14 Tips on How to Start a Startup
Any independent, new business venture with aspirations of a near vertical growth trajectory and, addresses a market challenge by either developing or offering innovative products and services is termed as a startup. It’s the dream of many entrepreneur to stand at the helm of one.
In this article, we distill the 14 key guiding principles from the seminal Startup work of Paul Graham.
- Think into tomorrow. People are habitual by nature to either remain in the past or in the present, because it is always relatively easier to view and follow what has been already done by others or follow the example of success that they have set. Although there is nothing incorrect about this approach, however it is not the best way to begin a big start up based on the already set example. The foundation of big startups lies basically on two types of ideas – the obvious and the hard such as Elon Musk’s SpaceX and the non-obvious and hard like Uber. Let’s delve a little bit deeper into these two types of ideas. The business idea of SpaceX falls under the obvious idea category, as it was the only other enterprise other than NASA that was qualified and equipped to send people to Mars. Also, NASA had no plans to carry out a similar mission at the time when SpaceX started. Hence it is falls under the obvious category as nobody else is doing it assuming it is impossible. Yet if you are futuristic, it is obvious to you that it is certainly likely that the human race will either go to Mars or another other similar planet or face extinction at some point of time. Hence, it is even more likely that people will indeed find means to leave this planet to convert this impossible thought into a possibility. Uber’s startup venture on the other hand falls under the non-obvious category, because it emerged from the idea that at any given point of time there are at least two people who are seen to be travelling from a same location to a similar destination, which is non-obvious. It was a difficult process because it required gathering and storing huge amount of data about the travelling patterns of people in a city. Although this kind of data analysis is quite possible nowadays, but it was not when Uber came up with this idea way back in 2009 when they started their venture. Hence they thought into the future.
- Look for problems…in a positive way. Take the example of Uber startup. People observed friction in taxi rides were not enjoyable, affordable, and readily available when needed. Similarly, SpaceX noticed that people in general were less interested in the mysteries of space. So the crux of the message is that you should always lookout for what is missing or inefficient in the current process.
- Carry a notebook Irrespective of how smart you are, it is highly unlikely that you will recall all your ideas and insights. You should always develop the habit of jotting down your random observations, any productive discussion points, random thoughts etc which are always worth revisiting and following up on. If you do not develop this habit of jotting down, there is a high possibility of you losing track of them.
- Build a prototype. Despite writing down most of your thoughts and ideas, there is still the possibility of them going into oblivion. However, if you develop a prototype based on those thoughts and ideas they end up emerging into reality rather than being just thoughts. Make your prototypes in such a manner that you can test them and implement them by programming and designing them appropriately.
- Showcase and promote your prototype. Do not just stop after developing an amazing prototype. You must step out of your comfort zone and look for people who can evaluate and critically assess your prototype. Share your prototype amongst people you know and as well as to strangers so that you have a mixed sampling process in order to elicit an effective review of your product. Seek for as many people as you can, at least a 100 people so that you get a breadth of perspective and a pattern usually emerges when the panorama of feedback is huge.
- Always experiment. Always iterate It’s highly ulikely that you will get it all right at the first try itself. So you must be prepared to start everything from scratch.
- Find a partner but make them strategic After the results of the prototype reach your hands, start looking for another person who will also be interested to invest his or her time and effort into your startup and you both can make a difference to this world. Two minds are always better than just one.
- Register your startup. It is always advisable to split equity. An easy way to achieve this is to hire a lawyer who will get your company registered. Do not be close fisted when it comes to splitting the equity. Give your co-founder an equity that is satisfactory enough to make him or her stick with you, and give their best.
- Seek funding. Until and unless you have ample savings to build the first version, it is always advisable to look for an investor while you continue building the version. It is important to continue building your first version because there is no guarantee as to by when you will manage to find an investor. It is always better to assume the worst and build your product without thinking that just because other startups have received funding you will receive as well. Basically do not stall your work while you can continue seeking for an investor.
- Always follow up with your users. You should always conduct a follow up with your users. In case there are users who are not coming back, investigate and learn from the reasons as to why they are not.
- Launch again. Do not give up give up after one single unsuccessful startup attempt. Launch as many times as required. Even if a couple of people are coming back on their own, it means you have successfully created something worthwhile.
- Reach out to at least a 200 users. While the number may not appear to be huge , your first 200 users will be able to point out the flaws in your product.
- Keep growing. It is advisable that startups should grow at least at the rate of 5% per week. At this growth rate, within a period of four years you will be able to reach out to 25 million users. Basically, you will emerge as one of the largest startups with this rate.
- Success – whatever it takes. You can either go for initial public offering (IPO), or stay private by convincing your investors, or even think of selling your company to another. While you may or may not have succeeded in making the world a better place with your start up, always think of striving for success by taking your startup to a position where it leaves its mark in the world of business.