Did you know that not every new business can be called a startup? To receive such a title, a project must have two important characteristics: innovativeness and scalability. Based on this, a startup is a business that acts as an innovator in the market and tests untested solutions (new technologies, products, services) while having growth potential.
Although each startup is unique, there is one thing in common — a phased development from idea to scale. We offer 11 steps for the success of a startup.
Step 1: Find “your” idea
A startup can be called a business experiment based on a unique idea. And finding it can be harder than implementing it. To generate an idea that will work for you, you need the right approach:
- Choose a direction where your interests, expertise, and knowledge intersect. It is important that you want to engage in this activity and understand the basic aspects.
- Analyze what moments in this direction do not suit you that you are ready to complete their elimination on your own. It would be best to focus on problems that have not yet been solved.
You should have your own vision of the situation and the further path of the idea. Yes, according to the founders of Airbnb, initially, they did not have a common vision of the business, as they were focused on design and engineering.
Thanks to the unique concept of rental housing, the company managed to create a new niche almost from scratch. However, this is the exception rather than the rule.
It is better to form a clear vision of the project at an early stage and agree on it with the partner. And only after this is it worth moving on to testing the idea.
Step 2: Study the market and test the idea
According to statistics, only 1 out of 10 startups achieves the goal. And most often, failures are because the company offers a product that is not interesting to the audience.
No matter how innovative your idea is, this does not guarantee its relevance in the market. That’s why niche analysis is one of the valuable startup stages, without which it is impossible to do.
You can make sure that your idea has prospects in the current conditions using the following methods:
- PEST. This study covers a range of external factors that affect business competitiveness and the business environment. Analysis of 4 areas: political (situation in the country/region/at the international level), economic (interest rates, exchange rates, supply/demand), social (demography, culture, lifestyle), and technological (trends, government support for innovation).
- SWOT. The analysis aims to identify factors of both external and internal environment, which helps assess the ability of a startup to overcome difficulties. It refers to its strengths, vulnerabilities, weaknesses, external incentives for promotion (e.g., strong partnerships), and potential problems.
- Five Forces. The purpose of the method is to study the situation in the industry in-depth and draw up a business strategy based on the data obtained. Forces here are understood as factors that contribute to the formation of any market. As part of this analysis, the level of such threats is determined: the emergence of substitute products and alternative services; entry of new players into the market; the influence of suppliers; consumer influence; competitive fight.
In addition, you can conduct sociological research among target consumers (focus groups). With the help of social media analysis and surveys, you will find out what people think about your idea and whether they are interested in such an offer. Together, these methods will give the desired result.
Step 3: Take care of the security of the idea
It is one of the mandatory stages of startup development when there is no third-party support (public, government, financial) and the idea is not immune from reuse. In this case, you should proceed carefully and use reliable legal ways to protect the concept:
- NDA: creating a safe environment for the dissemination of information. When concluding a contract with a contractor, fixing all the nuances associated with data exchange and reuse is necessary. The NDA restricts access to such data to third parties.
- Patent: protection of the technical component. It also applies to ideas, algorithms, methods of implementation. You get the opportunity to make any decisions regarding the product: produce, sell, use. No one but you can legally manipulate the object. For 20 years, you become a monopolist.
- Trademarks: Prevent copying of your product name, logo, company slogan. For this, distinctive symbols are used: ® registered, ™ not registered (this symbol is chosen for new products and when applying for registration).
There is another way to secure your IP, only it is not related to the idea itself, but its results, for example, with the source code or UI elements. We are talking about copyright, which concerns the developed software.
The author retains this right for life (+70 years) or may pass to a third party. If the product is developed for hire, the term is 95 years (from publication) or 120 years (from creation). In any case, you need a whole team to create a successful IT startup.
Step 4: Form a team
One of the essential development phases for a startup is choosing the people who will work on your project. You have two options: find remote freelancers or hire full-time employees.
In the first case, you will have to organize all processes online, establish remote relationships and control each stage. In the second case, you will need to register your company, rent premises, create working conditions, and pay salaries and taxes regularly. A full-time team is more expensive but more reliable since everything happens before your eyes.
There is a third option: you can agree with a company that provides its team for the project’s development, deployment, and support. The advantage of this approach is that work processes and communications are already organized, and therefore you do not need to delve into each stage yourself.
Step 5: Create a Business Plan
Once you have outlined your idea and confirmed it works, you need to draw up a business development plan. In short, it is a detailed description of your project with all the calculations and prospects for the coming years. It is usually written 3-5 years ahead, although sometimes it is advisable to take a year since market conditions change at the speed of light.
Essential points of the business plan:
- the goal of the project, for example, to make a profit of 50 thousand dollars in 1 year;
- target market and problems that the product will solve;
- the first steps to promote the product on the market;
- marketing budget and other types of expenses;
- a reserve fund to cover unforeseen costs;
- strategy for responding to market changes;
- profit raising and scaling forecasts.
Such a plan is needed not only by you as the project’s creator but also by your team members, investors, partners, intermediaries, banking organizations to which you will apply for a loan. One of the main tasks is to convince potential investors and partners that the project is interesting from an investment point of view and will pay back all the effort and money invested.
Step 6: Get Funding
More often than not, the startup has limited funds for product development, which makes fundraising one of the main stages. Your task is to demonstrate to potential investors that your idea has the right to life.
To increase the chances of success, we recommend preparing:
- create a detailed technical document with ideas, methods for achieving it, demand forecasting, strategic plans;
- talk about the concept of the product (project, service) in a concise but meaningful form (elevator pitch);
- a demo presentation that clearly shows how a startup works and explains all the technical nuances.
There are many ways to find investors, and crowdfunding is one of the most straightforward and reliable. You need to agree with an investment platform (IndieGoGo, Kickstarter, etc.), provide all the necessary documents, and present the project.
Specialists will help draw up an offer for investors and prescribe the terms, the minimum and maximum amount of the fee, and the conditions for applying and terminating digital rights.
Step 7: Hire a Vendor
As we said earlier, you can hire full-stack developers, which saves you the hassle of building your own IT department. You will employ only those specialists who will manage the main business processes and entrust the development to professionals by outsourcing tasks.
The main thing is that the team has experience in your niche and can confirm their knowledge and skills with the help of a portfolio. It is also vital that the outsourcer signs an NDA before work begins and can offer customized pricing terms. It is the last organizational stage, and an exciting creative process begins.
Not to brag, but one of the best options on the market is Glorium Technologies. If we correspond to your niche, contact us.
Step 8: Create a Prototype
Is the team ready to bring your idea to life? A prototype will help solve the problem, which will translate all your wishes and requirements into the language of developers.
In IT, such a model explains the position and behavior of key program elements. The concept of navigation, design, and functionality is worked out at this stage, and user stories are created.
For you, as a customer, this is an opportunity to reduce the risk of mismatch between expectations and reality. For developers, to determine the scope, timing, and cost of work and prepare for work on the product’s first version.
Step 9: Create an MVP
Understanding the concept of how a product works becomes the foundation for creating its initial version with priority features. According to this, you should invest only in the functions in demand, MVP under the LEAN methodology.
At this stage, the audience uses the functionality and leaves feedback on its convenience. Improvements are being made until a balance of all users’ interfaces is found between convenience and attractiveness.
Step 10: Test and Run
The finished product should be error-free, and you need to make sure of this before launch. If you cooperate with an outsourcer, you will receive a range of manual and automated testing services. After fixing the bugs, your solution is ready for deployment.
If this is an application, we are talking about publishing in stores such as Google Play and App Store. At the same time, it is advisable to launch a marketing campaign to attract the first customers and additional investments for development.
Take It to the next level!
So, when your idea is implemented and presented to the audience, it’s time to think about scaling. Take a business plan and create a localization strategy to make yourself known in foreign markets.
Analyze user preferences and refine the functional part of the product and marketing strategy according to them. Remember that you need to constantly adapt to the market and target users to be in trend.