How To Turn An Idea Into a Startup
There is no path that is valid for every industry, sector or product you have in mind but there are some commonalities. You already described the most common steps so I will add what is not there.
If you are dealing with an enterprise or end-user product/technology this secret sauce(s) are valid:
- Find alpha user(s) “first” Industrial technology choices are very much relies on large enterprises to accept your technology, product or solution. Hence it makes sense to work with an industrial partner and basically solve their specific problem first. Then take a step back and generalize it to use with others. This accelerates adoption rates much faster than trying to develop the idea outside and somehow inject into large enterprises. This off course indicates you need to have a solid network of that industry, which may or may not be there.
- Find alpha user(s) “first” Again? yes again because this is also valid for consumer product/technologies… your first users become your community where feedback, interest and feature ideas start to flow. When VC or Angels recognize that you have momentum with existing user base, resources also flow from this.
- Proof of concept must be quick Do not waste time on technology choices, scalability etc at first. All modern programming languages can do what needs to be done. Pick it based on what you and your team knows.
- Location, location, location Any idea needs to compete with other “ideas”. This concept is called Mind Share which is a really thorny issue for movies, games and other creative works which have to compete for attention with other products. Your idea is no different. How to gain Mind Share must be #1 priority, growth ninja etc. roles are all geared towards this end… look up if you have never heard of those titles. You need to be able to present your idea to the maximum number of receptive audiences and keep repeating this basic process until you win.
- Refine the product iteratively One of the best ways to cause a major schism among your community of users is to break a beloved feature just because you think they should use your application in another way. Listen to your users, if necessary make sure both features exist during a transition period which may end up being indefinitely.
- Support and Quality It is amazing to see how many Freemium product that have great offerings but virtually no support whatsoever. Shit happens, if you are not there to hold your customer’s hand, someone else will and that person will steer them to their ship.
You will find many other answers become thought leader, join blogs etc. but they are all trying the Location, Location, Location element and others about product which in a nutshell iterative improvements and support/quality angle.
Firstly you need to systematically test market demand for your idea and if possible validate your customer. This will help determine your viability, and provide guidance on future profit. Start with the following:
- Market Research: Everything from trends, technology changes, macro and micro economic aspects, target market research and develop segment profiles; legal regulations etc.;
- Competitor Analysis: Learning competitor ‘best practice’, their pricing strategies, customer relationship management etc.;
- Pre-Project Customer Validation: Getting a feel for market demand before starting the business. This can involve surveys, getting feedback on mock-ups, testing market demand from landing pages etc. This sets the stage for developing your Business Canvas Model and Minimum Viable Product (MVP);
- Financial Models: Develop some basic financial models. Don’t bother with arbitrary 5-year projections, but you need to a costing and a break-even analysis for the roll-out of your MVP;
- Development of initial ‘Business Canvas Model’ and ‘Minimum Viable Product’. This will of course change, but need to have a starting point;
- Customer Development Methodology: They need a plan on both the marketing strategy to engage potential customers, as well as how they intend to manage this engagement data i.e what data are they after and how will they collect and track data? This again can change but it requires a starting point; and,
- Project plan for the implementation of the MVP. This needs to have clearly defined objectives, a time frame for roll-out etc.
An example for a straightforward pre-project’ customer development methodology for a mobile app would be:
- Perform market analysis and a competitor analysis on the intended app stores. What is trending? Do you have competitors? If you have competitors, get their apps, and determine what features they do and don’t have;
- Develop mock-ups and designs of your intended app (your ‘Minimum Viable Product’);
- Have people, those you can trust to be unbiased, have an initial review of your MVP and provide feedback on the idea;
- Target specific market segments for your intended app and get their feedback on your MVP. You could also develop a survey from Survey Monkey to analyze their preferences & habits in relation to your product;
- Develop a landing page that contains details and invite to subscribe in anticipation of the release. Drive traffic via free sources (i.e. Reddit) and paid sources (i.e. social media advertising) to the page and get some idea on the interest. This also gives you an email list to market to on launch day.
The key is be open to changing your business model as you get feedback. Maybe at the end of the process you might need to iterate back through it with a slightly modified app thanks to feedback. You could use a ‘Business Canvas Model’ (BCM) to capture your model.
Going through the work to set up a business only to find that no one’s interested in your idea is the fastest way to NOT start-up a business. Have you been asked by business owners you know for this web analytic service? Are they willing to pay you for it? How much are they willing to pay? I recommend that you and your partners consider developing answers for these 4 questions. These will help you define the foundation on which you can build a business:
1. WHY – What is it about your products and / or services and your proposed business format that will be beneficial to your customers? Why do you believe you should start-up a business capable of bringing these benefits to the market? Be sure you can answer “What’s In It For Me ?” from your customers’ point of view. Something else to remember: Your WHY is not about making money. Money is an outcome not a reason why.
2. WHO – You need to be specific about the customers you want to serve. Start first with your local market. What industry are these people in? How large or small is their company? Most people make the mistake of claiming they are looking to sell to “Small” businesses, who have a website”. They have no clear and focused picture of what that means. 95% of all businesses in the US are either solopreneurs or micro-enterprises with 10 or fewer employees. Only 4.5% are actually small-medium (SMB) businesses and .5% are large companies. Micro-enterprises and solopreneurs have almost no money to hire things done. Can your service be DIY implemented?
3. WHAT – Most new business owners tend to become focused on this area because it’s what they know best. The WHAT are the features of what you’re planning to sell. Your customers will use the features to support buying decisions based on the benefits that motivated them to purchase in the first place. Don’t tell people what you do tell them why you do it.
4. HOW – These are the processes and methods you use to deliver your products and/ or services. Will you have a brick & mortar retail shop or office or workshop? Will you be virtual? Are you accessible 24/7? Week days or maybe week-ends only?
Once you have defined a solid foundation on which to build a business and you have validated the ideas and or products that will become the core of your offering you can move to the next steps of creating a viable action plan for yourself. That’s another story which I would be glad to share with you if you have an interest.