Worrying is what founders do. You’ve put your heart and soul into your new business; you’re as invested in it growing and succeeding as you would be with your (other) children.
Raising capital and validating your business with potential customers are tough roads that must be travelled quickly in most cases to get traction within a limited cash runway. Especially in the current uncertain climate, challenges facing early stage businesses trying to get off the ground can seem insurmountable. The good news is that although your business should be unique in at least one aspect, most of the common concerns have been experienced many times and some proven steps exist to lighten the load. For example:
1. Am I taking the right steps to get my idea or product validated?
Done well, validation is a journey of experimentation; from a starting point gaining reliable indications that a customer problem is real, through to specific and carefully calibrated measures of optimal product-market fit of your solution down the line. The key is understanding and embracing whichever stage of the journey you are at and making sure you are taking the most direct action to get you to that next stage. Lean Start-up methodologies and tools can really assist here, keeping you focused on real, data-driven customer sentiment. Proper investment in your validation plan can be the most important decision an early stage business can make.
2. Is my solution actually solving the client’s problem?
A digital proposition, in particular, can be expensive to create and launch. You may be confident in the business problem you’re addressing, but you want to know that that your solution actually solves the problem for your target market, before you commit those precious dollars. This means getting something into real customers’ hands. Options to consider include low functionality or manually operated minimum viable products. A digital prototype is highly recommended as a first ‘product’ for B2C propositions; the experience of the real thing at a fraction of the cost and one of the most powerful ways to learn.
3. Do my numbers make sense?
Investors expect to see a strong and coherent financial story for your business to complement a great product and team. A crystal ball is not required (fortunately), but a detailed handle on your costs and runway is a must, as well as a logically constructed view on your revenue projections and growth plan. Just as important as the numbers you present are the assumptions you use to drive your model and the metrics you are actively tracking to manage and if necessary, adjust your plan. Get the assistance you need to put this financial model together and use it as your bible - your confidence and credibility will soar.
4. Am I spending the right amount on branding?
Branding is more than a name – but spending too much here can prevent investment in core growth activities, spending too little could hurt customer traction. Brand is an essential part of your product, the right investment will depend on your market and stage of development and might be framed as the minimum to carry you though to the next stage. Working with a freelance designer that understands you and what your company stands for, can quickly and relatively cheaply produce professional brand assets such as logos, templates, and a distinctive colour scheme to get you up and running. The key is keeping it simple.
5. Who are the right partners for my business?
Not having all the necessary skills and resources in-house can present a real challenge for many small firms. Who you know and partner with is so important to a small business getting off the ground – everything from critical professional services like legal and accountancy, through to advisor/peer networks and relevant investor groups. Who is best placed to help, at the right price, and who can you trust? Do not be afraid to expand your own reach by leveraging the experience and contact lists of experts in the start-up ecosystem as well as your business domain. Following recommendations on the right firms to work with from those that have been there, massively reduces your risk and can avoid some costly mistakes.
Worries will never be far away as a start-up founder. However, as is nearly always the case, the world will seem brighter through a combination of positive attitude and positive action - knowing you’re doing the best you can and taking some sensible steps to give you and your team the best chance of reaching your targets.
Who knows, perhaps you’ll sleep a little easier too…