Presumably you have an idea with which you are considering to start a company. It’s going to be an incredibly challenging and exciting journey. Here are some points you may like to consider,
1. Idea might be good, but Evaluate if you can make it into a Sustainable Business
This is called market research, customer survey, business feasibility analysis. There are ways to approach this – maybe you are trying to create a completely new market segment that does not exist today. Probability of you succeeding is well below 1%. But it should not discourage you from trying. Here you must really get down to the details of the problem the new product / market segment will solve and how quickly you can get customers to use it / pay for it. Also other thing to consider is how quickly someone can copy your idea, can you constantly keep innovating or doing better with the quick on-boarding of customers. – or you are trying to get into an existing market but solving some real customer problems, or giving customer what they want on top of the current product offering. It might be in form of additional products, features, services, customizations etc. – But you do need to evaluate if you can really make it better and help your customers – Can you make the customer replace their current providers product and use your fully. is there an integration time / cost associated with it? are the benefits convincing enough for the customer to still chose for your product.
2. Create a Business Plan
This is very crucial. It helps you write down your thoughts and make them more concrete. It’s actually this plan which will help you decide to do the business or not, how much money you try to raise, and how you should approach the business execution. It should include formal statement of a set business goals, the reasons why they are believed to be attainable, and the plan for reaching those goals. It also contains background information about the organization or team attempting to reach those goals. It should also have an executive summary of 1-3 pages that summarizes all the thoughts around product, service USP, marketing, organization, competition, execution strategy, funding requirements, and subsequently the details on each section afterwards. Personally I worked on multiple ideas over time, and created 3 business plans, and only 3rd one seemed viable enough and I gave up on first 2 pretty early.
3. Listen, Listen and Listen
Get everyone’s feedback who can spare some time in discussing this idea with you. Especially those people who have proven experiences, and you respect them more. Don’t worry if you get negative feedback from some or most of people, just listen and don’t defend too much. You would possibly hear similar things while doing the business as well, so consider it as constructive feedback only and reject the opinions that you do not agree with.
4. Raise funding
Most important part of Founders’ job is to raise enough money so the business plan could be executed.
5. Team: It’s all about people. Get co-founder(s) in your team.
It’s important as you need somebody to take care of things when you are not around, as well as lead some parts of the company operations. Look for people you like, whom you know for a while, who have some complimentary skills, and who are very fascinated by the idea. Subsequently you would need to hire the rest of the team who would help build and deliver your organization to the customer. Please be careful in this part as the team is the most critical factors that can make or break a company.
Whatever the business plan, no matter how strong the team, one important factor in building a sustainable business is the ability of the leadership team to adapt as the market environment changes, more opportunities arise, threats appear, etc. For sure with time, the execution plan and the strategy of the startup would change … and probably as frequently as every quarter. Do not be afraid to do that. On the flip side, don’t change too much and everything as well, unless absolutely required. Pivoting is a concept sometimes used in startups who go into a tangential business strategy.
7. Be willing to fail
Running a startup could be the most educating experiences ever. It’s certainly better than all the theoretical education courses like MBAs etc. Odds are against you, most likely you would fail. But be willing to fail. Know your downside in the whole project (in terms of money invested, potential opportunity cost etc.). But the incredible learning upside is there for sure. And you might partially fail, may get some decent exit by selling off the company, IP, a product, or team etc.
Don’t worry about exit at this stage. Get started first. Multiple options like company sale to a competitor / client / larger player in the market, IPO, etc. are always there if you can build a good business. Good business is one that has decent team, good revenues, defensible products / services, solid scope for future growth, etc.