How to create a startup? This is the third question you should ask yourself, but first of all, the two main questions should be: who are you and who made you ask.
You were right, take a piece of paper and write down the answer to these two questions, because when you are in the middle of the growth and problems of your startup, these two answers will be the two pillars that will allow you to move. forward.
Creating a startup requires passion, commitment, dedication, determination and a lot of hard work. Having a great idea is not enough!
Having clarified this first point, what are the steps to follow?
1. Concept and development
The idea remains the starting point for creating a startup, although in the opinion of many, the initial idea is just one of the many hypotheses to be tested in the continuous search for a repeatable and scalable business model.
Leaving aside the approach of copying and pasting existing models, it is good that your idea is innovative and has the characteristics of durability (it is valid over time) and sustainability (it is feasible).
If, on the other hand, you still don't have an idea, there are actually many approaches that can lead you to develop it, but in any case, remember that for an idea to become a business, it has to solve a common problem, to create convenience, discovery. or satisfy a need.
2. Team formation
No innovative idea and no successful company has ever made itself! The difference is made by people and it is people, with their abilities, skills, visions and passions that create extraordinary startups.
Therefore, the skills of collaborators must be carefully evaluated, which must be different in relation to the business model.
3. Choice of business model
Once the team is formed, the next step is to understand if the initial idea is valid and can become a company in which someone can invest.
The summary tool that clearly describes the activities of a company (from idea to realization), the iterations between them and how this creates value, is called a Business Model.
The most well-known and used business design tool to build a business model is the Business Model Canvas (devised by Alexander Osterwalder).
This tool allows you to have an immediate and clear vision of the strengths and weaknesses of your project and streamline the communication, design and problem-solving processes. The Canvas precedes the writing of the business plan, in which only the economic aspects of the company are highlighted.
4. Financing
The need for capital will accompany your startup throughout its life cycle: birth, development, expansion, maturity. Especially for the initial or early stage of the startup, where a product or a sustainable business model is not yet available, but the monthly costs to be incurred with the amount of cash are certain.
Below is a brief description of the main financing channels that can be used in the initial phase (therefore called Seed Round or Seed Capital investments).
- Bootstrap (or bootstrapping): It is self-financing, therefore the Founder's own capital.
- crowdfunding: It is the raising of sums of money mainly through the web channel, with the help of crowdfunding platforms. Crowdfunding is carried out in 4 different ways (Donation, Renewal, Equity and Loan).
- Business angels: They are natural persons (normally former businessmen, managers, consultants, professionals) who invest in exchange for minority stakes. Business Angels can also invest in an informal or organized group.
- Venture Capital Startup: When the investor in a fund Venture Capital (called Venture Capitalist) enters the company's venture capital (shares or shares) and remains in it until the loan matures (3-10 years) or sells the company to another company (exit).
- Incubators: Incubators are companies that offer physical and coworking spaces and some services such as: administrative and organizational services, training, consulting, access to financing and networking.
- Accelerators: it is an organization that accelerates and systematizes the process of creating new businesses. Almost all accelerators invest in startups in exchange for capital.
- Bank loans: granted by banks through State guarantee funds for SMEs, competition or mortgages for new companies.
- Public contests and AceleraPymes: non-refundable state subsidies to finance digital projects for startups that you can find in the digital kit.
5. Foundation of the Startup and choice of Legal Form
Another fundamental step is choosing the corporate model, which for startups mainly refers to public limited companies.
However, for innovative start-ups, it is envisaged that they can be established as a capital company also on a cooperative basis.
Among the forms of public limited companies, the most chosen by Startuppers are the Sociedad Limitada SL and the Sociedad Limitada Única SLU.
6. Minimum Viable Product (MVP)
Create a “Minimum Feasible Product or MVP”, that is, a product/service that has minimal characteristics, but that makes it work.
Put the MVP on the market and have it tested by a specific target of consumers or good customers (early adopters) by allowing them to post feedback. Use tools such as the Validation Dashboard and the feedback received to adapt the MVP to the client's needs and measure its effectiveness.
7. Market validation
Finally, it is necessary to validate customers and verify if the business model is dimensionally scalable (in terms of product, customer acquisition, prices, channels). To do this, it is necessary to start marketing activities and place a limited number of products/services in selected areas of the market, evaluating whether it sells. If sales are high, you have achieved Product Market Fit: Customers express satisfaction with the product because it solves their problem.
The next step will be to provide the market with the right user experience and continue investing in marketing so that demand grows. If customer validation doesn't work, you'll have to go back to the previous phase and figure out what didn't work or abandon the idea and move on to another project.
