An early stage of startup development is the most challenging one when it comes to its proper detalization. At least, this is what numerous resources, guides, and experts keep saying nowadays. So as to help you avoid confusion, we have prepared the list of top 10 issues you should certainly solve during startup early stage – and then confidently enter the next period of development and launch.
1. Check your startup idea for viability.
a) Analysis of actual needs present in the target market currently. This is a starting point as far as revenue implies proper, timely, and satisfactory meeting of customers’ needs, and in order to succeed in it, it is crucial to comprehend what contemporary market lacks and what priorities target audience will develop in the nearest future. To complete this task, please, surf credible, pertinent web resources, read periodical media, and communicate with your target audience (if possible; if not – there are always questionnaires, surveys, and similar tools available for better comprehension of situation).
b) Create a Proof of Concept (PoC) on a startup early stage. The prototype built during this process aims to demonstrate overall potential of the startup idea in early stage. Moreover, it is an excellent opportunity to demonstrate expected effectiveness and profitability of your startup to investors, partners, or future owners.
c) Value proposition. Basically, this is a combination of strategic thinking, behavioral psychology, branding, and startup vision aligned with desires and preferences of target audience.
2. Analysis of the market, rival companies, and alternatives of your early stage startup.
a) The market: your area of interest, dynamics of development and dimension. It is crucial to be aware of current situation on the market within the selected niche as well as background of dramatic growth and drastic decay (if any). Learn both contemporary state of affairs and lessons of the past.
b) Influencing factors at macro and micro levels. You need a maximally objective and holistic picture of impact that changes the market and triggers new developments.
c) Rival companies. Analyze to learn on their mistake and prevail them by offering your target audience what has not been offered or has been offered improperly.
d) Alternative solutions. This is essential: remember that your perfect solution can be enhanced in the future by other smarties or even be outclassed by a novice, alternative, solution. Keep an eye on all stages of evolution in your field so as to respond timely and properly.
e) Porter’s Five Forces. This framework provides effective analysis of competitive environment. Its ultimate strength is that Porter’s Five Forces addresses not only current competitors, but also potential entrants of the given market niche and substitute products that may threat profitability of your startup in the future.
3. Choose a business model for your early stage startup.
a) Type of startup business model. Huffpost offers 9 potentially effective business models for a startup, such as becoming a marketplace, a subscription model, the “Warby Parker” model, on-demand model, customization, virtual good model, etc. There are authoritative sources online featuring 50 business models for startups on early stage. It is up to you to choose – yet remember peculiarity of software area and mind you current resources aligned with future development.
b) Check-up at Business Model Canvas on early startup stage. Just do that. This is a fantastic tool offering effective insights for start-uppers.
c) Enhancement of the selected startup business model. Naturally! And keep that habit further on – whatever you do, do not forget to double-check and improve it.
4. Development of business and marketing strategy on startup early stage.
a) Early stage startup business strategy. This is a range of competitive moves you will need to adhere to for attraction of customers, achievement of goals and targets, and strengthened performance. This strategy posits a link between startup purposes and actions needed.
b) Early stage startup marketing strategy. This is a narrower concept. To be more precise, a marketing strategy refers to all the endeavors necessary for transformation of the target audience into actual customers and keeping long-term and mutually effective relationship with them.
5. Identification of available expert knowledge and skills and areas with lacking competences.
a) Define and analyze own expertise, its current level, ambitions and drawbacks. If need be, ask for assistance for evaluation of your skills.
b) Identify team members (current and needed), potential cooperation and partnership (if any). It is advisable to have a team from the very beginning that you can rely on and in competence of which you are sure. You need a maximally clear picture and experts for core aspects of launch of your start-up.
c) Head-hunting criteria. In case your team still lacks some human resources, start head-hunting. Criteria for this purpose should include professionalism, communication skills, and priority of constant self-improvement. The rest according to the field of performance and position.
6. Determine sources of funding and a funding plan for startup early stage.
a) Shares in funding. Yes, you need a funding plan. Yet, be smart and do not leave a major share to investors. We recommend inviting max 30% of external funding at the given stage in the context of future profitability of the venture.
b) Potential sources and alternatives if need be: own money, venture capital funds, business angels, incubators. What is crucial: learn as much as you can about each option, especially consequences and hazards. You should be well-equipped with knowledge when entering such a partnership.
7. Legal aspects to be covered on startup early stage.
a) Rights of ownership and intellectual property. Every startup needs seven core legal documents: articles of incorporation, intellectual property assignment agreement, bylaws, founder’s agreement, non-disclosure agreements, shareholder agreements, contract forms for employees and offer letters. Issues of ownership rights are a serious challenge depending on the number of people involved in the process of development and other related factors
b) Pay attention to details! This is often a key to actual launch. Read, re-read and make sure you totally understand (otherwise, consult with a lawyer) everything you sign. There are no details in official documents, only terms that matter.
8. MVP development on startup early stage.
a) IT consulting. Ensure excellence of expertise and that all the issues are covered (i.e., answered).
b) Development of architecture and future functional potential.
c) Software development + QA. Quality assurance of the functional potential of developed software is crucial.
d) Deployment. This stage covers all the processes (they may differ for each product depending on particular instructions and requirements) aimed to customize the product.
9. Testing of the MVP.
a) Trial target audience. This is a conventional way to receive feedback and see the product in action.
b) Focus groups. Compare efficiency of the product and remember that context often matters.
c) Consequent analysis. Evaluate the outcomes of the trial use, make inferences, and improve the MVP accordingly. It may appear that your product needs more trial testing – in that case, continue its trial use after sufficient update.
10. Completion of preparatory stage for development of a full-fledged product.
a) Creation of actual product based on the improved version of MVP. This is the most responsible stage as far as you prepare the final version of your product.
b) If you are a startup in the software area, the following is needed: development of a customized application with proper startup business logic, sufficient functional potential, relevant design, and enough background of testing and enhancement.
Evidently, the early stage comprises far more than 10 issues to be solved – we have just outlined some core steps to be taken. Nevertheless, the crucial solution to be made is formation of expert team and proficient partners, and choice of a software development company is at the core of this decision. This company should be capable of completion of the holistic software task as well as of contribution to architecture development, planning, constructive enhancement, and provision of timely support. MassMedia Group is such a company ready to lead and accomplish.