Don't be afraid to validate your idea
Some of the founders I’ve met or worked with in the past believe that you should nurture your idea and keep it secret. This may make sense, but this is not the best approach for your new business. The first step you should take is to validate the business idea before anything else. To validate your business idea, you do not need a fancy website, a beautiful business card, time and money to invest to build your product or service, or to wait for an investment from a venture capitalist. To validate your idea, you need to leave your comfort zone and talk with people. First, define who will be your future customers; after that, go and talk with them, share your ideas, and ask for feedback to understand their behaviours and thoughts, and make sure you are resolving a real problem for them. Validation is one of the most important steps for all startups. Make sure there is a market for your business. According to Forbes, 42% of all startups fail because of lack of validation or no market need. Validation will help you save time and money, and will give you a better understanding of what exactly your customers are looking for. It is not possible to validate your idea if you keep it a secret.
How to build and maintain the right team?
No one can build a company alone — maybe you need a co-founder, but it’s ultimately about building the right team that will complement your strengths and will fill your gaps. Having a co-founder is not mandatory, but he or she may help you make the right decisions and can help define the company’s future. I recommend you ask someone who you want to work with, someone who you admire, someone who will help you achieve the company’s goals. Building the right team is challenging, and in the tech industry, it can be even harder because of the competition. Some startup founders believe that offering a percentage of the company is a good strategy. I agree; however, it is not sufficient. Equity-for-work is not a reward for making the company more valuable, especially over the long term, and a small percentage is not enough to keep your team motivated to do the work. After a couple of months working at your company without a salary, who will be loyal to you? Who will be responsible for paying their rent and bills? Your team should have a good salary. In case you do not have enough money to pay for a full-time position, hire them as freelancers to execute part of the project. Paying someone will be cheaper than the excessive wear you will face if you only offer a percentage because, most likely, your team will find other priorities.
Define the right MVP
Once you have validated your idea, found a good co-founder, and built the right team, it is time to execute your project. To do this appropriately, you have to spend time planning and defining the best way to build your product. It is normal to think about the entire problem, and how to resolve it in the best way possible, but it may cost a lot of time and money. The best strategy is to define your minimum viable product (MVP); Wikipedia defines an MVP as a “product with just enough features to satisfy early customers and to provide feedback for future product development.” It means that you need to plan, define, and set up the best strategy to build your product, and by investing as little money and time as possible. Ultimately, you need to solve the problem your customers are looking to have solved. Imagine, for example, the problem you found is related to transport. People need to go from point A to point B. What is the best way to resolve that problem? You may not have enough time or money to build a car, but you do have enough resources to build a skateboard: Is building a skateboard the best way to help people achieve their goals? No, it is not, but it is the cheapest way to resolve the problem with less time and less money. You will also validate their need to get from point A to point B, and will then be more confident to invest more resources into your product. However, you should try to stay close as possible to your original solution.
Lack of capital could be problem
A lack of capital is another problem. Maybe you asked for money from your family or friends, maybe you borrowed money from a bank, or maybe you invested your own money. In any case, you may not have enough money to build your MVP and to support your team until you have your first pilot on the market. I would recommend you find an investor that believes in you and your project. Most investors are looking for people with great soft skills, but who are also able to build the right product. Always be prepared to sell your idea. This means you need to build a pitch deck and be ready to answer different questions from possible investors.
Opening a new business is not an easy thing to do. Understanding your customers, finding the right co-founder, choosing the right business opportunity, finding a good name for your company, and building the team that can execute on your idea are the first few steps that every CEO has to go through. Perhaps most importantly, focus your energy on building a frictionless experience for your customers. If you follow my recommendations in this article, I believe you are that much closer to being the next successful startup founder. You know how to understand your customers and you have enough knowledge about your business. Let’s start.
Aurelio Arantes started off his career covering every step in the product design process in 2005. The products and experiences he has built derive from valuable business opportunities to fully explore the balance between user needs and business strategies.
TribalScale is a global innovation firm that helps enterprises adapt and thrive in the digital era. We transform teams and processes, build best-in-class digital products, and create disruptive startups. Learn more about us on our website. Connect with us on Twitter, LinkedIn & Facebook!