How to Grow a Startup From Scratch?

When you review the stories of Jeff Bezos, Steve Jobs, and Mark Zuckerberg, they all show up: a garage, a small room, and the first million-dollar check. Thanks to the cinema, these stories ended up romanticizing how difficult it is to be an entrepreneur and everything that involves creating a startup from scratch.

Long before these three tech giants started giving motivational talks for other entrepreneurs, they had the passion for going all the way from an idea for a business to consolidating as a real company with their marketing plan.

That momentum is one of the inherent traits of entrepreneurs. Still, some methodologies can be followed for the rest of the process and make a business profitable, scalable, and repeatable.

Do you have an idea for a business? The seed of a new product like a coupon site or a new service is the master key for entry into the world of entrepreneurs, and today we want to share the key stages you need to follow to create a startup from scratch.

The Idea

Contrary to the days when the automobile or the carbonated beverage emerged, today’s business ideas need to be widely exposed and validated even before you can ask yourself the question of whether that will turn out to be a successful business.

In his book “Startup Playbook” Sam Altman states that an idea for a startup only has two options to be tested. First, there is the way to launch it on the market, and then there is the initiative of trying to sell it to a group of investors. In both strategies, one factor is repeated: exposure to the public.

So if you have an idea for a startup, the first thing you need to do is share it with your partner, family, and friends. They can serve as a good first filter to know if that product or service you want to specify could be attractive to the market.

But then it is necessary to scale that exposure by doing focus groups or launching minimum viable products to be tested among real audiences. Today technology allows you to do it without investing large amounts of money, as we will explain below.

The Validation of the Hypotheses

To create a new startup, it is necessary to test those assumptions that gave rise to the primary idea. For example, before Apple launched its famous iPod, it was necessary to validate that people need to carry a small musical device with them everywhere.

This phase is key in Eric Ries’ Lean Startup methodology, one of the most studied circuits when guiding entrepreneurs to turn their idea into a business that continuously uses innovation.

Only the users to whom the product or service is directed can help you contrast if an audience may love/need or not, that innovation you have in mind.

The Minimum Viable Product

At the beginning of a startup, it is not necessary to bet on building a product or a solution that carries all the characteristics of the proposed idea. It is about raising a first product, which becomes a synthesis piece of the solution that is offered to the main problem that you want to solve with the venture.

The minimum viable product is the tool that allows measuring the viability of the project of the enterprise in general. For its creation, however, there is no magic formula or any specific specialization.

The key is that it is a piece that can be tested by others, especially by those very involved with the market niche that they hope to conquer.

Altman recommends that entrepreneurs take the time to see how the first people to try it use the product. These initial interactions will then become a great source of information to correct faults, improve systems and understand the real needs of the consumers you want to reach.

Metrics

No startup can truly advance if it does not include in its model a set of metrics that allow it to monitor and diagnose its advance or decline.

A classic mistake to avoid during this stage is to be seduced by the numbers that support the acquisition of new users, for example, if it is an application or a service.

For an enterprise to be sustainable and profitable over time, its consumers or users must become recurring. This means that they feel the need to return to buy the same product or require the same service in a pre-established period.

It will be vital for this phase to establish a mechanism to listen to recurring users for this phase. This will allow you significant learning to raise the quality and usefulness of the product or service over time.

Growth

A startup has to resist the curve of the first three years to prove that it is a product or a service of great interest to a group of buyers and to finish becoming a real company.

Entrepreneurs, not in vain, are forced to think daily about how they can use to increase their number of users and their sales.

Those large screens used in the first Facebook offices to dial the number of active users on the social network are part of a key reminder for any entrepreneur. It’s just about finding the element that drives you to think every day about accelerating your startup’s growth.

Thoughts

The management of a startup has different characteristics from other companies and always requires a business specialist capable of doing everything necessary to guarantee profitability.

This, without a doubt, can support them to raise a startup from scratch and create new connections in the business ecosystem.