Startup Canvas - Guide For Startup Founders

I have been visiting lots of startup events in last 2 years as a speaker and meeting hundreds of startup entrepreneurs. I have observed that most startup entrepreneurs do not know the formula for creating a successful startup. As a startup entrepreneur myself in the past I began researching on the winning formula in startups in 2015 when I visited San Francisco and also in parallel read the book 'Lean Startup'. Prior to that even after running multiple startups for years I was sort of lost in this endless maze of buzzwords and media hyped startups.

Over the last 5 years I have read more than 180 books to research the best procedure for creating a winning startup. As fortune would have it, one of India's most successful startup founders, Mr. Vijay Shekhar Sharma, founder of Paytm also gave me the opportunity to work directly under him and learn from him. I also learned a lot from people in the startup ecosystem whom I had the good fortune to meet while being a speaker at a large number of startup events in India.

After distilling all the knowledge I gathered over the last 5 years, I have created a visual tool to mentor budding startup founders. This tool is called 'Startup Canvas'. It enables a budding startup entrepreneur to learn about the process to follow to create a winning startup. Startups are incredibly complex and they operate in an even more complex environment yet I have seen that winning entrepreneurs like Vijay don't do random stuff. They have learned some best practices which they follow. Learning and following those practices is not possible for a new entrepreneur in short time but my aim is to give a good starting point to a new entrepreneur so that he or she can at least go on the right path and learn the correct things with time.

3 Goals of a Startup

Most budding entrepreneurs dream of becoming a successful entrepreneur one day and having a portfolio of successful products. They also aspire to run a big company with a great culture. Having a billion dollar IPO is another dream which entrepreneurs aspire to. Thus we can label these aspirations of a budding entrepreneur as his or her long term goals for the startup. Media showcases companies like Google and Facebook as role models who have all these 3 but it does not tell the way towards these 3 goals. Thus most startup entrepreneurs are confused like Abhimanyu in legendary Indian epic Mahabharat who knew how to go in the battle but did not know the correct way of coming out.

3 Focus Areas of Startup Founders

As a budding entrepreneur you have lots of choices in spending your time and precious little resources. I have learned that the 3 most areas to focus on for a budding entrepreneur are :

• Product
• People
• Purchasing Power

These 3 Ps are the beginning of our road towards our 3 goals. I have also seen that winning entrepreneurs are good at these 3 tasks.

Product

The startup needs to create one or more products which solves some problems of the user. Without creating a good product which consumers want no startup can grow and become profitable.

People

To create the winning product or products you need to assemble a team which can execute well. Thus any successful startup requires good people inside it and successful startup founders are good recruiters and motivators.

Purchasing Power

Every startup needs money to purchase time of its people and essential resources required to create and provide products to customers. Some startups do not buy stuff using money from investors or founders but they purchase stuff using other mechanisms like ESOPs, crowd funding and barter. Thus I term this purchasing power instead of money.

As a founder focus most of your time on these 3 focus areas. Time and focus are bigger constraints than money. I have seen that in action in Paytm. You can get money from outside but you always have limited time and focus. 

3 Stages of Startup Lifecycle

Search

The first phase of startup lifecycle is ‘Search’. Startup needs to find the problem and some kind of a solution to that problem. A major reason for failure of startups is building products which people do not want. Searching for a problem and creating a solution around that problem helps in providing a strong foundation to the startup for future success. This stage ends when the startup has found ‘Problem Solution Fit’. This stage generally requires just the co-founders to work on finding the problem and creating a rudimentary solution to solve the problem. In rare cases 1-2 employees can be recruited but at this stage entrepreneurs need to bootstrap and big expenses need to be curtailed. 

Build

Once a startup finds a problem, builds some sort of a solution to the problem and achieves problem solution fit it needs to recruit a small core team which can iteratively build a product. This stage goes on till the startup achieves ‘Product Market Fit’. At this stage some angel investors can be approached for a little bit of funding as the startup has something to showcase to them. Product market fit is a stage where the product is so good that consumers want to use the product themselves without much push. For example, once I used Uber for the first time I wanted to use it again and again. That was Uber’s product reaching product market fit. This usually takes time and may involve multiple iterations to the product.  

Scale

Once the product is desired by the market it becomes easy to get money from venture capitalists and big angels and usually it's a good time to scale the startup. At this stage a startup has to transform into a corporation. Many people may need to be recruited and formal structure needs to be put into place. Uber, Paytm etc have taken this route once achieved the product market fit.

Thus Startup Canvas as a roadmap for creating a startup. Over next few months I will be writing more on topics covered within Startup Canvas. Any comments and feedback will be highly appreciated.

Author : Saurabh Jain (Twitter : @skjsaurabh)