Having plans to start-up a business sometime soon? Wonder if your business idea would click? What should a business plan look like to attract funds from investors? Startups like farm house and amazon have found right answers to these questions: they are powerhouse business firms today.
So, secrets below give a brief picture of the prime success factors behind a stellar start-up. doodleblue unveils these secrets for you to read!.
Secret 1: Identify the need and don't stop with just that
Some people had cars which they wanted to rent out and there were many others who were eager to use rented cars . One startup identified this need and it's valued at $6 billion dollars today. Guesses? Yes it's Uber .
Uber never stopped with that. It marketed itself very well. Its strategy: to deliver quality service to consumers even with constraints like traffic. Their ‘Cat delivery in San-Francisco Ad’, was a big hit amongst the masses.
Like what Uber did, the first secret is to see if your business serves a strong need in the market place. If there is a strong need, it would mean that your idea would cater to a strong customer base. Do You think you have a strong customer base ? Then reach out them by marketing your idea well.
Secret 2: Want to paint something big? Do it step by step
“Provide financial freedom and economic well-being for everyone, by balancing personal finance in favor of the consumer”. Sounds big ? Nerdwallet, an American information service is on its way to achieve this vision statement How?
Nerdwallet began by building comparison tools for credit cards that gave comparision of value-add-given by credit cards offered by banks. For every new customer a bank got from Nerdwallet, they paid the firm a success fee. After credit cards, Nerdwallet moved to giving information about accounts (current, savings,CD rates), then to mortgages (mortgage rates, guide, cost of living calculator) and now to insurance (car, health and life insurance).
Guess what? This step-by-step expansion helped Nerdwallet get a $64 million funding. And, for every product of Nerdwallet there are about a hundred thousand subscribers.
So, one step at a time would help you concentrate and formulate each business plan carefully. By doing this, the probability of success would be higher and attracting investors would be easier. Venture capitalists and angel investors would seek out to such business plans and invest.
Secret 3: Don't be early, Don't be late: Be there on the right time
Friendster, was possibly the first social network. It failed, as it came out in 2002, when only email was gaining popularity amongst the masses. It was ahead of time.
Airbnb, a website for people to list, find and rent lodging. Sounds simple? The firm is valued at $20 million dollars today. It succeeded as it came exactly in the time when people were looking for such services.
Companies with great ideas have failed, at the same time companies with no proper ideas at all have succeeded too. Why? The answer is timing: it determines the make or break factor for a start-up. ‘Timing' is strongly related to ‘identifying the need', so see if there is a customer segment, which has a need for your idea. If the answer is ‘no', it is not the right time to launch your business now.
Secret 4: Learn from others: it will help to handle pitfalls
Jessica Alba: the “ Fantastic Four” actress, had an idea to startup ‘ The Honest Company’. She had the mentoring of Christopher Gavigan, the former CEO of Healthy Child World to help her make this eco-friendly consumer goods company raise $70 million from venture capitalists. Now,the company’s valued at “$1billion”.
Mentorship, will help to handle pitfalls in business and provide an entrepreneurial advantage. Most New York tech firms, especially startups have good mentorship. Mark Zuckerberg pointed out Steve jobs as his mentor and the founders of Dropbox are mentored by Ali and Partovi, entrepreneurs of Silicon Valley. Mentorship can bolster motivation and support start -ups in crisis management. 93% of the startups which have succeeded are backed by good mentors.
Secret 5: Analyze data, avoid assumptions and forecast
Founders of ‘Coffee meets bagel’, the popular San Francisco based dating website found out that exchange of too many SMS and messages amongst users, make the whole aspect of dating ingenuine. So, if you are on Coffee meets Bagel, you get to meet only one new user per day. This, they augmented with the facebook login option: it would filter out matches based on a person’s interest. Proper analytics of web-site data made them take this step and today they are a successful firm.
Data refers to everything about business: footfalls, sales, demand for your product, the profit made reviews about your product and so on. So, all these numbers have to be tracked properly right from the day one you start the business.
Carefully analyze these numbers and see if they give you positive or negative indications. Forecast and find out what is your business going to look like? Whether it will scale up, sustain or fail. Avoid assumptions with data, as they might lead you to take improper decisions. Many startups have failed because of assumptions at various levels of data analysis and forecasting
The secret of secrets
Max Levchin failed with four start-up ventures. He never gave up and today we have PayPal. With respect to startups there is a famous quote -
‘There is nothing wrong in failing more than once'.
So if you are one of those entrepreneurs who has an exit plan, it should be your last resort. Handling hurdles and overcoming them is one trait which an entrepreneur has to develop and enhance in order to survive and scale up the start-up ladder.
Collaborator: Gautham Bharathi