The start-up journey is a long one, with plenty of bumps, a few dead-ends and not too many short-cuts along the way. And just like with any long journey, a good map makes all the difference!
There are certain stages and milestones that every digital start-up goes through. Knowing what these are and roughly when they happen will help you plan your strategy, stay on track and maximise your chances of reaching your destination – success!
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Your idea is just that, an idea. But you've got a good feeling about it. Reckon it's worth a bit more research!
Market research and validation:
Time to find out if your hunch has legs. You undertake some basic research to find out if there is a genuine need for your idea in the market. What's the competition like? Where are the gaps? What could be done better?
Time to build a cheap and dirty version of your product or service. No need for it to work at this stage, but it must be enough for you to test the idea with a sample of your target market, and gather feedback on whether this is something they would actually use.
Now you've got something to show for your idea, you can start to raise initial investment. You won't be targeting any big fish at this stage, probably just friends and family, and maybe some business contacts who trust you. But it's enough to get your idea off the ground. Not sure where to start? Check out our advice on finding the perfect investment partner.
Find a co-founder:
It's about time to find somebody to share in your vision and help make it a reality. You'll need somebody with skills that complement your own, so if you're a technical whizz-kid, find somebody with the commercial nous to match. Not sure whether you need a co-founder? You can read more about some of the benefits here.
Form your company:
With a bit of money and a partner behind you, it's time to set up your company, choose a name and agree shareholding. An accountant can help you with the technicalities.
Create an MVP (Minimum Viable Product): Time to make your vision a reality, by building the first version of your product that will actually work. It won't be all singing and dancing at this stage but gives you a starting point to test demand with a few contacts and gather more feedback to improve. You should aim to get a minimum of 100 users to demonstrate demand and gather enough data.
Raising more dosh: Depending on your finances, now may be a good time to carry out another funding round, using the results of your MVP as a new selling point for investors. This will give you the cash you need to keep building and iterating your product, ready for beta testing and launch. Find out how to perfect your investment pitch here.
Building your team: You're also likely to need some more specialist expertise, to support the business with areas such as marketing, web design and finances. You can read more about hiring your first employee here.
This should happen when the product is pretty much ready for release, enabling you to gather feedback from real people (i.e. not your existing network) on the complete product and make final iterations before launch. Many businesses choose to carry out a private beta test with invited users first, whereas a public beta test will be supported by marketing and reach a larger number of users.
Time to get this show on the road! Your product's looking good, the public likes it. You're ready for your official launch and big marketing push.
Iteration and growth:
Now your product's out there, you need to do everything you can to improve the user experience and attract more users. That means more iterations, more testing and lots of clever marketing.
Series funding rounds:
With a more established business and significant user-base, you're likely to be ready for more funding. Series A is the first time you're likely to come across Venture Capital investors, who'll be looking to inject serious cash into your enterprise, for a nice healthy return. You'll later repeat this process in Series B and C, when your business is further along in its journey.
The purpose of all this of course is to scale the business, building the user-base, moving into new markets and maximising profitability. And if everything goes swimmingly, your business will keep growing until you're ready for…
It might not feel like it now but chances are that after a few years, once your business has grown significantly, you'll be ready for a new challenge - and your investors will be looking for their returns! That means exiting the business through M&A, an IPO, or selling to a friendly individual. If you do choose to stay with the business, you're likely to find your role changes significantly, from 'chief entrepreneur' to chief executive. Read more about the challenges this can bring here.
That's it – your roadmap to success! Sounds so simple when you write it all down, but it's unlikely to feel like that when you're the one going through it. To help you stay motivated, check out these top tips from some of the world's most successful entrepreneurs. You'll be planning that exit strategy in no time!
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- 13 July 20201 minute read
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