Many young and experienced
professionals are yearning to launch their startup
venture. Seldom they know how. Here is a five step process.
What I am going to share are key
things which you need to be aware of before you jump into starting your
These are not taught in any MBA
class, these are from personal experience of being an entrepreneur myself and
other fellow entrepreneurs who have gone through the grinding journey and have
either tasted success or have failed.
It doesn't have to be like this. In
this article, we'll show you how to
start a startup in 5 steps. We're using our own personal experience to
simplify the process and make it less intimidating. We've done the work to make
all the mistakes, so you don't have to. We have 5 ways to get you started and
ready to create your startup idea.
These are the ‘5 steps to start a
startup’ which I am sharing with you.
Source-The startup race
First Step: Product Idea and
The idea is the key element of any
startup, it's true that ideas are a dime a dozen and what matters is execution.
But the seed of the venture is that thought that comes into your mind with a
flash and you say to yourself, that you want to do it. Validation of the idea
is also very important. Two broad things you should take care of:
a. Is my idea unique, avoid a ‘Me Too’ idea
b. Does it solve a customer pain problem?
If you are able to solve a customer
problem which is unique, then you will surely have a buyer who is willing to
pay for it. In our experience or day to day life we will come across such
challenges or issues which the customers are facing and would love to have a
solution for it.
Take that idea and start to build around it, go into the
very details of the idea and how you would go about execution of it. Check the
competition, there is no such thing as no competition, there will always be
some form of competition out there.
Step: Founding Team
You need to have a strong team to execute your idea else
it will be a challenge to grow. If you think you are Rambo, the one man army,
who will go in and kick ass and the venture will work, well let me tell you it
does not work like that in the real world.
It's not that easy, you could be a
solopreneur, but it will take longer to scale when compared to startups with
teams of two or more. With a team you are more likely to attract investors and
experience success sooner.
They are your sounding board who
will validate the thoughts and directions which you plan. It shows to the world
that there are more people, other than yourself, who believe in the idea.
The next question is what is the
right number of founders, well generally speaking it would be good to have
between 2 and 3 in total as the founding team. You could have more but then you
will only be inviting chaos.
The perfect founding team will have
these three roles, the Hacker, the Hustler and the Hipster.
The Hustler is the visionary of the
business, more often than not he is also the CEO. He is the dreamer who is able
to see the future and has the unique ability to articulate the dreams to
He builds your overall strategy and roadmaps, right team,
looks at sales, marketing, partnerships and guides the team along the journey.
He is the number man with a keen
eye on the financials, cost structure and user metrics, can make investor
pitches and take tough decisions.
The Hacker is your tech person who
will do the development of the product, generally he will play the CTO role in
He is the one who will be
developing the intellectual property of your product and the technology
platform that will form the building blocks of your venture.
The hipster is your creative leader
who is thinking about the design of your product, he is the one who will
deliver the wow experience in your product. He is one who will manage and build
the brand identity, set best marketing practices, user experience, and the look
and feel of the product.
Step: Get Funding
One of the most critical aspects of
any venture is money i.e, funding, but I will here break it down into two parts
- Personal Funding
- Company Funding
Funding: If you are single and bachelor then you could probably survive
on your parents' money. But if you have a family with kids and liabilities,
then financial planning is very important.
For the first year your venture
probably won't return much money to you which you could take home, most of the
money will keep getting plowed back into the venture. So plan for this worst
The minimum advisable is to have 12
months of personal funding to run the house and all liabilities, best case is
24 months. Anything less than 12 months will be inviting trouble, you don’t
want to remove your focus from the venture you plan to build.
Fourth Step: Company Funding
There are few ways to get the funds
to start your venture, you should plan for 12 months of finance to run the
company, this will be mostly for salaries and other misc. items. Don’t count
founders salary in this
- Self funding from savings
- Accelerators / Incubators
- Loans, if you are lucky
- Friends and Families
Raising funds from Friends and
families is right down in my list, personally I would avoid this route, It
could cause you to end up breaking your relationships with them forever or
create unnecessary tensions.
Loans depend upon different
countries, but generally are hard to get unless you have any collateral to
Accelerators and incubators are a
good way to get some seed funding, they will also provide you space and
guidance to grow your venture. But getting into them is a tough challenge as
there are many startups competing.
If nothing works, then self
financing is the only option you will have left. Hard truth but it’s the truth
with which you need to live.
If you are not very deep-pocketed,
like many of us are, then ensure you have the plans to raise funds to grow your
venture. There are very few ventures who have totally survived on their funds
when doing their startup.
Fifth Step: Business Plan
Ensure you have done this document,
it's important to write things down. Many entrepreneurs I know, don’t believe
in documentation and believe that they have it all in their heads.
But the reality is when you start to pen your
thoughts down, that’s when you will also self validate your own idea. That’s
when you have to answer the tough questions. A typical business plan consists
of the following elements:
- Executive summary
- Company description
- Market research
- Description of products
- Management and operational
- Marketing and sales
I want to highlight here is the
Exit Strategy, it is an entrepreneur’s strategic plan to sell his or her
ownership in the company to an investor or another company, IPO or even shutting
If the business is successful, then
it’s a good way to make substantial profits. If the business is not successful,
then the exit strategy will help you limit your losses. Ensure you plan your
stop loss and get out at the right time, don’t keep stretching. Stick to your
Yes you need these guys on your
side if you really want your startup to succeed. Although mentors and advisors
are commonly mentioned in the same breath, we can differentiate between the
Mentors are typically close friends
who will help you grow as an individual, rather than financially. They are
generally older than your age and using their wisdom will guide you in both
personal and business matters. They are generally not on your payroll.
Advisors on the other hand are
professionals whose main goal is to help grow the company rather than you as an
individual. They are experts who will provide insights and assistance in
specific business areas. They will be on your payroll.
So plan to have an advisory board,
with people who are experts in their fields who will help you grow. Having a
board will help increase the success of your venture, either you get them on
day zero or maybe 6 months down the line. The important thing is that you plan
for this in the beginning and start finding the key people who you would like
to be part of your board.
So, these are the five steps on “how to start a startup”. Remember that,
Success in business will need more than just hard effort and good fortune, it
will necessitate making the optimal judgments from the beginning.
Aside from these five key phases,
there are a slew of additional difficulties and tasks to address while starting
a startup. It takes a lot of effort just to wrap your brain around these
You must identify and learn about
each phase in the process of beginning a business. If you want your business to
prosper, you must make the correct decisions from the start!