In phase 1 we went over the basic to dos to set up your company. So what happens after you’ve chosen your name and set up your business plan? You’re entering a painful but exciting phase of validating your product and getting sales established
You’ve entered the initial stage of any business. Welcome to the startup phase. Take a seat, you might be here for a while.
The first thing you want, is to find out more about your customers’ problem. You have an idea that you believe solves a problem, so now you need to find the people facing that problem, and make sure to co-create your product with them. Everything will be an experiment; you will hypothesize your product as a solution to the customers’ problem, and through continuously asking and testing, you’ll build a product that actually matters. Get out there, conduct customer development interviews, pick up your notebook, and start building prototypes even if it’s just on paper.
“Everything will be an experiment; you will hypothesise your product as a solution to the customers’ problem, and through continuously asking and testing, you’ll build a product that actually matters”
Rule of thumb is: the less money you take from investors in the beginning, the better your terms will be when you enter the growth phase. So The Notorious B.I.G. was not far off when he said “mo’ money mo’ problems” although in the startup world you might say “mo’ investors’ money mo investor problems. Evaluate how much money you need; shortlist investors; approach, pitch and pander, but raise only what you need.
“Evaluate how much money you need; shortlist investors; approach, pitch and pander, but raise only what you need.”
Sales are a science in itself, and the best way to think about your research into the problemsolution fit is as a precursor to sales. To be effective in sales you have to develop a clear pitch, such as Founder Institute’s famous “1 sentence pitch” or “the 15 word pitch”.
Next up; make a 10-slide pitch deck where you explain the problem your target market has, how you’re planning to solve it, and in line with this; specify on your product(s).
Make sure you can explain to people in two minutes tops, what it is your product does and why it is solving a real painpoint. Look up the term “sales funnel” and check out which tools will work best for you.
“develop a clear pitch, such as Founder Institute’s famous “1 sentence pitch” or “the 15 word pitch”
Test, iterate, test, iterate: Log results from all your interviews, analyse and do learning sessions daily or weekly. The same goes for After Action Reviews. This is paramount to you losing as little time as possible in getting a kick-ass product out there. Implement appropriate accounting systems and make sure to keep it simple; you don’t want to spend more time on this than you have to.
This second phase of validating & establishing sales will prove to be a make-or-break for your startup. Without it, you won’t have the knowledge nor mindset necessary to pivot quickly and adapt to the market. With it, you’ll have the pre-requisites to develop something important and the leeway to get to the next level of growth. Enjoy the ride.
“Test, iterate, test, iterate: Log results from all your interviews, analyse and do learning sessions daily or weekly.”
Wanna learn more and get all right from the start? Applications for the EY Start-Up Challenge are open until February 14th. Worried about travel expenses because you’re not in Berlin? Travel expenses up to €7.5 K are covered!
Find more insightful information here!