How to start a startup? Nobody plans to devote months and years of life to a company that fails and does not create a successful product. Still, 90% of startups fail.
What do experienced entrepreneurs who have launched successful companies know that the founders of unsuccessful projects do not know?
Why is it important for a startup to start well?
The reasons why 3 out of 4 startups fail vary, but they often boil down to the following:
- The company is developing a product for a non-existent market (insufficient demand)
- Managers do not know how to manage cash flow, for example, use a non-working income model
- The company does not adapt to changes in the market
- The project is not growing fast enough
Founder burns out at work
There is a lot to talk about here, but an interesting fact is that insufficient attention is paid already at the very beginning of creating a startup.
Having worked with a large number of startups at Appster, Josiah Humphrey and the team have seen that the success of a startup often depends on five key questions that must be answered before starting a company:
- What is the specific line of business of your company?
- What exact problem are you trying to solve?
- What market are you entering?
- What product would you suggest to solve the problem?
- What is the economics of your business model?
Your first steps can determine whether your company will be valued at millions of dollars or whether you will be another startup from the 90% that no one remembers.
What is the essence of your company
Before starting a startup project, determine the exact direction of the activity.
“What am I going to do?” This is the most important and therefore the very first question you should ask yourself as soon as you think about starting a startup.
The direction of the company’s activity is the foundation of the house: a foundation is needed for future floors.
A basic aspect of building a successful startup is to determine for yourself the ideal intersection point between your skills, interests, and what you will be paid for.
Almost every successful entrepreneur has found the optimal golden mean between his own interests, skills and the opportunity to make money on his idea.
Take, for example, Steve Jobs. He liked design (it was his passion), he was an excellent marketer and product manager (skill) and he was able to combine features with what was popular in the market at a certain moment (monetization) – these were personal computers, MP3 audio players, movies with 3D effect and brand new mobile devices.
What’s next, you ask? Grab a pen, a piece of paper, and don’t stop until you answer the following key questions.
What type of activity will you choose for your future company? What do you like to do the most? What turns you on and keeps you awake?
Without passion, you cannot create a successful startup, but that’s not all.
Often true love for a cause grows when you feel successful. When thinking about the direction of your company, don’t focus on the current passion, imagine what will give you a sense of satisfaction in the future.
Make a list of hobbies and move on to the next item.
What do you do best? What unique talents or abilities do you possess? What do you do better than others? Are you a highly skilled designer, developer, salesperson or jack of all trades?
Write down as many of your skills as possible.
You may not yet have achieved excellence in all areas, but you definitely have a set of talents, knowledge and the potential to succeed.
Once you’ve identified what you’re passionate about and compiled a list of talents, ask yourself two more questions: Can you link your interests and skills to create a startup that solves other people’s problems? If so, then here’s the second question: Is there enough market demand for your product to make a profit?
By answering questions about demand and profit, you filter skills and hobbies with commercial potential from failures.