Startup is an entity created to search for a sustainable, profitable and scalable business model. It is transitional and eventually ends in either success or failure. Startup is not a smaller version of established business. It requires flexibility to cope with the high level of risk and change. That’s why only a small percentage of startups survives and becomes profitable (or at least self-sufficient).
It’s quite complicated to find an unfulfilled niche – consequently, your product might not find a target audience.
Other problems that startups typically encounter is lack of own finances and dependency on loans and/or investment.
The fundamental activity of startup is to turn idea into a successful product.
Sometimes, especially for non-tech founders, it is hard to attract top-notch technology experts on board either because it’s difficult to hire qualified individuals or due to lack of resources. It can take months to compose the right development team which often prevents startups from making progress on their products.
Regardless of whether you rely on in-house web or mobile app development team or outsourcing partner, you will need to build a product that customers need and will pay for.
Most startups move through the same or similar development phases on their path to a successful product. We are here today to present ours – 7-stage plan of the startup development:
1. Thorough market research. Considering that most startups focus their “attention” on commercial products, you need to find out if there exists a right product-market fit. The research phase is also important because you need to figure out if your idea is going to work, and if not – why.
“Startups need extensive contact with potential customers to understand them, so get out of your chair and get to know them. The first step in this process is to confirm that your leap-of-faith questions are based in reality, that the customer has a significant problem worth solving.”
– Eric Ries (author of “The Lean Startup”)
Searching for the suitable methodologies and business models should also take place during this phase.
2. Branding and intellectual property. Aside from fundraising, branding is the most significant stage of startup web development. The psychology of a customer is set during this stage. Power of the brand should never be underestimated, people often buy the branded products instead of seeking the the best ones – or the one they actually need. This phase includes choosing the name and entire concept of your product’s representation. Since all this stuff falls under “intellectual property”, you need to make sure it’s secured (including website domain name and other associated marketing materials) through a copyright or trademark.
3. Incorporation. That’s a big deal for every startup. Incorporating is the process of turning your business into a legal entity and deciding how you are going to structure it. Usually, startups are incorporated as an LLC, a C corporation, or an S corporation. Both LLCs and S corporations have special tax exemptions, while a C corporation is considered a taxable entity. The process of incorporation crucially affects your business so be careful when making this decision!
4. Get a co-founder. You probably came up with your idea by yourself and (understandably) want to get all the profits. However, startups have a high risk of failure, and you need a good team of co-founders to ensure the success of your developing business. Some investors look at the founding team first before looking at the idea when considering making an investment, so think about this in advance. We don’t recommend collaborating with close friends and relatives. Because, as you know, a startup is a very stress-provoking occasion, and you for sure don’t want to lose any of the most important people in your life.
5. A business plan and a workplace. This is another stage where market research becomes useful. Create a business plan that determines your aims, approaches, methodologies, anticipated expenses and incomes. Don’t hesitate to ask professional managers and consultants to help you write an effective business plan. The location of your startup is yet another important stage. If your business requires specific environment and/or facilities, think about this in advance. It might be quite costly to rent a workspace, so you can start with locating your startup in a coworking space.
6. Raise resources. You probably don’t have enough money to start your business from scratch. Loans and investments can really help you take off – but you should never forget about the dark side of such “helpers”. You will eventually have to return the money or share the profits. When you decide how much resources you will need (don’t underestimate your expenses!), you should decide how you’ll be raising it — by crowdfunding, from an angel investor, or through a traditional VC firm.
7. Mentors and accelerators. In fact, this stage can be put in between any of the aforementioned ones. Mentors can improve your management skills and provide deep industry insight and wisdom to help you navigate through some of the challenges that you may bump into. But don’t overestimate mentor’s influence – his or her aim is to teach you to how to be a leader, not to become a leader instead of you. An accelerator is a startup development company that helps speed the growth of the company by providing a counsellor network and, sometimes, small investments. This stage is optional, however a mentor or an accelerator program might help you to achieve success faster.
Once again, startups are always risky, no matter if you do website development or produce elastic ribbons. Nonetheless, success is possible – and hundreds of profitable startups have proven it. Focus on what you do and never give up!