Decoding a Startup Venture Journey

Introduction

Isn't the thought of starting your own venture is exciting!! At the same time it brings nervousness. For the first time founders, the decision to start a venture becomes even more difficult because of lack of exposure to this world. I hope this article would help you to get answers to some of those questions and to find a path to get answers to many other unanswered questions.

In my entrepreneurship journey, I got to see the startup world very closely. I discovered, there are a number people like me who are either starting up or thinking about starting up their own ventures. Through this article, I am sharing some of learnings from the startup world, so that future entrepreneurs (students / experienced professionals) could be benefited.

Major Phases in startup journey

While you are thinking about starting up, you will hear from many people around you saying - starting up a venture is risky. If that was true, we could have established mitigation strategies to overcome those risk.

There is much larger challenge for a startup venture. That challenge is "Uncertainty". Uncertainty about the product, customers, revenue, profitability, unknown risks etc. This uncertainty brings nervousness to the person. So the real question is - how do you navigate through uncertainties?

If you are able to craft a vision and roadmap for your business idea, it would provide a broader idea about how the future could look like. This will help you reduce the anxiety and nervousness.

Lets dwell into how a typical startup journey looks like. It typically goes through following major stages -

(a) Ideation: At this stage, you have just an idea in your mind or you might be thinking about some ideas. These ideas could be customer driven or solution driven. The customer driven ideas are those where you have observed customer pain points which have not been solved. The solution driven ideas are those where you have a solution in mind however the customer and its pain points are unknown. In either of the case, you would have fair idea about the initial hypothesis to be tested. Considering the uncertainty is very high at this phase, it is better to write down the hypothesis.

(b) Prototyping: In this phase, you would work on your startup idea to build a prototype. A prototype is an early sample, model, or release of a product built to test a concept.

(c) MVP Development: In this phase, you would work on building a Minimum Viable Product (MVP). MVP is a version of the product with just enough features to be usable by early customers who can then provide feedback for future product development. In this phase, you would run field trials to test your hypothesis.

(d) Market Launch: In this phase, you would further develop the product and look for acquiring customers through sales and marketing activities. By the end of this phase, you would have figured out the product which will serve customer needs, have refined the GTM strategy and execution, have operations mechanisms in place to fulfil the customer promise.

(e) Expansion: In this phase, you would further refine your product, streamline operations and look for market penetration. During this phase, the startup would look at rapid growth. By the end of this phase, the startup venture can evolve into a proper business entity. Now we can say that the idea has crossed the startup stage.

Evaluating the startup business Idea

It's really challenging to evaluate a business idea especially at the early stages due to lack of datapoints. Lets discuss about some of the very important factors to consider while evaluating the business idea -

(a) The Problem: You shall think critically about the problem you is trying to solve through the business idea. You shall try and build clarity around - whether this is a real problem or a fictitious one? Challenge yourself whether the problem is specific or not? Ensure that you have defined the customer persona. List down the specific unsolved pain points related to the problem you are envisioning. Identify whether the problem is recurring or one time issue for the user. You shall build as much clarity as possible around the problem. It's better to write down the problem you are solving in clear and crisp manner in a line.

(b) The Solution: Once you have defined the problem, you shall think about what is the appropriate solution to address the pain points to solve the problem. The founder shall define the value proposition and Unique Selling Points (USP) of the product / service.

(c) Market Opportunity: For the problem envisioned, you shall evaluate the market size. You can do a secondary research about the market using websites such as Statista and similar other websites. This can help you derive market size using tops down approach. You shall also do primary research and estimate the market size using bottoms up approach. All these things will be you estimate TAM/SAM/SOM in relevant currency.

(d) The Timing: Once the market size is defined, you shall build clarity around why now is the right time to solve the problem.

(e) The Team: The startup venture could be single founder or multiple founder venture. For your startup venture, you shall identify what are the key required skills. The founding team shall be able to bring those key skills to the table or willing to learn the key skills, if required. Earlier the role and responsibilities of each of the founder is defined, the higher are the chances of success. Apart from skill sets, one shall assess motivation of other cofounders with respect to the startup venture. Its better to create a Share Holder Agreement (SHA) at the time of onboarding the founder. In order to help the founding team for strategic advise and bridge the knowledge and skill gaps, it's a great ideas to onboard relevant advisors and mentors. Based on the requirement and financial budgets, execution team members shall be onboarded. The founding team, advisors and execution team collectively plays key role in steering the startup idea into a successful venture.

(f) The Traction: It is one of the measure which indicates what are the key milestones the startup has been able to achieve. Depending upon phase of the startup, different parameters can indicate the traction the startup is able to gain. In very early stages it could be product development, pilots, leads in pipeline, key milestones on product development etc. As the startups keeps getting matured, very prominent measures are number of customers, revenue generated etc.

(g) The Business Model: One of the very powerful tool to better visualize the startup idea is creating a Business Model Canvas (BMC). BMC is a living document for the startup venture and it will keep evolving as the startup idea progress through.

(h) Finance Model: It is very important to build a finance plan for your startup. It would help you understand how much funding are you going to need over the period of time. It will also help you to get an idea of unit economics for your business idea. The finance plan will also be a living document. As you progress, as you learn through your journey, the founder shall keep updating the finance plan.

Understanding Startup Ecosystem Partners

Incubators: A startup incubator or incubation center is a specialized organization created to develop and support entrepreneurs and early stage business ventures throughout their formative years. Incubator can act as catalyst to propel your startup journey. A founder should research and identify a suitable startup for their business idea.

Accelerators: A startup accelerator supports early-stage, growth driven companies through education, mentorship and financing. Typically they operate on cohort based time bound programs. At the end of the program they conduct a pitch event or demo day to facilitate the fund raising opportunities.

Investors: A startup ventures requires funds to navigate through its journey to develop product, onboard customers, run pilots, operations etc. To meet this need, there are various types of investors who can support you with money in exchange of equity in your company. These investors could be individual investors or venture capital funds.

Finance: Chartered Accountant (CA) plays important role in your startup journey to guide you on various financial activities. Onboarding CA at the initial stages of establishing the startup venture is helpful.

Compliance: Company Secretory (CS) plays crucial role to take care of various reporting activities for the company. Onboarding CS at the initial stages will help you being compliant to complete statutory requirements in timely manner.

Legal: As an business entity, the startup would sign various agreements like Contracts, Service Agreements, SHA, NDAs, Employee agreements etc. The legal counsel can help you craft such documents and help you minimize the risk for the organization as well as you.

Taking the decision to Startup

While the thought of starting up your own venture is very exciting, taking the actual decision to startup is equally tough. This decision making journey could be really daunting for first time entrepreneurs. The decision making parameters could be different for a working professional vs that of Student. I feel the person can try and think on these lines while taking this big decision:

(a) Personal Financial Planning: While taking entrepreneurship path full time, one shall plan for his/her finances for at least next 6 months, even if there is no income from the startup. If family is dependent on you, then the person shall have 2-3 years of financial cushioning, so that event if there is no income from startup, you and your family can live a reasonable living.

(b) Evaluate the business idea: Building a business pitch deck and Business Model Canvas which covers the earlier pointers discussed to evaluate the business idea, will provide better clarity about your business idea. If you are starting up along with your cofounders, this exercise will become even more important so that all of you are on the same page.

(c) Leverage Startup Ecosystem Partners: With thriving culture of innovation, the startup ecosystem is evolving and becoming better and better. You can get in touch with relevant incubators or investors to brainstorm about the business idea. The feedback you received will help you to sharpen your business idea.

Executing the idea

Once you have done this research and planning, evaluated the business idea with best of your understanding - you will be in much better position to make a call to take full time entrepreneurship journey. Once you have started your journey and have hit the road, some of the uncertainties will start unfolding. Hence as a founder we need to keep a learning mindset. We need to keep validating our assumptions and embrace the new realities to make adjustment to our plans.

Please remember everyone's entrepreneurship journey would be unique, so would be yours! Embracing the reality of "90% of the startup ideas fail within 2 years". In case the startup idea doesn't fly, this does not mean you have failed as a founder. You were successful to give it a try!

Wish you all the best for your entrepreneurship journey to be fulfilling and successful...

Disclaimer: This article presents the personal opinions and perspectives of the author. The content is provided for informational purposes only and should not be construed as professional advice. Readers are advised to exercise their own discretion in interpreting and applying the information presented.

Request your feedback about the article. Please comment below -

1. If you have any inputs, suggestions or follow up questions related to the article.
2. If you were able to derive value from this article, please share what was the most important take a way for you.
3. If you could relate to this article, it would be great if you can share your story highlighting what worked well or what were your learnings.