Contxto – The startup ecosystem is exciting and has been quite busy of late. Behind each new acquisition, investment round, or IPO—Initial Public Offering—is a painful process of investigation, data analysis, and implementation. But, how to start a startup from scratch?
Don’t panic just yet. If you can’t hire a professional with experience in assembling this entire process, you can start a startup yourself. Bootstrapped startups are there to keep me from lying.
The process of placing a new product or service on the market is a long and difficult one, but we have divided it into 6 easy steps for you. This will help you understand the development process and give you an idea of what is involved in launching a new product.
So, let’s do it! I’m excited. Are you?
How to start a startup in 6 steps:
1. Idea Generation
2. Idea Validation & Research
3. Prototype Development—The Dreaded MVP
4. Test Marketing/Launch Strategy Development & Execution
5. Product Launch
6. Product Support & Improvement (aftersales and more)
1. Idea Generation
The first step in the development of a new product or service is to introduce the concept to yourself. See if it makes sense. It may be an idea that you had. It may be someone else’s. The goal here is to define where you can do better than the competition.
Many entrepreneurs seek out a field where their pain-points are solved by their idea or in a subject in which they have prior knowledge.
The more knowledge you have about a niche, the less basic research you’ll have to do. But do not forget that even if you have an amazing knowledge about something, you must validate it through further research.
If you listen to the market you’re trying to reach, you’ve probably come across many ideas from the community, including your own.
You should also consider brainstorming with your team, friends, family, or even like-minded members of the community to see what they can add to your idea.
Keep in mind that most great products are simple solutions to everyday problems. An application that links a user and a driver. Have you ever thought of something like that? It would probably be worth billions of dollars, hehe.
Rappi came up with a solution that already existed in other apps, such as iFood, but it added the delivery option from companies that usually wouldn’t be on the application—basically every non-restaurant store—. Before Rappi, you had to get that stuff yourself.
2. Idea Validation & Research
Okay. So you have a good idea. But does it make sense?
Some points to keep in mind when validating your idea.
Each of the topics below could be their own post, so if you have any questions or want us to go further in any of them, do not forget to send us a message.
Define Your Target Audience
To define your audience, I suggest you to answer the following questions:
Who will buy it? If you intend to sell a service/product, knowing who will benefit and who will pay for it are important aspects to keep in mind when entering step 4 (Test Marketing/Launch Strategy Development & Execution)
How much will they pay for it? Pricing your product/service is as complex a challenge as creating it. To know the price, you must know the execution price (man/hour) and inputs (raw-material.)
How big is this market? Since you now know the sales price, check your competition to compare the prices and features offered. Always do your research.
Can I make money from this idea? Although it seems obvious, many businesses miscalculate their profitability and, among other reasons, fail. So after looking at the prices on the market, it is possible to know if you can compete with them.
Know your competition and offer something different
This topic is a little less complex. Although copy-cats do well in general, the exclusive condition for them to work is that they offer a service that differs from the existing one. Whether with interface, functionality, customer service, or pricing.
What advantages do you bring?
Take Evernote, for instance. It is considered the major tool for not forgetting anything, writing everything we think about when we are away from the office, or creating a new project.
One might feel intimidated by creating a competing solution. But that didn’t stop Notion’s team from bringing a tool as powerful as Evernote and with some free features for teams and page publishing options.
But, beware! Always make sure you are not replicating an existing solution without knowing it.
Do your homework. Some people buy generic products, but this is how they become known: More basic and cheaper versions of other products.
3. Prototype Development (MVP)
Once your research has confirmed the potential demand for your product and there are no legal obstacles to its development, it’s time to build your MVP—Minimum Viable Product.
An MVP is, basically, a functional model of your final product. It doesn’t have to look like the final version—just to be as close as possible.
I won’t go on because we’ve got an outstanding post in partnership with the guys from Rionic about creating a top MVP here.
4. Test Marketing/Launch Strategy—Development & Execution
Once all of the previous steps have been completed and everything looks good so far, it’s time to structure your sales and launch strategy. The steps and decisions you take from here will help you present your project to an investor or accelerator program.
Now, we need to make some decisions. Some points are important even before you have your MVP. There is no right order to apply them, but all must be taken into account when producing your strategy.
Draw up an understandable strategic plan
Much of your hard work is to show your team what the plan is all about.
Putting together a simple strategy will be the difference between good and bad execution. Often plans can go wrong if those who are going to perform a certain task believe they know the direction they should go when in fact they don’t.
So besides putting a plan together that is simple and easy to read/execute, make sure that all parties understand, especially with weekly/fortnightly meetings, but that’s another post.
Elaborating your strategic plan is also useful for you to understand your business model and reformulate aspects that may be off-axis.
Create guidelines for the brand’s voice
Yes, it can all seem way ahead now. But it is not. The better prepared you are in all aspects while setting up your business, the greater are the chances of not entering the failed startup statistics.
It is crucial that all of your communication channels are aligned and that you understand the company’s voice, its opinions, market view, social view, among others. Make it clear which subjects are interesting and which are not. What are its natural allies based on this voice; is it Amazon or Algramo?
A company that speaks with the same voice in all its channels, is a company that will captivate its users, creating a robust and faithful base. Like Platzi’s Twitter, for example.
What we should keep in mind when creating our company’s voice guidelines is the tone. Your voice should reflect your mission, values, and history.
Remember: Your company’s tone and voice will not only be related to advertising content and social media. It also has to do with your HR, how it communicates with other companies and digital influencers. Implementing the guidelines must start from the top and include all sectors. Consistency is king.
5. Product Launch
The methods shown so far will strengthen the launch of your project, but good execution is essential.
If planned correctly, consistently, and quickly, the results should be compared with those expected in the planning. Something that I like to think about in a launch is “to fail quickly.”
Observe what doesn’t work and change it. And always keep KPIs—Key Performance Indicator—in mind, you’ll never know if you’re succeeding or failing without the hard data behind.
Keep your entire team involved at this stage, regardless of the industry. A united team will bring more sharing and engagement on the networks and will determine your project’s success…
A simple way to gather information about your target audience before the actual launch is to bring their interest to you. Your project must be exposed to potential customers, right?
So bringing together people interested in your solution and making a beta version available, closed or open, will allow you to have sincere and direct feedback on any existing problems.
This step should be taken whenever possible.
There are many options to put this plan into practice, such as a free version and pre-sale discounts.
I still remember the name of the company that saw a post of mine on Twitter and offered me a free premium subscription month. Better than remembering, I became a subscriber to this day.
Learn everything about your audience
It is important to keep in mind who you are dealing with. Preferably, this information should be defined from the beginning of your solution’s development.
Know your audience. What they like. How they like it. Where they are. How much they usually spend on the service or product you offer. These are important pillars for getting to know your customer and how to reach them.
Talk to your customers, not at them. As interesting as you find yourself and your brand, your customer will not if you always talk about what you are doing, selling, offering…, but never asking about what they like, want, think, and feel.
Good communication with your potential customers will make them talk about their pain points, and a mutual understanding should arise and converge in the purchase/use of whatever you are offering.
Understand your customers’ purchase journey
Even if you are going to hire a marketing agency, you must know the buying journey’s fundamental aspects. An exercise that can help a lot on this specific topic is to try to reach your competitors by searching for low-value keywords, through social networks and research forums.
If you are interested in knowing more about the customer journey, send us a message to show interest and we will put it on our list.
6. Product Support & Improvement (Post-sale)
After-sales is a process that goes beyond launch, but essential for growth. The difference between a product taking off or not must be understood in the planning phase.
Once sales/subscriptions begin, you need to be prepared to continue supporting and improving your product. You’ll want to make sure you keep listening to your customers while they use the product to make the adjustments. This will ensure that they remain happy with your solution and spread it out to more people.
Each type of service or product must have an agile communication service with its client, both on social networks and by other means—e-mail, direct message, telephone. The strategies here differ according to the project. Doing it together with a marketing professional will be a differentiator.
The steps don’t stop! Keep at it!
Launching a startup is difficult; we know. The steps described here are not entirely linear. Rather, they work cyclically.
Be prepared for everything. You will make mistakes no matter what you do. But, if you’re smart, you’ll learn from them quickly.
Be honest with yourself. Some ideas just don’t materialize. Consider having to go through these stages more than once.
There is no shame in starting over or even abandoning an idea. It doesn’t matter what they tell you or what you hear around the water cooler. Congratulate those who succeeded on the first attempt, but don’t use other’s success as a goal.
If you succeed at first, congratulations! But anyway, save this post to your favorites. I’ll still be here for you if you need me. 😉