When you start your business, you don’t need anything other than your brain and working through the following 5 steps. If there is anything unclear to you, use Google. Finding your own way is part of this exercise. You will do that for the next 10+ years – finding your own way. If you are not 100% if entrepreneurship is even the right thing for you, check out the 10 most relevant founders traits – and also here find your own way to get there or chose something else.
1) IDEA STAGE
You have an idea and you are excited about it. Often times young entrepreneurs would like to get a validation from some experienced entrepreneurs or investors. Validating your idea is a great first move. But instead of talking to other entrepreneurs or investors – talk to potential customers. Do that before you even invest time and resources in building prototypes. However, if you feel better to make sure your idea works, it is OK to invest in a prototype.CHECK LIST
1) Did you speak to at least 10 potential customers to verify that your idea is solving a real problem and providing a much-needed solution.
2) Use a presentation or document to share your idea
2) ASSEMBLE YOUR TEAM, FIND CO-FOUNDERS
Before you do anything other than writing down your idea, attract at least another co-founder. Our world is too complex to do everything alone. And more importantly, our world is moving too fast for a single human to start a successful business and grow it fast enough before others enter their space. None of the top investors will ever invest in a solopreneur, no matter how cool the idea is.If you are a business person, find the technical co-founder. If you are an engineer find a business co-founder. If you can’t attract another entrepreneur, consider your idea is either not good enough or your skills and personality is not well enough developed to attract others which will always be necessary as you need to attract talents, customers, business partners, investors and more. Only two engineers or two business people is no better than a solopreneur – it’s all about the diverse skill set on the business leader bench. Be committed to give your co-founders at least 20% of your company and stay away from being the dominating “main” owner.CHECK LIST
1) Do you already have a diverse founders team with business as well as subject matter expertise?
2) Did you make well documented arrangement between founders regarding the equity ownership distribution.
3) DEVELOP YOUR SOLUTION CONCEPT
You and your co-founder will now want to develop the whole concept of your company – together. This includes defining the problem you are solving or the need you are fulfilling. It determines who your target audience will be and what you are bringing to your market. Describe what’s unique about you and your solution and make some intense research who else is offering similar solutions. Research other potential companies in the US, all over Europe and Asia. Define what the SINGLE most important function of your business is. If you have a list of important features – select one. If that one is too weak, strengthen that feature instead of growing a list. If the unique aspect of your solution is that you offer a complete suite of features while other businesses deliver only parts of it, re-think your idea as there is almost always some missing aspect of your concept.
1) Do you have a written down business concept – not necessarily a fully blown business plan?
2) Have you selected your unique single most important functionality that you want to be known for one day?
4) MARKET VALIDATION
Now put together a short presentation deck with no more than 10 slides. Create a list of 50 individual people who are potential customers (people not companies). Then try to make an appointment to present your idea. When you meet them – we highly suggest to NOT argue with them – just listen super carefully. Make notes what they don’t like, did not understand, did not need, and what they liked. IMPORTANT: Ask what of their current problems you would solve. Ask if they would buy your solution and what they’d be willing to pay. Make sure you end up speaking with at least 23 relevant people who are interested in your solution. If you don’t have the 23, ask more people. Document each and every interview. You may notice that you do not need a product to do any of the above.CHECK LIST
1) Did you speak to at least 23 people who have been willing to explore your solution for their business or individual use and it at least ort of solves a problem they have?
2) Is the feedback motivating enough to begin investing serious time and resources to build a first prototype? If not go back to step 3.
5) BUSINESS MODEL
With all the feedback you received, you may now develop a concept how you will produce, market, sell, deliver and service the product. All overall: How are you going to make money and compete with others. Then ask yourself if there is any way to make the engagement between you and your customer especially attractive – more attractive than your competitors. Determine the cost of building your solution and the price you like to sell it for. Consider a margin for distribution channels if you are addressing a large market (B2B or B2C).CHECK LIST
1) Do you have a written down business model that includes a possible pricing, a concept how to bring it to market and how you service customers?
2) Do you have an idea how you will compete against similar solutions or educate customers about your solution that has no competition?
At this stage it makes sense to look for a successful entrepreneur as a mentor, an office in a co-working space and others to connect with. Too early to discuss with investors. Forget seeking for an investor to build the business. Find some capital and seek for investors when you are ready to grow the business from a few early customers to a real company.