Launching your first startup can be an incredibly exciting and scary task wrapped up all in one. For the inexperienced entrepreneur, the thought of starting your own company sounds like it’ll take months, if not years.
That couldn’t be further from the truth, which is why we’re going to run through how to get your first startup up and running in under three months.
Check it out below:
Define Your Roadmap
While you probably have hundreds of ideas about what you want to do, it’s smart to get this out on paper to begin organizing. This will help in deciding on which practicals you aim to hit first such as registering your LLC or establishing your website. Beyond those items will also come your plan for growth, as well as if you have an exit strategy. However, before we dive too deep into the final phases, first we need to discuss how you plan to get started.
Your starting point will be determined by the type of business you’re looking to start, as well as how funding will work. For tech or other scalable startups, that might mean seeking an evaluation, which as noted by QZ have been increasing every year, recently hitting an average high of $20 million; meaning your startup is a great place to land some seed capital. Furthermore, make sure that if you are pursuing seed capital, it’s with a great firm. Muirfield Investment Partners founder Thomas Zaccagnino, for example, is a master of real estate and blockchain tech. Of course, much of this starts with having an MVP (most viable product) and finding your market fit as well.
Do Your Research On Market Fit
Almost all of us have had an idea or two we thought was the next big unicorn. A big reason many of us fall short on developing it? Because while the idea sounds nice, we know deep down there isn’t a practical application for it, which is a major pitfall for a lot of startups. In fact, according to a survey on market fit published by Andreessen Horowitz, 70 percent of startups scaled prematurely, showcasing that finding where your business stands amongst the landscape is more than just data, but knowing how to scale with it as well.
In establishing a market fit, the first step you should consider is asking who is going to use your product and why. This goes well beyond just finding a demographic but rather who amongst that group is willing to engage. As noted in the survey above, scaling too quickly can lead to failure, which is why it’s important to find test markets and build your case from there. A big part of market fit is trial and error, as well as being able to identify if it’s a product problem or how the product works within the ecosystem you’re aiming to enter.
Know How Much Runway You Have
As investment doesn’t come in a day, it’s good to know just how much runway you’re going to need before that cash hits the bank. In other words, saving money to start a business can be a wise move, as you never know just how long it’ll take to acquire funds (if at all). According to the MBDA, it costs an estimated $30,000 to start your first small business. It goes to show that for most businesses (especially those that don’t seek investment), launching can be an expensive venture, which is why it’s significant to run the numbers.
To begin, look at the total costs for your lifestyle (also known as overhead), including items such as your rent, phone bill, health insurance, etc. As it goes with a lot of startups, being willing to take a pay cut is key to extending your runway as much as possible, which doesn’t mean paying yourself short, but rather slightly less than the average competitive rate. If you can balance it, don’t be afraid of slowly transitioning from a contract or freelance role at another job into full ownership of your company when the timings right, reducing your risk. Remember, the goal here is to keep the project up as long as possible.
Keep Up With ROI As You Market
Finally, when you’re ready to take your product live, it’s imperative you get into the habit of keeping an ROI per your marketing efforts. According to Hubspot, 72 percent of businesses that keep track of ROI state their marketing strategy is effective, and for your business, establishing this along in your foundation will be something you thank yourself for later down the road. However, as startups grow at different rates, determining ROI will take some practice.
The most basic way to think about marketing ROI is by taking how much you’re paying for something (for example, a promoted post on Instagram) and then directly tying the return (clicks/completed signups or sales) that you can quantitatively see. On a more complex level, establishing a budget and growth hacking (taking multiple marketing disciplines to see what sticks), then diving in deeper to returns from specific sources is also a smart move as well. Try to run some trial and error with the marketing categories that fit your business, giving yourself the best outcomes to expand on into the future.
This will help in deciding on which practicals you aim to hit first such as registering your LLC or S-Corp, or even establishing your website. What are you most excited about in launching your first startup? Comment with your answers below!
