Getting a startup off the ground should be exciting and challenging. But above all, it should set the foundations for a strong and successful enterprise. Startups can expect some highs and lows along the way, but what else should you expect in the first three months and what bumps can you avoid?
The first three months of a startup are often cited as the most important of the business cycle. Make a mistake here through poor development or bad team building choices and things can get off on the wrong foot. For startups it means doing homework on markets having all the legal documentation and trademarks sorted, and of course sourcing funding too.
For any tech startup to succeed it must have a clear vision for its product or service. Take Luckypantsbingo.com as an example. Since launching in 2013, it has offered some of the most innovative bingo games on the internet. For it to stand out from the crowd (it began in an already crowded marketplace) meant it concentrated on the resurgence of bingo, but also added online Lucky Pants Bingo scratch cards. Identifying a market for scratch cards within the bingo market has been vital in its growth. So too is constantly updating content in its arcade, bingo and online gaming lineup to maintain customer interest. It shows how a company understands what its customers want and sets about providing a platform for offering it to them. Other startups can take a lead from this too.
Month 1: The Big Idea – Do Your Homework
The first month isn’t about having a product polished and ready to go. One big mistake many entrepreneurs make is trying to do too much too quickly. The first thing to focus on is getting an idea incubated. Finding evidence that what you are building is wanted and needed by customers. Working on an over-engineered solution to a problem that isn’t really a problem will be an exercise in failure.
For Alice Bentinck, of Entrepreneur First, “it’s better to have finished product that people want, than business cards, a logo and a functional start up, with a product no one wants”. And it’s not enough to just recognise that your product will have customers, you need to identify the correct price point too for it too.
Month 2: The Legal Stuff
After realising the idea and researching the market, ask yourself ‘is it viable?’. This means establishing your name or brand. Domain names and company names should be a match and any trademarks should be established.
At this point, it is better to tell as few people as possible about your idea, until you have all your legal protections in place. Some businesses find it easier to have all this work completed by a legal profession, rather than going it alone.
Month 3: Company Growth & Funding
After doing your homework, generating your idea and establishing where your product will sit in the marketplace, there’s a good chance that money will be tight. Funding is hard to come by and hiring staff is a luxury. But when you need to focus on growth, you’ll need to hire employees. Unfortunately, the tech scene is a growing arena and finding someone affordable with the right skills and attitude can be one of the most difficult parts of growing an business.
One way of being successful in this aspect is being absolutely honest with potential candidates right from the start. The chances are they aren’t going to earn as much money as they would if they walked in to an established company. Hiring staff means getting to grips with the financials of the startup. Staff expect to get paid and you have a responsibility. Getting an accountant or bookkeeper can help keep a tight lid on money going in and out.
Funding is important and ultimately it is going to be the factor that makes or breaks a startup. Having a clear understanding of what investors are looking for is critical, because not everyone gets the funding they need to survive. Presenting the research, the market viability and the price point for customers are the answers potential investors are seeking. Present this, alongside your vision for the future and your enthusiasm, and investors will come on board.
The tech startup landscape is growing and if you can be sensible with bold plans there’s no reason you can’t hit the fast track for long-term success. Clearly three months isn’t long enough to get a full grasp on a tech startup. However it is enough time to establish all the parts required to get an idea off the ground, prepare it for growth, hire staff and be ideally situated for investment opportunities.