So, the fiscal year was just wrapped up and for people who have been holding their plans to launch their startups, this will be an apt time to carry them out.
We would like to ask a question though; is it easy to launch a startup? We are not doubting your capability or your vision or the idea you have been shaping till now. We know that your vision regarding your startup is strong.
You have imagined your product successfully selling on Amazon, Walmart and have also practiced the presentation while giving interviews explaining your competitive edge.
Where do you start for your startup launch? The first 90 days are the crucial time in your business’s life. Getting your early steps right helps you create a sound foundation for a profitable, growing business. Some questions that must cloud your mind while you plan the launch of your startup are:
- Do I set up Google Analytics for my website?
- Is my website showing up in search engine results?
- Am I correctly tracking business expenses?
- Have I set up social media accounts?
- Do I have a mailing list?
- Is my data regularly getting backed up?
These questions will not help you earn, well, not directly. However, having such information with you makes it easier to calculate the loss or expense that will go into burning the cash to keep your startup afloat, till suitable ROI is achieved.
If you are hoping to become a profitable startup, then you must hurry up its launch. The number of tasks is more crucial than the type of tasks entrepreneurs do in the early stage of the launch according to the Panel Study of Entrepreneurial Dynamics.
Entrepreneurs who implement startup activities faster are more likely to see profits,” says Paul Reynolds, coordinating principal investigator of the Panel Study
Your startup launch activities can be divided into two categories
- The first is the open-minded discovery. Be it finance, customers or go-to-market strategies, entrepreneurs base it all on assumptions.
- The only thing that they know or are certain about is their strengths. Such an experimental approach is generally found at the core of Lean Startup.
- You might say that Lean Startup backs up “effectual entrepreneurship,” which is a research-based approach where improvisation takes the driving seat when a startup is launched.
Social entrepreneurship is the use of startup companies and other entrepreneurs to develop, fund and implement solutions to social, cultural, or environmental issues. – Wikipedia
- Social entrepreneurship is the second type of startup activity.
- We are not saying that you have not lived with your startup idea for a long time. And now while launching your dream, you must not get way over your head.
- It may sound like we are preaching meditation, but you must stay calm and think about certain aspects of your venture.
- You must figure out you the target market upon which you will base your revenue and your resource capacity.
Now, how can an entrepreneur build its brand around professional and personal acquaintance? You will require a fundamental amount of inputs from your
- potential customers.
For any entrepreneur, having such constructive interactions with your entrepreneurial environment helps in bringing new perspectives to your enterprise; that’s networking for you.
Startup Launch Checklist
Working with startups and entrepreneurs, we have enlisted some crucial checklists here that will come in handy for you in launching a successful startup.
1. Know your customers – walk in your customers’ shoes
The idea behind minimum viable product is to get your offering as quickly as possible into the hands of customers to generate feedback. You must make sure you are solving the right problem. Market data and surveys don’t tell you that. You must get close to the customer experience possible for those crucial insights. Doing so before you commit to a solution saves lot of frustration. – Leigh Buchanan
- Know your customer. Just knowing does not suffice, you must find out about their wants, their profession, and how they feel about their profession.
- You must engage with the customers daily routine be it their life or work.
- This insight creates a master-apprentice relationship; and mind this, you are the apprentice!
- You must ask them (customers) to let you observe them.
- Ask open-ended questions about the experience and workflow.
Why is that necessary? Well, we are not asking you to do this by giving them your sympathy, however, keeping up with this practice helps you empathize with their life. If you do not understand their daily grind, how are you going to improve their life with your product or service?
This process also provides a practical understanding of their pain points and adds an emotional context, letting you see things through your prospects eyes. Interviewing them isn’t good enough. Being monotonous in some cases leaves people blind, leaving out the vital parts of their daily descriptions.
2. Define Your Business Concept
Any entrepreneur launches their business for executing an idea that seems to change the world for its betterment.
Businessmen spend the rest of their career refining their idea, however, there must be something at the core, or else you have nothing that needs refining. It is fine to create a cool new widget or app or website. Understanding what value your product brings to your target audience is much more important.
It helps you understand the market share of the customers who will be paying you money for recreating it. You must know what you’re doing, and why, because that’s your business concept.
Going out with “hammer on a nail hunt” attitude will not come in handy for an entrepreneur who wants to grow their startup.
3. Take maximum competitive advantage.
What are you bringing to the market that’s not already there? For any entrepreneur, it is the most critical question as the life of their startup depends on it. Take Huffingpost for example, they created a destination website where both well-known and lesser-known people come together and share their views on
- news of the day
- entertainment, and
- other aspects of life.
When they launched themselves, blogs were already present in the market but not widely accepted for expressing personal views and communicate any idea to the world, yet!
Huffingpost didn’t need a heavy content, all they wanted was real emotion from their senders.
4. Reality Check – Test your concept
Invest your time in getting some pre-feedback after creating your concept. Yes, you have a budding idea. Having it cross-checked with domain experts in that field will help you keep a reality check on it. After all, you are going to spend your resources on that idea for a certain period in the nearest future.
Why? Won’t they steal the idea? Or won’t they kill the idea with their facts and findings?
No, they won’t, what they will do is keep your idea under a strict reality check.
We believe that before setting your idea into motion it is good to find out if that same idea has been tried multiple times. If that idea has not borne any success for others then it will be good for you to find that out now, rather than after spending 3-4 crucial years of your life.
5. Get feedbacks – Find mentors.
In your early days’ as an entrepreneur, all you require is the guidance and help of an industry expert. These mentors help you stay on the track, compelling you in thinking beyond the survival of your business in the coming three years.
New founders seek copious feedback on their products or services. But getting the business itself right is just as critical. To do that, you should develop relationships with veteran entrepreneurs. Although it’s too early to be thinking about a board of advisers, setting up a kind of proto-board comprising folks who’ve been there and done that will help you head off mistakes. – L.B.
What your mentors basically do is look at the business model and idea from the perspective of a long-term, operating venture. The major challenge that every entrepreneur faces is the timing. The experts have too less time to guide so many startups.
Don’t cold-call famous people to ask for their advice. Take advantage of the variety of programs lined up by advisors who have offered to provide their feedback to startups.
- Entrepreneurship professors,
- Accelerator mentors,
- Successful serial entrepreneurs in pitch events,
- Angel investor group screening sessions, and
- VCs who hold office hours
Save up your questions and ask them all in a weekly or monthly conversation, so you don’t pester anyone. And when you do talk, don’t just talk about the business. This isn’t a transaction. It’s a relationship.”
6. The Entrepreneurial Ecosystem
When I began, I didn’t know anything about business. I was excited about starting Student magazine, and then we had the idea to use the publication to sell music, too. I didn’t create a formal business plan. That seemed really boring to me. I just thought about the excessive cost of records and the sort of people who bought Student; we believed we could sell cheap mail-order records through the magazine. We made enough money from mail-order to open a record shop. – Richard Branson
Entrepreneurs are like ivy league players, and in this market, coaches are considered their key to the ultimate success. We are not saying that you will not survive as a lone wolf but if you become part of an entrepreneurial ecosystem, you give yourself many more allies. Although it may seem that you are compromising your startup on multiple levels but embracing the ecosystem will eventually pay off.
- Attend meetups
- Apply to any accelerator program
- Pitch your business in various stages
- Participate in online forums
7. Get Your Name out in the market in a Creative manner
Give out certain gifts in cash or kind to get people on your side when they buy one unit of your product or sign up a membership with you.
Have the “one-month subscription option”, but make sure you match the cost of the plan and discount that you will be providing against the same. When you start out with your startup, you will have no Google ranking and no other influence on your target market.
You must find creative ways so that other people come to know about you through your current plans, customer base and results. Your current customers are your future ambassadors, and the way you keep them happy will decide your startups future.
8. Excite your Investors for your dream project.
Your investors’ hope is that this launch will be an exciting and profitable ride. Your role is to be the sober designated driver and bring everyone home safely.
When you pitch to early investors, some will get excited, so will say no for investing in “your dream”. You need to build a tactical conversation and you need to have a grasp on it. Develop a 12 or 18-month projection. Create a spreadsheet showing the USP that’s going to drive your business. Fun fact is they are not entirely depending on the forecasts you are promising to them, they are more interested in listening to the pitch because of “you”. They are betting their money on you!
When we started to raise money we were told no dozens and dozens of times. We were really focused on the specifics and trying to get every part of our story into the conversation. With early-stage fundraising, you’re lucky if you get 30 minutes with someone, and all five of us founders were talking about our expertise, our pricing strategy, the product we were going to build. We learned to take a step back and say, “What’s the vision we all share?” It was creating the world’s first sleep brand and changing the way people buy sleep products. You don’t need to tell your entire life story in an investor pitch. – Philip Krim, co-founder of Casper
9. Recruit the Top-Notch Team.
With the rise in the demand of your products or services, your business will also rise, and that means you’ll need help, professional help.
You will now face a new type of challenge. Why? Because the growth of your business solely depends upon the capacity of your new recruits. As the work volume increases you will require the help of professionals who were trained to handle such situations for businesses like you.
The inability of hiring training A+ employees is a challenge that many entrepreneurs aren’t fully equipped to handle in their first venture. Key things you should be looking for when bringing together your team, and how you should treat them once they’re on board.
- Make sure that your vision matches that of the recruits.
- Sell the company vision, work culture and benefits to the recruits. Make sure they understand the rewards and benefits of working with a startup.
- They are important for your venture, and they should feel the same. Sometimes startups go for hire and fire. This is not a good practice for the long run and will backfire on you.
- Every recruit is different and has something unique t offer to your startup, make sure they get the same type of bonus that matches their skill set.
10. Understand your Business Model
We are not saying it in a casual manner, but everyone prefers to be the leader of their own time, talent, and money.
It is the same as someone aspiring to become the best actor or winning the Oscars. The numero uno differentiator between an aspirant and a real founder is simple; an aspirant will be backing his product, but the founder will be backing hi business model.
Why such a differentiation?
A product or service can be innovative, useful, but it will turn into a viable business only if the cumulative value being created is significantly more than the cumulative value of the costs of business operations.
“Unicorn” a term used to describe a company with a market capitalization of over $1 billion.
Which entrepreneur doesn’t want their business to be scalable! How can an entrepreneur determine if the business idea will become a multi-billion-dollar unicorn in future? In general, there is a simple math equation that estimates basic viability by multiplying four factors:
Number of Prospects × Percentage of market share That Can be captured × Complete dollar amount of each sale × Percentage margin of profit – Total possible profit
As an entrepreneur, are you able to check all the four options? If yes, then you have a business idea that will be a unicorn. Your business idea is ideal to produce for a very large number of potential purchasers, be believably striking to a high percentage of prospects, generate sales with a high dollar value, and promise a high-profit margin.
The elements of your Business Model.
What is your motivation behind building a successful business? That is your business model.
- Your business model will create and deliver value to your customers. In doing so it will also create and deliver value to your as the owner of the business.
- Every successful business, no matter the scale, functions as per the business model.
- Large businesses have a couple of business models that they work on, simultaneously.
- Being a startup, you must understand that you must create and stick to a perfect business model for the initial few years.
As an entrepreneur, it is important for you to transform your business idea into a business model. It is useful for you, as it provides a brief idea to you about how you will create, deliver, and capture value to the customers.
Any sharp and value-driven business model has nine elements:
Segmentation of your Customer
Your business will be targeting and catering to specific, diverse groups of customers. They have been identified as the customers for whom your business will create value against the purchase they make.
You started with an idea of solving some sort of problem that customers were facing. Now you must base your business model on the same basis, how your business is solving problems, how it is creating value for your customers.
As a business how are you reaching out to your customers and delivering that value to them?
Are you reaching out to them using:
- direct online sales,
- retail distribution channels,
- Value Added Resellers,
- company-owned storefronts, or
- affiliate programs.
Developing bonds with your customers in more than a transactional manner is important. Customer Relationship management makes a lot of difference.
Nowadays, there are many CRM tools that are crafted to assist small and medium-sized business to scale and grow their sales by intuitively managing their sales department.
Interacting, managing, and retaining your present customers decides how far your startup will go.
How is your business generating an income from the value it offers to your current customers?
You need to determine the actual source of the influx of revenue.
Assets are needed for creating and delivering the value propositions to customers.
Physical assets such as buildings and machinery and human assets such as employees with departmental skill sets are needed for delivering those value propositions.
Activities are covered by the routine that you do as a business for making your business model work, like
Distributing (delivering products),
Making connections outside organizations with suppliers and partners to help your business model work.
The operational cost incurred by your business model to stay functional.
Your Scalable Startup Business
Success stories in the field of startup business are in abundance. But how do you decide if your business indeed is scalable or not? Three characteristics play together here that make your startup business model scalable:
Ability of Starting Small
Getting funds for your prestigious venture is a bit tough when you do not have a big bank balance or have a backing of a good financial institution.
An ideal startup is the one that can be started with minimal financial resources from its own early revenues or has little yet some part of the founder’s personal savings account.
Dropping the marginal costs over time
Your marginal costs must drop over time, so that each additional dollar of revenue costs less than the previous dollar.
This feature or characteristic is considered the core of your business scalability.
Amazon’s Kindle publishing business became scalable to Amazon once they sold out their first digital copy. Once that was done each additional copy became pure profit.
If you are planning the expansion of your barbershop, the second shop would cost you almost exactly as much as the first one.
No business is substantially scalable, achieving absolute zero in the cost related department is impossible. This is where relative scalability comes in, which means a startup needs to be scalable over a longer range than its competitors.
Scalability is built into your Business model
Subway currently has 45,000 sandwich store locations around the world; opening more than six new stores every day. That’s including the weekends!
It would have been impossible for them to carry on such an activity if they had to hire top-class chefs for every outlet.
Creating a scalable startup creates a difference. There are more startups that close after the initial boom than those who have tasted success. There are many who crashed and burned everything in the hopes of making it big in this competitive world.
You might have a noble cause behind creating your product or service. But if you do not generate enough revenue for keeping it afloat amongst the competition than you will have to say a painful goodbye to your dream project.
We will be back with more content on maintaining a scalable startup, till then we hope that this checklist will help you out in your successful startup launch.
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