Starting a business can be an exciting but nerve-wracking process. Every one of today’s biggest companies started out on the ground floor, and they were often led by people who were unsure about their future prospects.
Google co-founder Larry Page chose to stay in graduate school for the entire year after the company started. Steve Wozniak, Apple co-founder and well-known technology entrepreneur, continued his career at Hewlett-Packard until April 1976 because he was hesitant to give up a ‘safe job’ even after developing the now-famous Apple computer.
Hedge fund manager and venture capitalist James Altucher writes how he stayed at his full-time job for 18 months before moving on to his first business. It sold for $15 million dollars.
The above anecdotes show that even for some of today’s most successful entrepreneurs, the path to a thriving business is often not an easy one. Starting a venture requires hard work by talented people everyday who are willing to commit emotionally, technically, and often financially.
What Should I Know About Launching a Start-Up?
As more and more people look to launch a startup, there is no shortage of advice for prospective entrepreneurs who are interested in becoming successful. Keep reading for a list of the top 5 things you need to know before launching your startup.
1. Competition Is Good: James Altucher says competition is good because it shows you have a solid business model. According to him, the key is to simply outperform the others. Before launching any startup, it is vitally important to understand who you are up against in your chosen industry and see if you can determine where the industry is going.
Some of the most well-known businesses thrived because leadership was willing to second-guess themselves and make adjustments to the business model, or even go in a totally new direction if they thought the startup would not work out. Some people think that lowering prices will attract attention, but it is usually not worth it. Rather, premium prices can give the impression that your product is worthwhile since it seems like it is high quality. This can actually help some startups rise above the competition.
Not every idea is going to be successful, and it is important to make adjustments and scout out the competition instead of wasting time on a model that is treading water.
2. Simplicity Is Key: A lot of people think their startup has to unveil a fancy product or complex gadget in order to rise above the competition and make an impression in the buyer’s mind. The most successful startups often did the opposite. The iPad is a complicated product to make, but just about anyone can pick one up and start tapping on the screen.
About 94% of people stop using products because they are too hard to use. Keep products simple. Products are usually successful when they can solve a problem and are personal. Before launching a startup, make sure that your physical or digital product(s) are simple and impactful.
Payments are another area where simplicity is key. If people do not have an easy way to pay, they will not buy a product. Make sure your preferred payment system is easy to use and institute before the startup launches, or else you might really struggle.
3. Make Decisions Based On Weakness: Good mentors and advisors can greatly boost a startup. You might not have enough capital to hire someone before launch, but even a trusted friend or confidant can be a good person to bounce ideas off. Many startups fail quickly because team members do not understand or are not willing to confront their weaknesses.
You should be looking for people who are good at the things for which you are not and you should try to find advisors that have expertise in areas you are not as well educated. This is especially important if you are entering into a new industry or looking to run a business in an area you have little to no background.
4. Marketing Goes Hand In Hand With Startups: Concepts like Search Engine Optimization (SEO) can seem a bit watered down by self-proclaimed ‘gurus’, but having a grasp on marketing is vitally important before launching a startup. You should have an idea of who is your customer base, and more importantly, who is not, before starting a company.
A lot of startup team members think they have an idea of who to market to and then end up just wasting money and getting nowhere. You might have to go out and interview people, pass out surveys, or even recruit beta testers for a basic product, but this type of work will save you a lot of time and money once the actual startup gets off the ground. Once things get going, then you can use this type of information to further attract people to a website or app, or get them interested in actually buying a product.
5. You Can’t Claim Ignorance When It Comes to Laws and Regulations: Before starting any business, it is important to have a strong grasp on any regulations and licenses that apply to your work. Not complying can see even the best startup shut down in an instant. It is usually prudent to speak with a business transaction attorney when it comes to taxes since there can be a lot to digest when it comes to potential write-offs and taxation structures. Make sure to obtain all necessary licenses that are needed before actually starting your business. Working on a startup is a difficult job, and you need to make sure administrative details are settled from the start.
A lot of people involved with a startup will say that you learn the most lessons while on the job working. Starting a business is a big commitment and a lot of work, but it can be very rewarding and a great way to showcase your talents and passions. Before launching a startup, keep the following pieces of advice in mind as you plan out your business plan, strategies, and visions for the future.