10 Pre-requisites for a Successful Startup

Pre-requisite (1)- Create an innovative idea

Ideas can come from different sources, like:

  • An inefficient market place.
  • New technology or opportunity.
  • Spin off or side project.
  • Interview with business stakeholders,such as customers, business owners, suppliers,..
  • Brainstorming.
  • Analyzing macro statistics and trends.
  • Publications, studies, reports,..

A simple criteria to evaluate a business idea will be:

  • Is there a sufficient people confirming with evidence the existence of a pressing problem. (Problem-solution test)
  • Is there a sufficient people confirming with evidence a compelling want to buy your product or service? (Product-market test)
  • What is the scalability chances? (Growing business test)
  • What is the profitability (viability) chances? (Viability test)
  • What is the level of impact on people and community? (Impact test)
  • How does it fit to your vision, skills, passion & values? (Vision & capability test)

 

Pre-requisite (2)- Focus on creating a unique value

 

  • ‘A value is something desirable and of worth, created through exchange or efforts’-  Guillebeau, C. 2012. The $100 Startup.
  • It means helping people and creating a worthy solutions for pressing problems.
  • It is expressed as a product or service, features and benefits.
  • It is recommended to be expressed as core benefits to customers.
  • A value will be usually developed through applying a customer mapping process (analysing: target jobs, pains, gains and priority listing) and generate unique solutions accordingly that group of customers will desperately buy.
  • Design, visualize, communicate and test the solution, including a product and its core value proposition.
  • A value can be a problem reliever and/or a gain creator.
  • Innovative value is what a group of customers has a compelling want to acquire and/or buy it.

 

Pre-requisite (3)- Dig deep on what people want

 

A marketable ideas usually derive from a deep analysis of customers’ behaviours toward carrying professional, emotional and social jobs. These jobs are tasks that people do to achieve their daily works, including working, supporting society & community and maintaining self-esteem. Conducted jobs will usually be embed with a lot of pains (i.e. obstacles) and gains (i.e. desired benefits). Opportunities (marketable ideas or solution to problems) is an outcome of deeply digging on a behaviour of a group of people toward conducting jobs (or important tasks).  This process includes getting the following information:

  • Analyze core jobs and how they are performed.
  • Find out related gains and pains.
  • Test pains and gains through interviewing target customers to ensure accuracy and significance.  
  • Prioritize pains & gains according to its urgency and significance.
  • Create unique value propositions ( solutions or business ideas) against concluded pains & gains.
  • Test solutions and develop a product.
  • People want more gains (desired and unexpected gains).
  • People want less pains (obstacles and undesired outcomes).
  • In order to get business opportunities (more gains and less pains), design thinking processes will be applied accompanied with a deep processes to deeply dig and understand what people desperately want.

 

Pre-requisite (4)- Identify your target customers

 

  • It a continuous process for identifying the following:
    • Specify target customers. ( who they are and how to reach them)
    • Measuring the size of target. ( it can be done through top-bottom or bottom-up approaches; it can be measured as total consumed items or value amount per a year)
    • Ensuring the existence of a sufficient demand for a product. ( ensuring viability and profitability)
    • Illustrating how  to reach and sell to them.( customer relationship and capturing value)
  • The basic rule of thumb is that you will produce a product that a group of customers desperately want.
  • Traditional demographics (static) for identifying target customers: it is a descriptive approach emphasizing on age, location, sex, marital status, income, professional background,..
  • New demographics (actionable) for identifying target customers: it is a customer-based approach emphasizing on interest, passion, skills, belief, value, priority, jobs to accomplish, pains & gains, requirements, buying habits, buying cycle,…  
  • Developing a customer profile that describes in details the specific characteristics for the target customer. This process will ease the process of creating the core value propositions, communicating and selling your product (value) to target customers.
  • It will be essential to test and validate your assumptions on target customers during the ideation and business modeling stages and prior to implementation to ensure accuracy and viability.
  • The outputs of the customer-identification stage will be used as an inputs for developing the following business requirements:
    • Testing a problem-solution fit. (Is the created solution fits identified problem- test with evidence)
    • Testing a product-market fit. (is the product, including value propositions and commercial offering, fits the market demand- test with evidence)
    • Testing of a Scalability.( How do you grow a business and make it profitable- test with evidence)
    • Complete and test assumptions for the rest of the business-model requirements, like unique value propositions (product, gains creator and pain relievers), customers relationship, channels, resources, transactions, revenues, costing,..

 

Pre-requisite (5)- Plan your business project

 

  • Objective: successfully conduct the three tests and operate the business.
  • Select a marketable idea.
  • Test a marketable idea to include:
    • Sufficient customers are desperately willing to buy.
    • The target market is big enough to ensure viability and scalability.
    • Problem-solution fit.
    • Testing is carried out through interviewing group of target customers and collect sufficient evidences on set assumptions.
    • Criteria for accepting or rejecting assumptions will be identified.
  • Develop and test a product to include:
    • Designing a product-solution details and make it subject for testing with group of customers. (product-market fit)
    • Testing value propositions and high-level commercial offering.
    • Testing is carried out through interviewing group of target customers and collect sufficient evidences on set assumptions.
    • Criteria for accepting or rejecting assumptions will be identified.
  • Develop and test a business model (strategy) to include:
    • Customer segments (who are they and how to reach them;market size)
    • Customer relationship (how to get, keep and grow customers)
    • Channels (how to sell your product)
    • Value propositions (why customers buy your product)
    • Revenue streams (determine revenue models and pricing details)
    • Resources (what are the key resources required to do the business- people, assets, capital and intellectual properties)
    • Key activities (transactions conducted to produce and sell values)
    • Partnerships (do you require partnership and with whom and why)
    • Cost structures ( what is the cost of products, classification of cost per a product, break-even analysis, and how to reduce cost..)
  • Collective tips:
    • Acquire a passionate and skillful team. (resources)
    • Develop a unique and core value that customers want. (value creation)
    • Plan actions with clear timelines and deliverables to target 3 tests (including problem-solution; product-market and scalability). (transactional)
    • Keep cost low.
    • Market before manufacturing.
    • Get the first sale as soon as possible.
    • Analyze and respond to first results.

 

Pre-requisite (6)- Develop a one-page business model

 

  • Objective: visualize and communicate your business model with stakeholders- team, customers, suppliers, partners, financers,..
  • Overview:
    • What do you sell? (product)
    • Who will buy your product? (target customers)
    • How will your business help people? (value propositions)
    • How do you sell your product? (channels)
  • Moneys:
    • What is your costing structure? (cost structure)
    • What is your capital cost and funding options? (capital structure)
    • What is your revenue model? (revenue stream)
    • What are your charges? (revenue streams)
    • How will you get paid? (revenue streams)
  • Customer relationships:
    • How do you get customers? (get customers)
    • How do you keep customers? (keep customers)
    • How do you grow customers? (grow customers)
  • Resources:
    • What are the resources required and how to acquire them? (human, assets, finance, intellectual properties)
  • Transactions:
    • What are the internal and external transactions necessary to create and capture values. (key activities)
  • Success:
    • What is the criteria for success, including revenue, no of customers, revenue, net income, conversion rates, growing rate, ,..
  • Critical success factors, challenges and risks:
    • What are the critical success factors?
    • What are the main challenges and way to solve them?
    • What are the risks involved and strategy to manage risks?
  • Deadline for launching:
    • What is the deadline for launching your business?

 

Pre-requisite (7)- Make a commercial offer

 

Attractive offer should include:

  • Delivered value in access to its cost and paid price.
  • Offer pitch, including discounts, special offers, free,..
  • Deliver a compelling value that a customer wants.
  • Market the offer at the right customers and at the right time.
  • Craft a product into a pitching offering.
  • Set deadlines for accepting and delivering value.
  • Encourage people to buy and not to sell to them.
  • Create a customer’s motivation for a quick action to buy.
  • fulfill customers’ expectation on value and price paid.
  • Add more details, like Frequently Asked Questions FAQ.
  • Include a worthy grantee to ensure fulfilling of promises.
  • Be ready for a quick delivery of product or service.

Pre-requisite (8)- Launch your business

Successful launching should include the following:

  • Ensure that your product has clear and well-communicated value propositions.
  • Decide on a special offer for early buyers.
  • Use social-media tools to announce and communicate the product.
  • Launch at chosen time & location that most attract target customers.
  • Prepare and review communication and sales materials.
  • Check web links, attachments, payment processor (i.e. PayPal).
  • Set straight forward offer and deadlines.
  • Use attractive launching messages.
  • Collecting & analyzing information.
  • Set monetary goals.
  • Advise your bank on expected cash ins.
  • Add payment terms and options.
  • Set follow-up actions.
  • Celebration.
  • Thankful messaging.
  • Think for the next event and steps.

 

Pre-requisite (9)- Grow your business

 

  • Importantly, create a unique value that customers desperately want.
  • Increase traffic or attention of people on your business.
  • Increase conversion rates, including converting leads into customers.
  • Increase sales through cross-sell (offer related items), upsell (offer better quality or higher price items), special offers (offer quantity or contract discount) and referrals.
  • Leverage on different growing tools, like awareness, sticking and referrals.
  • Ask customers to tell their experience with your business to others.
  • Offer a worthy guarantee to keep up your promises.
  • Increase prices regularly.
  • Communication and promotions.
  • Efficient management of resources.
  • Continual improvement and solving problems.

 

Pre-requisite (10)- Leverage your skills

 

  • Do a business that you are passionate and skilfull on.
  • Apply lean startup methodology that aims at developing and testing lean assumptions.
  • Think of a franchising.
  • Partner and form a joint-venture businesses.
  • Outsourcing instead of making it.
  • Get the right mentorship.
  • Join the right business incubation and accelerator programs.
  • Join professional networks.
  • Conduct a regular business auditing and improve efficiency.
  • Use tradeplace platforms, like ebay, Udemy, Amazon,..
  • Engage with funding platforms, like Kickstars, to validate and improve your business.

Call for Action:

You please feel free to feed me back with your comments and suggestions. Should you need a training or mentorship or advising assistance on startup’s businesses, You please contact us.  For more details, you visit our website http://www.growenterprise.co.uk.

Useful Links:

Written by: Munther Al Dawood

Enterprise Development Services

www.growenterprise.co.uk

maldawood@growenterprise.co.uk

 

Inspired by: Guillebeau, C. 2012. The $100 Startup.

 

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Categories entrepreneurship, startupTags ,

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