Even if you have a great idea, it can be difficult to implement it. Every startup is a researcher who is looking for his working business model. We tell you what steps you should take to start a business
Table of Contents
What is a startup
According to entrepreneurs Steve Blank, Eric Rees, and Paul Graham, a startup is a temporary organization created to find a scalable and profitable business model in an environment of limited resources and extreme uncertainty in order to grow rapidly.
If we draw an analogy with the life cycle of a person, a startup is characterized by stages of birth and growth, characterized by a high degree of uncertainty. Experiments and hypotheses are tested, mistakes and reversals happen, there is a constant search for something new – from improving the product / service itself to choosing a business model. It is especially important for an entrepreneur at this time to act proactively: to form a vision for their product, to look for new opportunities that create value for others. At the same time, to be not just a researcher, but an ideological inspirer capable of leading a team.
Launching a startup from scratch
Step 1. Start with yourself
Given that building a startup is a long journey, in about 5-7 years, you will have to go on your own. What does it mean? You need an idea that you personally believe in, that drives you. Start by identifying a problem that already exists in your immediate vicinity: someone from your friends, acquaintances, colleagues, clients faced it. For example, this year my MOOVE students identified the following problems: lack of motivation to learn languages and go in for sports (the Nemen and HealthyBet startup teams took care of them), the difficulty of choosing clothes on the Internet (Yovo startup), high staff turnover (Smartboarding startup).
Look for an idea that excites you in an area where you have expertise. If there is no such idea, but only the desire to be financially successful, the startup model will not suit you. I advise you to give preference, for example, to a franchise with an established business model.
Step 2. Formulate a vision
Describe your idea using proven tools – I recommend using Ash Maurya’s Lean Canvas. Your task at this stage is to formulate a vision of the idea in a format understandable to any person through the key blocks.
Step 3. Test Your Idea
Once you have described the idea by developing the vision, you need to identify the key constraints to its implementation. The best way to do this is through expert interviews and competitive analysis. You need answers to the following questions:
- Does the market need your solution?
- Are you able to implement it technologically?
- Will it generate income in the long run?
Step 4. Build a business model
Continuous improvement of the product, taking into account the wishes of the client, is what lies at the heart of the Lean StartUp methodology. That is what I recommend to apply at this stage. The procedure is as follows: create the simplest possible product, get feedback from the target audience, improve the product, get feedback again, study the data received and go back for revision. There can be many such iterations – it is important not to stop and look for the very product that will meet all the needs of customers.
The Lean StartUp approach is different from the classic one. Classic implies that first a product is created, then a demo, and only then sales start (Build-Demo-Sell). According to Lean StartUp, the order is different: first we make a demo of the product, we immediately look for customers for it, and only then we finalize the real product (Demo-Sell-Build).
Step 5. Create an MVP
MVP – Minimum Viable Product. This is the earliest version of the product: it is already functioning, it can already be presented to customers and the first “manual” sales can be launched. At this stage, the product can be assembled by the team on their own, for example, in the form of a chat bot or a simple application. The actual goal at this stage is to make sure that the product works and solves the identified problem. Only after that you can proceed to the stage of final product development. On our program, this usually happens about three months after the start of work. The dynamics are different for everyone – the terms are usually longer for those who deal with complex products for the b2b market. We teach how to build a real business, so we do not strive for teams to create “at least some” MVP. If it turns out that the idea does not work, you can start over with another product.
To do this, you can use low-code platforms, constructors, and services: for quick assembly of mobile applications – Glide, Adalo, FlutterFlow, for chatbots – BotFather, Integromat, ChatForma, AirTable, for web applications – Tilda, AirTable, Integromat, Collabza. There are many open-source materials available on the subject of low-code.
Step 6. Find a partner
The search for a co-founder, a co-founder of a startup, usually goes in parallel with the rest of the steps. The composition with three meta-roles is considered optimal:
- Entrepreneur: sees market opportunities, leads both the team and, most importantly, investors. By the way, if you want to make money quickly, you can do it with the help of betting on the 22Bet Uganda platform.
- Technologist: creates a solution/technology that will close the customer’s problem.
- Organizer: builds processes inside, sets and implements goals, controls the P&L plan (from the English. Profit and Loss, a report on income and expenses).
This is an ideal picture for a startup – in reality, one person most often combines two roles at once. But to combine all three is already physically impossible. You need to understand which of the profiles you can close yourself, and for which role you need to find a person with suitable competencies. It is important that he is involved, and reliable, and that your values match. It should be comfortable for you to conduct joint activities – for example, in order for students to get to know each other and unite in teams, we hold various events: speed dating, networking, and entrepreneurial game, solving cases in groups, and we also advise them to meet and have free time. This allows you to get to know each other better and form teams more consciously.
Be prepared for the fact that the original idea will not be preserved in its original form: it will be transformed many times, and most likely you will go through a certain number of “turns”. A pivot is a significant change in one or more elements of the business model in order to achieve planned performance indicators. These can be changes in any of the points of the business model: the value proposition, the technology itself, the operating model, the go-to-market strategy (channels), or the monetization scheme. This is the essence of a startup – the constant search for a new solution, the search for its own business model, reversals within it.