Think like a startup!

What is a start-up?

A start-up is a company in the earliest stages of getting established with the purpose to develop a unique product or service for which the founders believe there will be a high demand in the market. Innovation is at the root of the start-up, whether the innovation lies in the business model or the product/service. Having the validated product/service through trials and errors, start-ups enter scale-up stage with several funding rounds to rapidly growth and reach targeted audience at a rapid speed. This is a typical route that all start-ups come across.

Photo Source: Visual Capitalist.

The founding team:

The founding team is the heart of a start-up and is a crucial part of defining a successful start-up. The most important aspect of forming the team is understanding yourself (your strength and weakness). Working in the area you love would greatly facilitate the road to the success of your start-up. Additionally, you should crystallize your mission, vision, and values in a succinct way that is compelling to others. Knowing your weakness, you can find a co-founder who shares a similar vision and possesses knowledge in areas you are weak at. Moreover, having a co-founder who has experience and connections in the industry that your start-up is competing in can be a great advantage to kick-start your business. Pillar suggested a few methods to look for co-founders [3]:

  • Consider people who you’ve worked well within the past
  • Work your network (in-person or virtual)
  • Reach out to people you know/admire who have the skills you want
  • Reach out to potential stakeholders (a person working in the sector you want to join)
  • Tap into local university job boards
  • Reach out to graduate students
  • Join a Hackathon
  • Through a formal program (a program designed for co-founders to network and meet)

Minimum Viable Product (MVP)

“Minimum viable product” is a term coined by Frank Robinson and popularized by Eric Ries, founder of the Lean Startup methodology [4]. MVP is a development technique in which a product with the most basic features to meet the founders’ goal is introduced to customers to gather maximum feedback with the least effort. The product would be scaled up after sufficient feedback is received for future refinement.

Suggestions

Here are some suggestions to bring your product to market faster [6–7]:

  • Prioritization: There will be multiple ideas floating around but it is up to you to decide what is the core to focus on
  • Scheduling: Exam your workflow, analyze the bottleneck, and create a solid strategy
  • Goals: Set weekly goals (mini milestones) to reach
  • Resource Allocation: Plan ahead for budget spending and resources needed
  • Partner with smaller suppliers: Larger suppliers will not likely work closely with you and disruptive technology will likely come from smaller suppliers you’ve never heard of.
  • Cross-functional work team: The advantage of smaller companies is flexibility. Working in a small group can get information across faster and adjust the product immediately. Even when the number of people grow, a few small groups/departments with team leads and reoccurring weekly meeting can be a great way to divide up the tasks and push innovations.

Marketing

Marketing refers to activities a company undertakes to promote the buying or selling of a product or service. Marketing can be done by the start-ups themselves or by affiliates on behalf of the company (Investopedia) [8]. Marketing is an essential tool to introduce your brand/product to consumers. There is a wide range of techniques and methods to advertise for your product/service ranging from free of cost to paid service. Here are a few common methods [9–11]:

  • Website: Website holds multiple purposes. Firstly, a website can be used to quickly introduce your product and service. Secondly, it is an address that users can search for if they are curious about your brand and product. Finally, consumers can find more information and contact you through your website.
  • Email: Add a form to your website (or landing page) to collect email addresses from visitors, then start sharing updates about your services, contents, products, and anything else that might be of interest to them. It is best to use your company email to look more professional when communicating with customers.
  • Social Media: Facebook, Instagram, TikTok, and Twitter each have more than a billion users worldwide, which means potential customers are at your fingertips. You can target specific segments of people with ads for your startup.
  • Offline promotion: Brochure, business cards, postcards, and vouchers are sources for promotion.
  • Networking: Talking to different people and joining events in the industry that your product is developed for can be a great opportunity to introduce others to your products.
  • Brand ambassador: Finding a human representation of your brand. It can be a highly effective way to spread your organization’s message. For instance, endorsement from celebrities, professional personnel, or widely trusted people.
  • Channel marking: This is a practice of working with a third party to take your products/services to market. Often, channel partners are businesses in and of themselves. Hence, what you really have is multiple separate businesses selling your product. The key benefit of channel marketing is that your products can reach audiences that you would otherwise not have had access to. This method can be faster and more effective than traditional methods.

Funding

Initial funding of a start-up mainly is from the founders’ money (e.g their savings, family, friends, etc). Additionally, founders can borrow money to operate their business such as obtaining a line of credit or loans. For instance, the Business Development Bank of Canada (BDC) has multiple loans and financing programs for small businesses. There are also government grand and subsidiaries that can be available for certain businesses/industries. If manpower is needed, exploring volunteers and special need programs can be a viable option. Moreover, wage subsidiaries for university/college students are also a great program for employers to explore potential employees. Some subsidiaries cover up to 75 percent of the student wage, which means employers only need to pay $2,500 for every $10,000 paid salary. A lot more grants and subsidiaries are available to be further explored through the internet and networking.

  • You can speak to product/market fit (you may not have tested this, however)
  • You’re about to make your first few hires
  • You might not have a fully developed product or MVP, but you have something to show (an early prototype)
  • You have garnered some early interest from potential customers
  • You’ve developed a reasonable revenue model
  1. Financial knowledge: As a founder having financial knowledge becomes of utmost importance for you. You must know the process of dividing equity and have an accurate valuation of your business. And also, a thorough understanding of your income and expenditure. This is not only required to ensure your business does well but also to safeguard it. With your equity stake, there also comes decision-making power. If you are not well equipped with the number game, you might end up losing your decision-making power in your business. Additionally, CEO and employees’ salaries should be discussed with your investors prior to investment so that there is no discord post-funding. According to Kruze, CEO pay themselves on average $119,000 annually after raising seed financing (research is conducted with over 125 funded companies).
  2. Legal Knowledge: The process of seed fundraising will involve a lot of documents and there will be contracts. To get through all this unscratched, you would need legal knowledge and a good lawyer by your side.

Business and Operations

Here is a list of possible start-up costs (from nerdwallet) [15]:

Self Development

“I think it’s very difficult to start companies, it’s quite painful,” Elon Musk told students from Draper University [16]. The path might not be right for everyone. However, if you believe your ideas can help a lot of people and you enjoy solving challenging problems, it will be a great path for you to pursue. Self-development is an important aspect not only to yourself but also to the growth of the start-up. As Warren Buffet said: “By far the best investment you can make is in yourself.” [17]. Learning is a common theme among the founders. Learning to innovate, learning from feedback, and learning from mistakes are a few examples of why learning is so important. Continuously equipping yourself with more knowledge would greatly improve the success rate of your start-up. Here are a few ways to deal with challenging problems you have not solved or done before:

  • Internet: The Internet has great resources on all possible things you can think of. It is a great way to dive into any unfamiliar knowledge you want to know. Additionally, it is a great way to connect with people around the world.
  • Teammates: Talking to your colleagues and friends could get you some great ideas or possible directions to explore.
  • Connections/Network: This is a critical resource, especially for start-ups. Since start-up is at the initial stage, connections could help start-up solve all sorts of issues. For instance, with some connections, a company can outsource a component of the product/service at a reasonable price.
  • E-learning platforms: There are great amounts of online learning platforms that are available to entrepreneurs ranging from free of cost to paid service. For example, if you are banking with ATB Financial (Business) [18], you can enjoy their free entrepreneur courses. Harvest Builder also provides some free learning courses for new start-ups [19]. Plenty of courses is available online if you spend some time searching for them.
  • Mentoring/Training: Mostly mentoring and training will come with costs. Two worthy mentions are accelerators and incubators (see diagram below from Robbie Richards on MassChallenge) [20]. A start-up accelerator is an organization that offers mentorship, capital, and connections to investors and business partners. It’s designed for selected start-ups with promising MVPs and founders, as a way to rapidly scale growth. In contrast, incubators are companies that are primarily focused on early-stage start-ups and help entrepreneurs build their companies from the ground up [21]. They provide support to these start-ups by linking them to potential sources of funding; they provide coaching and mentoring, office space for them to work out of as well as access to legal counsels and networking opportunities.

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Saeed Zeinali

Saeed Zeinali

18 Followers

Healthcare, Business and Tech enthusiast. Passionate about arts, food, and road-running.