Startups are considered by many people as a very early-stage company, usually very immature. As I cannot argue with the first description, the latter is something that can be coped with. The problem is that not so many people try to analyze how they can have a very mature approach while still being considered as a startup – and in my opinion, giving this a thought at the beginning of your journey is the key to success.
So let’s begin with some basic, you have to ask yourself what is actually important to you?
This is something that will be the ignition to creating a vision. Why are you building a new company? Is it money? Is it fame? There may be really many things that drive you, and setting them up at the beginning will allow you to solve many other aspects.
Running a startup will require consistency and drive (the most important factors). Of course you will lack experience (unless you are a serial entrepreneur) – that is why those two factors are crucial because they are the ones that will allow you to gain experience.
For us, whenever talking to a startup asking those basics questions (some might even say they are investor-like) is crucial. We try not to get too excited with an idea, but rather have this cold-hearted attitude that would allow us to assess if a given product is well-thought through. This is something that distinguishes us from others as we strongly believe in understanding the basic business idea which will allow us to shape a product that would actually solve some problems of the market you want to operate on.
Another aspect that I mentioned (besides drive) are the basic business-facts:
- Who is your customer
- What is his/her problem?
- How are you planning to solve it?
- Do you have a competition
- How are you better than the competition.
- What is your desired pricing model
- What are the numbers
- Who are the founders and how can they support the case.
Of course, there are many more things to consider, but let’s face it – this is the basic homework you should do. And please remember – you’re not doing it for investors – you are actually doing it for yourself.
Which brings me to another topic – many inexperienced startup (once they get funded by a VC) tend to do everything that the VC tells them to do.
Of course, the basic assumption should be that the VC people are more experienced than you, but please, never do that. You have to have your idea how to do the thing and you have to be able to discuss it with them. Of course, do not act stubbornly, but be precise, talk about facts and show them that you have a vision. Naturally, the vision can (and most probably should) change, but you have to be the one to decide about it as, let’s face it, it’s YOUR product/company!
Speaking of investors – from my perspective I’d advise you not to “build to exit”. As usually those types of businesses fail. Your vision has to be bigger than that. Of course, you may assume some kind of exit at some point, but do not let this drive you.
Investors will usually ask you a question like “Let’s say that in second round you will be offered 2$ dollars, would you exit?”. From my perspective, if your answer is “yes” – they wouldn’t be interested.
Owning and building company is definitely not a sprint – it’s a full-blown ultra-marathon placed in high mountains:)
Other things that will distinguish you as a company with a mature approach are the plans for the future. So even if at the beginning you do not see much need in marketing, please spare some time to think of possible actions in the future. This will show that you have a long-term vision. Do not focus on this too much (as at that point some things would be just wild-guesses) but show that you are in fact considering it. The same goes for sales channels – the more of them you consider, the better, as an investor will see that if you get the money from him you will consider different ways of growing your client base.
There are many other areas that can be tackled, but I’ll finish my short article with the most important one. TALK TO YOUR CUSTOMERS. Do it even before you write a single line of code. VCs will never go further with a company that has even the nicest product in the world but didn’t actually get their hands dirty and talks to the people that are supposed to use the product.
So go forth, and discover the beauty of running a business, but please, be mature about it:)