity: the need for Preparation, Marketing, Execution and Self-Leadership.
What are 5 tips to start a business? ›
- Find what you are passionate about. The first ingredient to a business is a burning passion for the industry you're part of. ...
- Find others who share the same passion. It's not enough to simply be passionate about something. ...
- Create a business model. ...
- Test your product. ...
- Build a team.
You've given some thought to the three things that make a business successful, or at least what many people agree those three things are: filling an important need or want among customers, operating efficiently and making a profit.What are the 6 factors to consider when starting a small business? ›
- Turn your idea into a plan. Every entrepreneurial journey starts with an idea. ...
- Self-discipline. ...
- Be flexible. ...
- Follow your passion. ...
- Listen to the pros. ...
- Find a nurturing environment for entrepreneurs.
- A great idea. “No business can develop in the absence of a great idea. ...
- Funding and budget. ...
- What is your business plan? ...
- Legal documentation. ...
- Passion. ...
- Find the right equipment. ...
- Know when you need help.
- Start with a Good Business Idea. If you're wondering how to start a business, it may be easier than you think. ...
- Conduct Research About Your Business Idea. ...
- Write a Business Plan. ...
- Make Your New Business Official. ...
- Know Your Finances. ...
- Protect Your Business. ...
- Build Your Business.
It's absolutely possible to start a business with no money, or at least with so little you'll hardly miss it. If you're ready to apply hard work, ingenuity, and resourcefulness, your business can be up and running in no time. Here are some tips on how to start a business with no money.What are key startup costs? ›
Startup costs are the expenses incurred during the process of creating a new business. Pre-opening startup costs include a business plan, research expenses, borrowing costs, and expenses for technology. Post-opening startup costs include advertising, promotion, and employee expenses.
- Prioritise Features for Your MVP. Coming up with a great startup idea isn't just enough to skyrocket your tech company; rather, founders often fail because of their negligence towards better planning. ...
- Pre-sell your MVP. ...
- Source Talent with Equity. ...
- Acquire Customers.
They're especially helpful for quickly and inexpensively standing up web-based or mobile applications. But can a nontechnical founder use no-code tools to create an entire tech-based startup? Article continues after video. The answer is unequivocally yes.Where is the best place to start a tech company? ›
Silicon Valley/Bay Area, California
There is perhaps no more well-known startup city in the US than Silicon Valley. The Bay Area is the global epicenter for tech innovation and has been for decades. This area is home to some of the most iconic tech companies in the world, including Apple, Google, and Facebook.
What qualifies as a tech startup? ›
A tech startup is a company whose purpose is to bring technology products or services to market. These companies deliver new technology products or services or deliver existing technology products or services in new ways.What are the 3 main steps in approaching a startup? ›
- Ideation and business formation. This is considered the first step for an early-stage startup. ...
- Proof of concept. ...
- Scaling the business.
- There are three startup stages: early-stage, venture-funded (growth) stage and late stage.
- Moving from early-stage to venture-funded (growth) stage is well delineated, but other phases are only loosely defined.
Identifying a problem, understanding the need for a solution and its viability, and then launching services in the market are some crucial steps that a business owner must consider before embarking on the journey. Next comes the whole spectrum of fundraising, investments, expenditures and payments.What are the keys to startup success? ›
- Be passionate. Starting and maintaining a successful business is hard work. ...
- Test your concept. Intuition is good, but it's not enough. ...
- Leverage startup programs. ...
- Create a business plan. ...
- Hire wisely. ...
- Set goals. ...
- Have a well-defined niche. ...
- Be agile.