7 Steps to Successfully Launching a Startup
Have you always wanted to start your own business? Or maybe you are already an entrepreneur but you have a new idea! The most successful startups follow a series of steps that take them from idea to revenue, so read on and learn about the different stages involved in launching a successful business. Each stage is important and if you want to ensure success, don’t skip any!
Step 1 is about the prep stage. No one just starts a business. There is a lot of learning involved about how to think like an entrepreneur and how to use that way of thinking to build your venture. The more preparation you do, the more you are likely to avoid the pitfalls that undermine the success of many startups.
Step 2 is all about finding a problem worth solving. You many think you have a great business idea, but if you aren’t focussed on the customer, your idea won’t go anywhere. The most important step in starting a business is identifying a customer group and finding out which problems they need to solve. If you look at your own life, you probably belong to a lot of different groups. Are you the child of an aging parent? A musician? A tennis player? If you talk to the people in each of the groups you belong to about what makes them crazy; what problem they wish they had a solution to; what is the bain of their existence in this group, you will likely see some opportunities for a new business. These aren’t all potential business ideas though; some are just not solvable. The others, though, could help you define the problem statement that your startup will address.
Step 3 is about finding a solution. Now that you have some customer segments and bunch of problems they face, you need to evaluate whether those problems have a solution. Are the customers already solving the problem in a sub-optimal way? Do they even know they have the problem? Is it such a pain in the butt that they would pay you good money to have a solution? Is the reason that there is currently no solution that there really isn’t a way to fix it? All of these are questions that need answering. If people don’t care enough about the problem to pay to fix it, move on! This is not your business idea. If they do care, and would pay, why should they pay you for your idea? One thing to remember is that your idea has to be a lot better than what is currently available. Not just a little better either…it has to be 10X better, faster, smaller, easier, cheaper for people to come to you over any other alternative. If you’ve got that, you’re on your way!
Step 4 is about actually setting up your business. An idea is not a business. A business has to have a trademarkable name, a URL and email addresses, a bank account, payment systems, a landing page, social media profiles, key success metrics, and more. You’ll need a tagline, basic branding, an explainer video, and web analytics too! There are a lot of little steps, and having a checklist of all the things that make an idea a business will help ensure you don’t miss anything vital. It is important to figure all this stuff out at the beginning as once you are up and running, you’ll need them and you won’t have time to do it then.
Step 5 focuses on developing the minimum viable product. In the old days, entrepreneurs didn’t launch until they had a perfect product. These days, the Lean Canvas is the most widely used Business Planning model. It is all about the Minimum Viable Product which is a basic prototype that has just the key features of your proposed product. You use the MVP to test and test and test again. It gets you in front of customers and lets them interact with the concept so that they can give feedback. It lets you iterate based on that feedback so you can test again and iterate again until you get to something that has legs. The MVP should be something that customers will want to pay for, should be usable, should create value, and should be something you can actually build. So the process is ideate, iterate, validate and automate.
In Step 6, you’re going to develop the market. You’ve got a product that has been validated by some of your potential customers and you’ve figured out how to build it. Now it’s time to start selling it. Do you know how to find sales channels and test them to see which are effective? Do you actually know how to tell if they’re effective if you don’t know what key performance indicators to use? Maybe they sell a lot, but they’re so expensive that they eat up all of your margin. Maybe they don’t sell a lot but they cost zero time and energy and you can have this channel running in the background while you find better channels. You’ll need to gain early traction and figure out how to scale.
Step 7 is when you scale up, if you can. To be scalable, it means that your business can grow without compromising quality, or performance or the financial health of your business. Some ventures are not really scalable. Is that ok with you? Maybe a small business is what you’re looking for. But if you want something that can really grow, you’re going to have to figure out how to get there. Will it need more talent, more capital? If yes, how much more? Do you have any idea where you’re going to get them? There are a bunch of different places to raise capital. You can self-fund, at least for a while, by mortgaging your house or taking out a loan. You can try to raise capital from friends and family. Or, you can look to the investor market and see if you can interest them. You’ll need financial models, a pitch deck, plans to scale and lots more.
A lot of small businesses fail, but most of them do so because they haven’t given enough thought to all of these steps. They don’t think about the customer; they don’t test; they don’t get feedback and iterate; they don’t set up the administrative elements til they need them, and then they miss something important; they don’t develop the market and sales channels; they don’t have metrics and performance indicators to tell them what’s working and what’s not; they run out of money or talent and they have no idea how to get more. If you’ve gone through all of these steps, then you’ve probably got a business that is in for the long term. Congratulations. Pat yourself on the back and then put your head back down and keep on truckin’!
If you need some guidance on how to start a startup by following the stages discussed here, I recommend signing up for 100 Steps 2 Startup. It will take you through all the steps in more detail, using videos and worksheets. It’s like having a mentor guide you through your Startup process. I’m not involved in this course but I know some of the co-founders and I respect their work.