From an idea to a startup: where to begin?
But why are startups needed anyway? We have introduced Innovation consulting, our brand new service recently. We offer this now because we are aware that the future belongs to those who dare to dream big and invest in innovation. Think about the success of Uber or the Hungarian startup Netpincér - they couldn’t have been started if the founders had just waited for taxi services or on-line food orders simpler. But instead of this, they planned and innovated - and their efforts have paid off: with their businesses, they gave the population something new, something extraordinary. And our lives have become simpler in a way thanks to them.
Nowadays those universities and colleges that offer business couses are becoming more and more popular. However, these institutions usually have classes based on theory instead of practical issues and examples taken from real life. It is also quite frequent that they have been using the same textbooks in the past 20 years - but the needs of the market and the business world are changing really quickly. It is really hard to keep up with the constant changes and it is even harder to teach in these times. Let’s face it: being an entrepreneur is not something you can learn at school.
That’s why we have collected you a few steps which can help you to make the idea in your head to become a real business.
Every success story begins with a good idea… But what is a good idea like? If you invented a new phone game which you and your friends like to play with, you still cannot tell for sure if there is a need for it on the market. When it comes to startup ideas, maybe this quote from Einstein is the best one to show what to aim for:
“If I had an hour to solve a problem I'd spend 55 minutes thinking about the problem and 5 minutes thinking about solutions.”
Understand? A good idea is always one that finds a solution to the existing problem of a tartget group. It is a generally accepted rule that a good product is like a painkiller - and not like a vitamin pill. Vitamins are essential for the body; you have to keep your vitamin levels at the right level, that’s why many people take them in the form of pills and capsules. But if your head hurts, it is not the vitamin you are going to reach for but a painkiller. If you apply this same model to your targeted market and their needs, you can see that it works in the same way: if the market has a visible problem (which can be described and studied), and you can provide a solution for that, you are possibly on the right path.
Validating the idea
So where are we now? You have a group of people with an existing problem, and you also have an idea that might be able to help them with their problem. Unfortunately this is still not enough for a startup to become successful. Think about it: when do you take a painkiller in general? Straight away after your head starts hurting? Maybe in case of severe migraine, or when the climate changes saying “it’s going to hurt anyway?” And which type of painkiller do you use? There are hundreds of brands available.
As you can see, there are huge differences between people even if it comes to such a simple-looking problem as painkillers. That’s why it is not certain at all that your solution is the best one available. So once you have an idea in mind, you also have to validate it.
The easiest way to validate an idea is the so-called “fake door test.” This means that you have to build a website and a marketing campaign - but you have to do it as if your product already existed. So first, you work out the whole concept of the product, the features and the pricing as well. Then you put all this onto your website and wait for reactions. If the number of people who are interested reaches the number that you had set as a target, then it looks like there is an actual need for your idea on the market.
Be ready with a plan to enter the market
There is no business without a business model. Once you validated your idea, make sure to select the guidelines for your startup that you and your teammates have to follow along the way. Are you thinking inland or do you also want to take your idea abroad? What is the maximum amount of time and money after which (if the business doesn’t thrive) you decided to do something else instead? If you don’t lay down these basic rules, then a good idea can easily become a waste of money and time.
The plan should be relatively short and to the point, and must be easy to understand even for lay people. Of course it is important that you look at your opportunities in an optimistic way, but try to set realistic goals within reach. Make sure you have statistics from the given country to get a more exact view of your chances. Learn how to present your plan - since a business plan is not only for your and your team: when you are looking for investors, you’ll have to present them something, too. One part of this is your business plan, and the other one is…
The next step is to come up with a prototype. You don’t have to develop or produce the full and final version of the product - you only need a version with which you can demonstrate and present the product or service. In the startup world this is called Minimum Viable Product. With a validated idea, you’re on your way to a real startup. But with a prototype, you can be a step closer to finding the real user needs; moreover, future investors can get a taste of your business up front. And in case the prototype is not convincing enough, it is still not too late to make changes - or approach the idea from an entirely different point of view.
This is a topic that often leads to conflicts among startuppers. A lot of the doubt that you even need investors - they think that a business should run solely on profits. Besides that, the following question also arises: some startups consider it success if they have enough funding for their project - however, this doesn’t necessarily mean that the business will be successful.
Whatever the truth, one thing is for sure: as a beginner in the world of entrepreneurship, you will probably need more resources than you already have, so it is worth it to look for investors. But don’t make the mistake of laying back after having the necessary money - the “best” is yet to come. Have your goal always in front of you - and your goal is to launch a successful startup, right?
The key to success: a good team
It doesn’t matter if your team consists of 2 or 22 people. What’s more important is how these people interact and like each other. Try to keep the common goals in mind, but don’t be afraid to pick people from different cultures or backgrounds - you can learn a lot from each other. Do you remember the business plan you wrote up? It is going to be of use now: it will help you determine the goals and the business guidelines. If everyone knows what they are working for, you’ll have to spend less time going to meetings and explaining things; but you will have much more time to focus on what’s actually important: launching a startup.