How to go from idea to startup? 10 Steps to Help You Start a Startup
Chase the vision, not the money, and the money will end up following you. – Tony Hsieh, Zappos CEO
How to go from idea to startup without wasting unnecessary resources and time? Startups form a highly popular business model fueling economic growth and innovation worldwide. Numerous startups are mushrooming yearly as entrepreneurs test their creative and ambitious ideas. The United States is one of the leading countries for startups, as per a Statista report. While it is home to successful startups like Facebook, SpaceX, and more, not all startups take off explosively. Key statistics from the Bureau of Labor Statistics indicate nearly 20% of startups fold down within the initial couple of years, and 45% don't survive beyond the fifth year.
Insufficient market research, rushing into building the startup without proper research, delegation, and estimation of the time and cost are a few of the challenges present. Despite what the stats reveal, the situation is not an irreparable one. With a planned approach and prioritizing key aspects of the startup launching process, it is possible to make the venture a success. Seeking assistance from one of the top development companies for startups can make a big difference in the success rate.
John Doe is the author of this article. He is an IT specialist specializing in machine learning and artificial intelligence. He has published many posts on technological advancements, AI, and other tech-related topics making him an authority in technology-focused topics. He states, "Insufficient market research will end up in the business offering customers a product or service they do not want or are not willing to pay for. It is impossible to sell a product without taking time to know about the potential customers or market ".
This article gives a detailed guide on how to go from idea to startup. It provides tips on how to take a business idea and build a successful startup on it. The steps provided help in approaching the development process in a streamlined and seamless way, ensuring effective execution and outstanding results.
10 Steps to help you start a startup
For businesses unsure of how to go from idea to startup, here are ten crucial steps that help achieve a blazing start to the business.
Step 1: How to go from idea to startup – Start with market research
Insufficient market research will end up in the business offering customers a product or service they do not want or are not willing to pay for. It is impossible to sell a product without taking time to know about the potential customers or market.
To start with, a startup should identify the problem that it will solve with its product. Once the product or service is identified, the next step is finding the target customers with the problem.
After knowing the target customer segment, the competition should be checked out. If a similar service or product is already in the market and there is stiff competition, it is not a good sign. At the same time, a total absence of competition is also not good. It indicates there is no demand for the product or that some factor is preventing the product from being in demand.
Here are the ways to do comprehensive market research:
- Conducting surveys and focus groups research method to discover target audience opinion
- Identifying the USP (unique selling proposition) of the company's product
- Performing SWOT analysis of the competitors
- Reaching out to potential customers to know about the problem
- Understand the barriers to entry.
- Forming pricing methods
Step 2: How to go from idea to startup – Protect the business idea
Startups need to protect their intellectual property rights in case some other individual or company reuses the business idea. Some safeguard measures include
- Patenting the product which protects the product technically.
- A trademark will prevent the product name from being copied.
- An NDA (Non-disclosure agreement) with a dependable vendor will help protect the idea and information you provide to the development company preventing them from reusing the idea in some other project.
- Copyright protection is another way, but this can be used only when product development is completed.
- Confidentiality agreements with vendors will help protect the business idea from being stolen or reused.
The benefits derived from protecting a business idea are many. It is easier to improve the market value of the business, turn innovative concepts into profitable ventures, effectively market the products or services, and boost the expansion of the business.
Step 3: How to go from idea to startup – Hire an efficient team
While the business idea may be the brainchild of a single individual, turning it into a business requires teamwork. Every successful business has a smart team behind it. So, hiring a team of talented people is a crucial step. Building an efficient team can be done in two ways:
- Hire remote workers, which helps to dip into a bigger talent pool at a lower cost. However, there are issues like lack of communication and security of proprietary information.
- Using an in-house team is expensive as the company needs to rent a space, register the business, pay taxes, etc. But it takes care of the communication and security issues.
- A third and more effective way is to use a development company with experience and reputation in the field to provide proper workflow and communication and save money and time.
Step 4: How to go from idea to startup – Take care of funding
Finding the capital needed for the startup is one of the main hurdles that many find difficult to resolve. However, since funds are essential for every phase of startup development, arranging for funding must be prioritized. Pitching the business idea to prospective investors, including angel investors, plays a vital role. Some tips to attract investors are:
- A video or short demo explaining the business idea visually can help explain the concept effectively. Videos are more engaging than providing documents or reports.
- Publishing the project on platforms dedicated to crowdfunding, like Kickstarter, can help.
- A whitepaper can help in giving the necessary info on the project, including the idea, the problem it will solve, expected demand, projected growth, and more.
- Concisely pitching the idea to explain it in a potent, sharp, and impactful way will help attract investor attention. While pitching, transparency and consistency in presenting information is important.
Investors can be found online or locally. Local investors can be found by attending local business events that provide the right environment for finding investors and tips for effective startup operations.
Proving the business model's viability is paramount to investors being attracted to the project and accepting to fund it.
Step 5: How to go from idea to startup – Develop the business plan
A sound plan for developing the startup is crucial in ensuring seamless progress of phases from the initial business idea to the startup. The vital factors a company should pay heed to for successful planning are:
- Set clear goals using the SMART (Specific, measurable, attainable, relevant, and time-based) method. With a time-based and specific goal, the planning process is easier. The project team is fully engaged and updated on the progress with a measurable and attainable goal. Relevance of the set goal will ensure it is easier to monetize.
- Review the target market and record the insights researched during the initial phases of the startup launch.
- Focus on beginning the promotional phase and plan for the marketing budget.
- Recognize the various expenses involved and have a separate fund allocated for emergencies.
- Review the market trends and create a response tactic for the trends.
- Set realistic predictions for the growth of the business and its scalability.
Step 6: How to go from idea to startup – Create a prototype (physical or digital)
A prototype is a product model used to test and improve the features before the final version is created. Building a prototype helps in many ways. It
- Attracts investors
- Tweaks the product
- Makes the business idea viable
Prototypes can be in different forms like
- Cardboard or wood models
- 3D-printed plastic or resin models
- Sketches or diagrams
- Animation or a video model
- Demonstrations using technologies like virtual reality and augmented reality
- Wireframes for products like apps and software
Some important influencing factors in prototype creation include the time and money that the company can afford and the complexity of the prototype.
While a company can create the prototype internally for testing and to demonstrate to designers, outsourcing is ideal for a complex prototype that is nearly identical to the finished product. Investors, customers, manufacturers, and clients require detailed prototypes; hence, a product designer must manage the entire process.
While outsourcing, it is essential to look into intellectual property rights or have the product patented or its design well-protected. Having the outsourcing company sign non-disclosure and confidentiality agreements is ideal.
Step 7: How to go from idea to startup – Building a minimum viable product (MVP)
Creating a minimalistic and viable product model based on market research and business ideas is the next important step in how to go from idea to startup development. For an MVP to succeed, the company has to prioritize features required for the target customers.
Ideally, the MVP has a single feature that helps solve the problem faced by the target customer. Focusing on providing minimal features and increasing the features when the company grows is necessary for success.
One of the ways to validate the MVP is to involve customers in the creation of the MVP by contacting them via email. Asking for customer feedback is an excellent way to hone the product features and improve it effectively.
To avoid making drastic mistakes with product development, building the product in the open or using a sufficient number of people in your closed beta/alpha helps in keeping the product focused on achieving its target and preventing it from progressing in the wrong direction.
What is the role of feedback?
Feedback from future customers helps to assess the functionality and demanded features. It helps in improving the functioning of the product. It also enables the company to focus on features in demand among future users, which can be deciphered by user feedback.
Analyzing the feedback enables the introduction of adjustments and improvements. The next step is testing the MVP by target users and repeating the steps until a complete app with a spectacular user experience is gained.
Step 8: How to go from idea to startup – Testing the product
Testing the product before launching it is another important step. Testing involves analyzing the concept, feature, and functionality of a product. Waterfall or Agile methods are used for testing. While the waterfall method is used in the beginning stages of product creation, the latter method uses testing of all phases of product development. Testing helps in
- Gaining insights into the preferences and needs of customers enabling proper direction of the development process
- Improving the product as per the expectation and needs of customers
- Saving time by identifying potential risks and issues early
- Achieving business objectives by helping the development team understand the product and focus on increasing customers and revenue.
Step 9: How to go from idea to startup – Launching the MVP
After creating the MVP and testing it, the next step is launching the product. Launching the product on social media is ideal for companies with a huge social following or media attention. To ensure the launch is smooth, there must be sufficient good customer feedback. Failing to have positive customer feedback makes the product unvalidated, making the launch a big risk.
In the case of most startups, the launching process is a way to get more traction and beta users for testing the MVP. Launching the process in relevant social networks, assessing the results, and measuring the feedback helps to make the process effective. The process will likely be repeated a few times until the product is completely ready for launch.
A well-planned marketing and sales strategy are vital for a successful launch. Some important things to verify before the launch are listed below:
- Ensure the development team has executed the strategic vision stated in the product planning stage.
- Proper testing (including alpha and beta testing) and quality analysis.
- Train the company team for sales and customer support
- Review the customer journey to purchase the product is smooth
- Track user behavior and gather early user feedback
- Identify possible issues that impact the launch and have a plan to circumvent them
- A successful launch is based on team members' collaboration and combined effort. Consistent focus on marketing, sales collateral, support, and testing ensures successful results.
Step 10: How to go from idea to startup – Consider scalability
After creating the MVP, testing it, and launching it, scaling the product is a step forward in boosting the business's profitability. Scaling needs more time and resources, so a business has to know the right time to scale.
When is the best time to scale up?
A startup is ready to expand its business when it achieves the following:
- If the team is skilled and experienced in providing quality work.
- The business has set a track record of reaching project milestones effectively
- A strong financial position that can support further cash input needed for research, development, inventory, marketing, and related costs
- Appropriate infrastructure that enables the smooth running of operations indicates the company is capable of catering to more users. Performance testing will ensure that the business can increase its production.
How to scale
Different strategies are present for scaling up a business like
- Seeking more funds citing the expansion plans, current profitability, and projecting the expected ROI
- Investing in technology and company infrastructure
- Create new marketing methods like paid ads, creating engaging content, video blogs, guides, improving SEO, direct marketing, and email marketing.
- Launch a product that is complimentary to the main company offering.
- Hire a skilled and experienced management team.
While scaling up is a big leap forward for a business, the challenges involved in the process need to be acknowledged. The inability to find suitable talent, injudicious use of funds, and failure to adapt the business to changing market trends are challenges that need to be addressed.
Final Thoughts on How to go from idea to startup
Conceiving a business idea and converting it into a tangible product and business requires a deep insight into the various phases involved, from idea creation to growth and scaling of the product. Innovation and the motivation to solve a difficult problem are key driving factors for the creation of a Startup.
In this guide, businesses can learn how to go from idea to startup with all the significant steps involved in transforming an idea into a viable business. Startups differ from regular business ventures in the fact that they are driven by innovation and the need to solve a customer problem creatively.
As an innovative business, the startup can turn into a market leader. But this is possible only when the market is big, and the solution offered is scalable. With the right focus on the essential aspects of turning a startup idea into a successful business, startups have a high chance of achieving unbelievably high levels of reach, visibility, and profits.