Everyone has ideas.
Which doesn’t mean everyone has good ideas. Even if yours sounds great to you, there is a big difference between having a good idea and creating your successful startup.
Not only must you have the spirit of an entrepreneur, but also know how to surround yourself with the right people. And of course, you’re going to have to work hard, devote yourself body and soul to your startup, devour some of your funds there, and go the distance until your business is profitable!
Globally, 71% of businesses fail within 10 years of being founded. To avoid falling into this grim statistic, a good place to start is knowing the steps to follow in creating a startup.
Although in practice you will certainly climb hundreds of ranks throughout its development, we can single out 8 key stages that you are bound to go through. Here are which ones.
Step # 1 Startup Creation: Find a Problem to Solve
We have all already had an idea that seemed brilliant to us. “It wouldn’t be great if…” is the mantra of all entrepreneurs who want to launch their startup. But it is far more important to articulate the problem than the solution at this stage of its creation.
For example, the solution could be for Netflix to allow its users to be able to watch any movie or series on any device for a small fee per month.
But the problem is much more important: cable channels are too expensive, television broadcasting severely limits user choice, etc.
Consumers are now using their mobile devices, rather than a TV, to consume content, so the multifaceted factor is important. All of these concerns should form the basis of what will become your solution.
It may change as you become more familiar with the problem you plan to solve. It is precisely for this reason that you should devote as much time as possible to articulating the central problem that you are going to tackle. This will help you focus your efforts in the right direction at every stage of your startup’s creation (from product development to marketing).
Step # 2 Startup Creation: The idea and validation of the solution
Once you have identified your problem, you will be able to find a solution. This is called ideation.
Ideation is precisely having a lot of ideas. This phase will allow you to refine the solutions, filter the « not terrible » from the reasonable, then test them. A good way to do this may be to submit them to your target users, to find out what they think, and to refine your ideas based on their suggestions.
Finding the perfect match between the problem and the solution requires a good understanding of your market and your future customers. In the ideation stage, we therefore find the realization of a market study, which will allow you to seize the size and the opportunities.
Step # 3 Startup Creation: Gather your Dream Team
If you’ve gotten through the first two steps of building your startup on your own, now is the time to find yourself a team.
Identify the key skills you need before you start looking for the talents who will join your dream team. A good start-up team will most often consist of a CEO, CBO, CMO, CTO and CDO.
Beyond the skills and experience of your employees, look for people who will share your vision and help you boost your project. The most valuable profiles you will be able to integrate are those who will be able to adapt, and take on multiple roles if necessary.
Team dynamics are also extremely important. You’re going to be spending a lot of time together, so bring together people you enjoy working with, especially when you’re starting out.
Step # 4 Startup Creation: Identify and validate your persona
To find customers, you need to know who they are. Defining a target audience is not enough. You will need to create a Persona.
A persona is a semi-fictitious representation of your ideal customer based on your market research and real data. This involves gathering relevant information such as their education, personal demographics or even their professional role.
Once you have identified your persona, you will need to validate it and its interest in your idea. The best way to do this is to interview him or her, creating an environment for you to gather the information you need to better understand your target customer.
Step # 5 Startup Creation: Prototype your solution
Ready to bring your idea to life?
A prototype (or MVP) is the best tool for testing both the potential of your product, and the features you need to address your persona’s problem.
Most often, you will prototype your solution in two steps:
- On paper ;
- by developing a digital MVP.
Once you have your paper prototype, test it with your loved ones and observe their user experience. After collecting this initial information, you can move on to improving your MVP by removing or adding features.
You can then develop your digital MVP, without even needing to code. Many free online tools exist precisely for this purpose (like Material.io, or Adobe XD, to name a few). Your digital prototype will allow you to test your idea with your real users, and adjust your final solution based on their feedback.
Step # 6 Startup Creation: Establish a customer acquisition marketing plan and create a landing page
Now that you have your prototype, you will be able to announce it to the world.
At this stage, you will have to establish your marketing plan, by defining your short and long term objectives. Ask yourself the right questions, including thinking about the message you want to convey, what makes your solution unique, or what channels will be most appropriate to reach your persona.
An essential element for the success of your marketing plan is the creation of your Landing Page. This is where you will redirect your prospects and convert them into customers. To find out more, we invite you to consult the article dedicated to this specific subject!
Step # 7 Startup Creation: Define your business model and source of income
This can be the scariest step for many entrepreneurs. But if you want to be successful in building your startup, you will need a reliable business model.
To get started, differentiate between:
- Your business model: the way in which you will generate value for your customers (and the income you will derive from it). You can also operate multiple business models simultaneously;
- Your income model: the concrete way in which you will generate your income (such as subscription, commission, advertising or even freemium). Each customer segment can contain one or more sources of income.
The commercial stage will therefore consist in sorting out all the factors related to your sales process. Your business and revenue models should take into account things like your industry, your product launch schedule, or the channels you plan to use to acquire your customers.
This is also where you will calculate your costs. To be profitable, you need to find a balance between your income and your expenses.
Step # 8 Startup Creation: Find funding
The last step in the start-up process is to raise the necessary funds to activate the levers we have just described. Self-financing won’t always be a possibility, and luckily there are many ways to get the money you need to make your idea a reality.
It all depends on your solution and your business model. For example, you can:
- opt for a loan (from your loved ones – this is Love Money – from a bank or from public funds – such as the French BPI);
- launch a crowdfunding campaign: especially if you can offer great rewards to the people who fund your MVP;
- look for subsidies: a relevant solution if you are developing an innovative or public utility product;
- convince investors or business angels (most often in exchange for equity).
The bottom line
Creating a startup is not easy.
But this is only the beginning of your entrepreneurial journey. Once you’ve launched your product, you’ll barely have time to say “Phew” that it’s time to collect your initial feedback, re-evaluate your solution, and improve it.
Be honest with yourself, because sticking with a startup that doesn’t work is the best way to go bankrupt. You will sometimes have to go through these 8 steps several times before you find the idea that will really match your market.
But when you do, there is nothing quite like the sense of accomplishment you are going to feel.
To help you get there, check out our solutions to support startups towards their success!