Turn into a unicorn
These are the six tips for business owners. You might believe that the startup situation is bad, but it’s just the way things are. The good news is that this list is largely exhaustive. Congratulations, the business should be in fine shape if you follow these ABCDEF tips.
1. A Product users actually desire
Making “what people genuinely desire” is, in reality, the most crucial thing you can do as a business creator. You may be a fantastic spokesperson for your business, very excellent at raising capital, and even technically astute, but if you don’t create a solid product that fills market demands, you won’t be successful.
Find a solution to a challenge you’ve personally faced if you’re still looking for inspiration. In this manner, the product will be needed by at least one person (even though that person is yourself). Being a member of your target market has the added benefit of allowing you to automatically get certain market insights.
It’s crucial to remember that you must go swiftly from “serving you yourself” to “fulfilling the needs of others.” And you must first get to know these folks in order to understand what they want. Do they like what you’ve produced thus far? Why not, then? Even if it initially reduces the scale of your firm, try to communicate with your users as often as you can. In actuality, none of the businesses I am aware of consider their user communication to be “too much.”
On the other side, you must be receptive to your ideas since good ideas never stop developing.
The user may so serve as your signpost at times. There is no other way to ensure a start-up is going in the right direction in its early stages than to develop a product and maintain ongoing user communication.
2. Be focus
The most successful entrepreneurs are constantly, almost fanatically, focused on their products and users. Top businesspeople don’t have other things taking up their time.
I’ve identified a few areas below where founders’ focus is prone to wander.
- Coffee with investors, discussion with potential buyers, and socializing
- Find consultants.
- Spend a lot of effort on PR before you conduct actual work.
- Create collaborations to potentially attract additional people.
- Focusing on social media exposure
- Participate in relevant networking events
3. Calculate growth
Scale is a logical outcome and a gauge of whether the first two things I mentioned are truly done. If your growth rate is reasonable, let’s say 10% per month, the business is going in the correct direction. If not, either you are not sufficiently focused, or the business is not acting appropriately.
What you measure, you make.
You must decide on a goal number for growth before concentrating on moving in that direction. Revenue is the best metric, too.
By concentrating on growth, you can avoid succumbing to “denial of reality,” one of the major crises for businesses. When a business faces challenges, entrepreneurs always judge the situation in a way that ignores reality.
For instance, business owners frequently contest the errors they committed. They also dispute the idea that they waste time on unimportant activities. “Denial of reality” is a startup killer that is essentially invisible. However, if you can concentrate on “growth,” you won’t be able to refute it outright because the fluctuations in the data speak for themselves.
Of course, I have nothing to say if you disagree that it is necessary to concentrate on growth objectives. “We’re not going to focus on expansion right now,” founders frequently state. That is accurate at times. But you can probably guess what will happen when you hear founders say that frequently.
4. Determine if the business has “default survival”
It is insufficient to maintain growth. Even if the business grows quickly, it will eventually fail. For instance, you won’t be able to raise money if you spend all of your money.
Whether you are experiencing “survival by default” or “death by default” is the crucial question.
“Default survival” means that you will reach the break-even point before losing money if the company’s spending stays the same and its income is stable at a particular rate of growth. “Default dead” on the other hand says you can’t.
Asking this has the advantage of letting you know how a firm is performing as well as jolting the founders out of their denial-induced complacency. Another fact they frequently dispute is that “the money is running out.”
5. Expenses should be kept low
Why do new businesses go bankrupt? because the cost is excessive.
Since salaries are the primary cost for startups, going over budget is the same as “hiring too many employees.”
Making a product that no one wants is the major error that entrepreneurs make in the first stage. The error in the second stage is “hiring too many staff.”
Overhiring has the effect of reducing your margin for error. A corporation has less time to generate a profit the faster it spends money. Startups can take longer than you might anticipate since they are frequently led by inexperienced entrepreneurs who are undertaking unique projects at the same time.
It’s actually a fatal combination since you assume you’ll need to raise more money while the business still has a “ugly duckling” appearance if you run out of money before getting things done. Thus, even if you’re on the proper track, it can appear to be “not a feasible model” at this point, and investors typically dislike businesses like theirs.
As a result, you must be extremely careful to avoid “burning money” when raising funds. When making a recruiting decision, consider the pessimistic scenario that could develop in the future. For instance, completing tasks takes more longer than you might anticipate. Startups are prone to “unforeseen problems,” if there is one thing that is predictable.
6. Facts about raising money
It becomes contentious when a start-up attempts to collect money. The following rounds were even more challenging. Entrepreneurs with excellent seed/angel melt always believe that the same is true for series A, but the reality frequently proves them wrong.
When you need to raise a Series A, it’s not as simple as going to an ATM to get your funds once more. When investors inquire about the company’s present state, they will find out that progress is slower and that more money is being spent. As a result, their odds of reaching Series A were extremely low and that, in order for the firm to continue, significant change was required.
The viewpoints of Series A investors and seed investors are different, which many entrepreneurs are unaware of. Series A investors focus on the company’s financial performance, whereas seed investors assess “hope.”
Investors are concentrated on large winners. Therefore, people won’t want to vote for you and might also be willing to pay a premium price unless the company clearly demonstrates a route to victory. They won’t invest even if the business is going in the correct direction since it is still transitioning from “hope” to “performance.” Whether a startup is halfway on the right route or on the wrong path doesn’t really matter to them.
Finally, if you create a product that customers actually desire, concentrate on increasing customer satisfaction, ensure that the company has a good growth rate, and avoid overhiring, then you will have control over your future. You know, not many people have this ability.