Beginner’s Guide on how to Start a Startup
Before we begin, let us first understand the basics of Startups. What is a Startup? It is important to understand the terminology to avoid misunderstanding. Various experts and business owners have different explanations but no precise meaning of exists.
Paul Graham, founder of YC explains, “A startup is a company designed to grow fast.”
The Department of Industrial Policy and Promotion (DIPP) has tried to put the definition in words and come up with an initiative to create an encouraging setting for startups in India called “Startup India”. According to this, an entity will be termed as a startup:
i) Up to five years from the date of its incorporation/registration,
ii) If its turnover for any of the financial years has not exceeded Rupees 25 crore, and
iii) working towards innovation, development, deployment or commercialization of new products, processes or services driven by technology or intellectual property.
Now, we will discuss on how to start a startup and study every related detail. So what you need to create a startup and be successful? There are four things to consider with a dash of hard work and a pinch of effort, et voila, you have a successful startup.
Ideate, prepare & validate
Of all the things you need an idea, to get started. An idea that will offer better and innovative technology than the one offered by existing companies. Or, a service that is missing and can give a breakthrough to the company. Take the thought process to next level and redefine the perspective. After that, prepare on how to move forward with the idea so that it is worth the time and focus. Also, do not transfer ideas to some else because it belongs to a particular person and he can execute it. And then, get a view from mentors to see the validity and longevity of the technology. For example, Urban Ladder opened an online furniture selling store and capture the biggest unexplored market. There was no major seller in India in this e-commerce segment. And it scaled the height of success and even convinced the billionaire Ratan Tata to be their mentor and investor. (www.techasia.com)
“Equipe”: Founders and Workforces
When everything you do to realize the idea is teamwork. For this, you need to have people who are intellectual and smart who know what to do. As Steve Jobs said, “it doesn’t make sense to hire smart people and tell them what to do; we hire smart people so they can tell us what to do.” The best people to hire are those who we already are in contact such as college friends and where the startup culture originates. There should not be more than, four Founders. It is advisable to start with one because it’s easier to exchange and have a discussion on the concept rather than disagreements. So less the founders, merrier it is to work. The founder should be more of a technical person who has an extensive insight and knowledge of technology. For instance, Kunal Bahl (worked with Microsoft) and Rohit Bansal joined together to form Snapdeal.
Launch & Consumers
What makes you different from other technology providers? You should know what the customers want, otherwise, the startup may fail. For this, try to develop a prototype of a project to measure and discover success rate of the actual. You need to pre-launch the program and take feedback from people. The other approach is ‘Hail Mary’, where you spend endless money and after & year or two you realize it was a failure. The former method allows the company to make changes and re-launch sans major errors. The launch time should also be kept in mind instead of brooding over it. It has to be near perfect; not too soon nor too late. Apart from that, take a niche marketing approach instead of launching directly in main market. It offers a stable platform for the technology to be absorbed and appreciated.
Investment & Funding
Well to make the concept reality, you do require money. There are various funding options: self-funding, friends, investors or incubators. For self-funding, you have to start a consulting firm and then transit into a startup company, which is not so feasible after some time. Funding from friends can be limited but has extra benefits such as advice. Incubators provide you workspace, operational support, and funds but chances are you become more dependent on them at the end of the day. The majority of companies prefer funding from investors such as angel investor or crowd funding but it could be an extremely laborious task. The product has to pass certain metrics and criteria are built by funding agencies. A startup may face some negotiation schemes in the initial phase, so pitch extensively about the product and its diversity. Every investor is aware of the risk factor but once convinced, he will surely be interested in backing it up. And avoid scaling the money on unnecessary services, or else it leads to burn out.
It is equally important to understand that you must be focused and driven to venture in to start a startup. Because surely, it will not be easy and have to face lots of ups and downs, rejections. Do ask yourself why a startup or why not a startup. This guide for beginners on how to start a startup will pave way for planning and implementation.