Every entrepreneur wants to build a successful start up. Startup is always uncharted territory which requires multiple elements to play at the same time. Mere idea won’t do the trick but the execution is the key. Every start up life cycle is long and involves couple of years. It goes through the transition of stages which require different techniques, adaptability, flexibility and motivation to continue irrespective of situations. A startup is bound to make mistakes and lose out on valuable time, money and efforts. However there are some well tested parameters which should be considered while being on the journey of your start up.
Parameters for a successful startup.
Choosing a right idea – Choosing the right idea will depend upon how well you fit in to a matrix marked by need, existence, competition scalability. When you put each of the idea in this matrix it will throw the results and will tell you the forth coming story. It would also help you to do your own SWOT analysis. Every idea has to be researched extremely well and enough time should be spent on various aspects. start up should not be started with half hearted mindset because it results in half hearted efforts.
Market research – This is an extremely critical step and the research has to be in every aspect of the business. It should cover elements like idea, product need, market and its segmentation, competition, scalability , potential geographical spread. The final goal has to be to make money and each of these factors will determine the capability of generation of profits.
The purpose of doing the start up – The most critical question an entrepreneur need to ask himself is what is the purpose of doing the start up. Is he doing it as valuation game or he is trying to create a sustainable and profitable business. The answer to this question will mostly decide the time frame to which the entrepreneur is willing to give to the company. Based on this question the company takes the direction and even the decision making in next few years will be driven by this.
Selection of right core team – No start up can survive without right core team. Mere good idea can not take the company to success. It is very critical that the core team also shares same value and believe in idea. In the initial stages the team requires lot of patience and perseverance. Startups are all about the informal set up , multiple hats business and the core team should be in sink with this. Each and every team member should not only be the best in his function but he / she should also have leadership qualities. They should have good inter personal skills.
Financial planning with a focus on value creation. – As the startup move from idea onwards it raises multiple rounds of funding. Every funding round is based on the financial budgeting and goals to be achieved. While financial planning is done meticulously but the a great thought should be given as to what will be value addition between two rounds of funding. The goals in terms of product , market, sales, expansion should be clearly articulated. If the desired goals are not met even after spending the money then company will not get the desired valuation for the next round. This would result in excess dilution.
Ability to pivot -Start up do face a situation where original idea may become obsolete or becomes difficult to execute. It takes a lot of courage to do a pivot where entrepreneur has to move away from a original idea. However the same has to be based on multiple factors since one never gets a second chance for pivot. Not being able to pivot at the right time turns in to a big mistake which can become a failure.