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People born in the 80s and 90s used to talk about how companies like Google or Facebook were founded as start-ups by young entrepreneurs in their home garages. In this concept, it wouldn’t be a lie to say that a generation thought of new generation entrepreneurship ideas and lived with the dream of getting rich. Moreover, with the widespread use of the internet and the strengthening of social media, news of million-dollar investments received by technology and gaming companies started to come. It was at this stage that we decided to write about how to build a start-up.
How come some entrepreneurial ideas remain at the idea stage while others reach the billion-dollar valuation called unicorn? Remember, not every American young person gets an idea. After all, not all of them become dollar billionaires.
In this context, we will present you a small and understandable guide based on the basic definitions we need to know and successful entrepreneurial examples. After all, you may have a startup idea in mind that has a high probability of making serious money in the future. In order for this idea to become valuable, it needs to go through certain stages as a brilliant initiative.
At this point, let us remember that after the global financial crisis in 2008, when even the big companies, also known as flagship companies, went bankrupt, new generation technological initiatives started to become popular. In other words, after this crisis, investors saw that even traditional companies went bankrupt and foresaw that the crisis would last a long time, so they started to invest in many smaller companies. The real birth of the start-up phenomenon we are talking about today coincides with those times.
Build a Start-up Stages
People tend to consume more things they need. In other words, it is a bit risky to first come up with an idea and then offer this service or product to people. What we are going to say is that what we need in the first stage is an idea that is innovative and about a product or service that people need.
So, how can we establish a successful start-up with an idea? Our approach here will be, in its simplest form, “an idea that people really need”. By the way, it should be noted that taking people to space for 1 million dollars is also an idea, but we would say think about product-market fit or affordability.
If you want, before giving details on this subject, let’s list the steps of how to build a start-up topic. In this context, the basic things we need to establish a successful start-up are as follows:
- An innovative and need-oriented idea
- A good and solid team
- A small budget
- A software developer in the team
- MVP (Minimum Viable Product)
Innovative idea: Here, people usually get carried away with very exaggerated or unthought-of ideas. This is wrong. At this point, we would like to refer to a famous saying. That is, “Football is a simple game, the hard part is playing it simple.” Let’s take the Uber example. Neither a taxi application is a new and very detailed idea nor is it very innovative to turn a taxi network into a marketplace with software. On the other hand, from a different perspective, this application is an innovative and innovative idea that meets a great need by instantly matching those who need a taxi with those who need a passenger by geographical location.
Build Start-up with Team!
Although such new generation technological ventures can be established by a single person, it is generally recommended to have at least two co-founders. In companies with a single founder, it will be inevitable to encounter the problem of trying to be a single-handed financial and administrative leverage, called bootstrapping. So, what kind of characteristics should Co-Founders have? At this point, we would like to list some of the common characteristics that company founders should have in a few items in the subject of how to build a start-up:
– It is very important for at least one of them to be a software developer.
– It will be useful for founders to have emotional ties from the past as things progress.
– Founders should be idealistic people. Otherwise, after a while, one or more of the founders may suddenly decide to move abroad and quit all their jobs.
– People who have a perspective called standard working hour anxiety cannot be founders. In other words, you will not have a concept of working hours, especially in the first five years while growing your startup. People who cannot afford to work sometimes on weekends and sometimes even at night should not be founders.
Along with these items, other company employees or team members who are not founders are also very important. In other words, all members of the team should be prone to agile work and should know that they are team members in a new generation technology company. In this sense, when forming a team, if possible, including team members who have previously worked in successful entrepreneurs as references will make a very positive contribution.
Wealth Dreams!
Speaking of founders and teams, it is necessary to mention a false perspective that is valid almost all over the world. The concept of startups is known in the world as a type of enterprise that will allow us to become rich in a very short time.
On the other hand, according to research, almost 90 percent of these technological enterprises close at the end of the first five years. In other words, people who see startups as a means of getting rich quickly will neither be founders nor team members.
Business and Revenue Model
The two most important points in the topic of how to build a start-up are the business and income model. In this sense, it should be noted that you should first establish your company in your mind. In other words, you should first determine in your mind what kind of need you will address and through which stages you will meet this need. This is called a “value proposition”. For example, Uber’s value proposition is to provide you with the shortest way to reach a taxi service. After this, we recommend that you create a “business model canvas”. Business and income models are two indispensable concepts for a star-tup.
For example, you should decide whether you will offer a software service as Saas or whether you will bring together the buyer and seller of any product or service as a marketplace in an application. In other words, after finding an idea for a need, you should establish the most appropriate business model to bring this idea to life. At this stage, it is possible to receive professional or amateur services from mentors or consultants.
As an integral part of your business model, you should also establish your revenue model. In other words, you should ask yourself whether you will receive a membership fee from everyone who becomes a member of the application or whether membership will be free but you will receive a commission on the service.
For example, the food order applications have designed a revenue model of receiving a certain commission from the restaurant for each meal order. In other words, downloading and using that food order apps is free for you, but owner of the food app will pay a certain percentage of this order fee.
MVP and Start-ups
Speaking of how to build a start-up, we should mention the concept of MVP (minimum viable product). In other words, if the idea, value proposition, business and income model in your mind are complete, it is time to bring your service or product to life. At this point, the most important point for the product or application you will make is to bring the least functioning product or application to life with minimum cost. For example, before producing a car, produce a bicycle. After that, they say produce a motorcycle and finally a car.
In other words, design a product as simple as we said in the demo and present it to the users. This is called MVP. Then, shape your product or app according to the feedback from the users and finalize it. If you aim to develop a perfect product or application from the very beginning, you will probably have to spend a very long time and a very large budget. In this sense, if the product fails, you will have wasted both a lot of time and budget.
On the other hand, when you produce a simple MVP product or app with a small budget, if it fails, you can pivot, that is, change the product or service and redesign it according to customer demand. Having at least one software developer among your founders is also very valuable here. If you are the one making the software, creating or changing it will be relatively less costly. However, if there is no software developer among the founders, having such changes by external software developer will be very expensive.
If you follow these steps in order in the start-up establishment guide, it is possible to achieve success.
