May 24, 2019

Startups are hotly in trend. Enterprising people with teeming ideas are getting encouraged to transmute their scattered ideas into well-structured startups. And yet, one burning question that lingers among many startup enthusiasts is how to go about with a startup idea?

In this article, we try to address this very question. Pranjal Konwar, COO, IIM Calcutta Innovation Park, lays down a stepwise plan right from conceiving a startup idea to executing it.

Look for Problems

Your friend has started up and has even received a handsome seed fund. May be, you should think of a startup idea too, right?

Wrong.

Never look for startup ideas. When you do so, you might fail to add value from a market point of view. Rather than head scratching for a startup idea, start spotting problems. Once you know the problem, you realize the need for a solution. And once you realize the need, you can think of a solution. Voila! You just came up with an ingenious startup idea!

Remember, it isn’t enough to innovate a solution that isn’t solving a problem. So, before starting, ask yourself what problem can your idea resolve.

Uber Cab could taste phenomenal success because it managed to address a genuine problem. Booking an online cab used to be troublesome, relatively expensive, and unpredictable in terms of availability, and had no features for tracking the driver. Uber Travis Kalanick took an accurate stock of the scenario and decided to design a user-friendly mobile app that promises a hassle-free and pocket-friendly ride.

New or Evolutionary? Define

Startup ideas could be segregated into two categories: New & Evolutionary. Define your startup idea. Is it a breakthrough innovation? Or an evolutionary one, a bettered version of the existing product/service?

Look up the internet to see if your idea has already been executed by someone else. If yes, don’t get disheartened. Work up your mind for ways to metamorphosise the existing solution. You may come across startups who succeeded or failed with a startup idea similar to yours. Study their cases closely. Analyse the reasons for their success or failure. It shall help you in execution.

A startup idea is like one’s baby. You think it’s the best. Unfortunately, emotions don’t work in business. Be a tad more pedantic about your idea. Look for loopholes and improve.

Is there a Need?

While looking for a problem, make sure it isn’t your own bias-ridden problem, but rather a problem that infests a good number of people who shall constitute your chunk consumers. Do your research to confirm whether the problem in question is a problem the people are talking about too. According to the CBI insights, 42% startups fail because they try to ‘tackle a problem that’s interesting to resolve rather than those that serve a market need.’

Make sure your product has a need in the market. But before that, decide on the market and the probable customers you want to target. Conduct a field survey to understand if the probable customers are willing to accept a product/service like yours. Whether your innovation makes sense to them or not. If it does, define the category of those people and determine the segment size. And then try to develop a tentative idea of the amount they’d be willing to shell out for your product. Knowing your market holds the key.

Validate

So, you have done the homework and are fairly convinced about your startup idea. Why not validate the idea with the real world now? This is the time to expose your idea to a small group of potential customers. Make a list of 10-15 people in your surrounding who, you think, could be the potential customers for your startup. Sit for an informal interview with them without making them feel as if you are trying to sell anything to them. Refrain from using jargons. Keep your explanation sweet and simple. Don’t just seek unabashed review from your interviewees, but also take note of their gestures and expressions. Their validation, though informal, will give a fair idea about your startup’s position in the market.

Put in Commitment

It’s human to slow down unless one has something significant at stake. In this case, it should be your time and savings. Hallmark your commitment to your startup by investing a minimum 10% from your savings into it. This shall keep you on your toes for there’s no way you would want your hard-earned savings get flushed into the ditch. You will also assuredly squeeze out hours to dedicate to your startup no matter how tied-up you maybe with your other errands.

Hire a Team

Next comes one of the most important, yet one of the most slackened steps: appointing the right set of employees. A startup environment demands multi-skilled employees who are ready to work an extra hour or an extra day for a not-so-handsome remuneration in the beginning. The right set of employees at the early startup stage can be crucial to a startup’s fate. Decide on the key skills required and hire accordingly.

List down the possible Investors

Now is the time to build the list of the first set of investors to pitch. The most feasible choices at this seed stage are the 3 Fs – Family, Friends, and Fools – and the angel investors.

Build a Prototype

So, your seed funding sources are at place. And you have also hired the right set of people. This is the perfect time to create your product prototype. Prototyping helps pick apart the assumptions about the startup. It enables you to see the usability of your product to the end users and also where it has failed. You can tweak your product/service accordingly. It’s easier to make changes based on feedback at a nascent stage than when the product has already hit the market.

Launch Locally

Who doesn’t want to take the world by storm with their startup launch? Yet, it might be a better bet to stay restrained and make a local launch first. Starting locally is a lean strategy to ensure minimum waste and maximum value for customers. It lets you the opportunity to test launch the product at a small-scale, draw early feedbacks, develop a deeper understanding of the customers, and scale up while focussing on perfecting value for customers.

Legalise

Next most important task is to legalise the set up. Get it registered. Apply for trade license. Open a bank account. Get registered with the DIPP (Department of Industrial Policy and Promotion). If your entity is registered in Assam, apply for MASI (My Assam ID).

Communicate

As soon as you’ve applied for registrations, pull up your socks and go all guns blazing to let the world know about your product. It’s time to make the presence felt everywhere. Grab on every opportunity for public appearance, be it at a seminar, workshop, exhibition, or a trade festival. Leave no stone unturned in participating in celebrated contests or challenges that are of interest to your startup.

Meanwhile, keep following up with your seed investors. Get the money and take off.