5 Things Every Aspiring Startup Must Do Right Now
Doing your very own thing represents freedom.
Whether it’s financial freedom, freedom from answering to a boss, freedom to build something your way, it’s easy to see how taking control of your life is the ultimate blessing.
By definition, startups are businesses that have limited resources and must fast-track to bring the product to market. The premise is simple. Pick a market, build a product and try to monetize as quickly as possible. If you’re successful, you’ll get more customers and money will start pouring in. That magic point where it all happens is called traction.
Is there a difference between the startup lifestyle and the entrepreneurial one?
While we’re constantly being told otherwise, I don’t think there is. Whether or not you’re going to succeed in your startup depends on your entrepreneurial spirit. It doesn’t end there, of course, as you also require that ideal mixture of expertise, smarts and being in the right place at the right time.
While many blogs talk about target audiences, hiring talent and securing funding, few of them touch on the less-obvious personal qualities that are vital to would-be entrepreneurs.
In this post, we’ll list some of the things you need to understand before you embark on the roller coaster known as building a startup. It may just help keep your expectations in check, avoid heartbreak and who knows – maybe even save your future business.
Focus on delivering value
Do you buy a new shirt every weekend or when your old one starts ripping at the seams? Do you actually deliberate buying a new jacket or a new toaster? Many of us don’t think twice and buy what we need – doing a cost/benefit analysis on everyday purchases just seems silly.
Yet starting – and sustaining – a startup goes against these principles. Now you have to dig into your savings, justify every penny spent and remain flexible enough to pivot when customer feedback warrants it. Since venture capitalists tend to invest in way later stages of a company, startups have little alternative other than to make do with what they have.
Thanks to the on-demand sharing economy democratizing lodging (through services such as AirBnB) and transportation (such as Uber), it’s easy to “rent” what you need at that point in time instead of tying yourself up financially. It’s also easier than ever to make use of free resources available to startups.
Learn to do everything with nothing
A startup is the definition of efficiency – more so than your traditional “mom and pop” business. It means optimizing the use of your time, money and human resources. Sometimes it means going cold turkey and eliminating money-draining aspects from the equation. You could even call it minimalism.
Some think that minimalism is an antidote to the pervasive consumer culture. Others believe that it only suits nomadic travelers with internet businesses. Yet minimalism is more than just a lifestyle choice. It’s a line of thought that questions spending money on something that brings questionable value, today or in the future.
It’s one of the more difficult concepts to grasp because we’re expected to get an education, finance an expensive car or buy that house with a white picket fence. That same notion of a 20-something startup founder who cashed out a billionaire tells us that we must seek out venture capital to get ahead. This brings me to my next point…
Understand how investors make money
If you’ve ever tried to pitch your startup to a panel of investors, you may have thought that you’re not getting a very good deal. That’s because you’re not. And if you’re not located in startup-friendly areas such as New York, San Francisco or Berlin you may even have trouble getting this far.
Besides, in many of these tech hubs startups are expected to aggressively look for venture capital once they get anything resembling a business. A half-baked product, a small following or something else that shows some potential.
If you’re a venture capitalist, you see this from a different perspective. VCs know that not every startup will succeed, so aside from rejecting 99.95% of startups that come their way, they’ve also perfected ways of minimizing their risk. They need at least one startup out of ten to “launch” (go public or get acquired) to recoup their losses. Meaning whatever happens to your startup, they’ll still come out on top.
Build the audience before the product
Startups are a lot of work. You need to decide on branding, build a website, look for partners. You’ll need to register your c-corp, seek tax assistance and constantly be on the lookout for funding. All this takes away from what you should spend the majority of your time on: building, showcasing and perfecting your product.
A business should make money now. Building an audience and developing your idea needs to be done hand-in-hand and with minimal financial input. This will allow you to create a prototype, product or service you know your audience needs and is willing to pay for. Voila! You’ve got your first engaged customers without needing to look for them.
The idea is to start offering something of value as early as possible. If you’re authoritative on a particular subject, write about it. If you’re an avid traveler or foodie, offer cheap itineraries or niche restaurant suggestions. This way, you’re uncovering hidden markets while being nimble and free to control your resources to your advantage.
How will you make the world a better place?
At the end of the day, we’re all customers. At one point or another we’ll run into a particular problem and start searching for a solution. And since there is more than one way to skin a cat, the solution we discover might not be appropriate for us. If there are many people with this type of problem, they may be willing to pay money in order get this problem solved to their liking.
In the land of entrepreneurship, you’ll only reach these conclusions with trial and error. Part of this means taking off rose-colored glasses and periodically re-evaluate what opportunities lie before you.
So while you may not be a 20-something year old startup billionaire, you’re building a brand, an audience and silently becoming the master of your fate, the captain of your soul.
It’s still better than the alternative: either crashing and burning – or building something that might not even cover your monthly electricity bills.