Seeing all these startups that started from a garage or a backyard and became a million-dollar (or a billion!) company, it’s really tempting to start one! But the truth is, 90% of startups fail in their first year, as per Investopedia.
A startup’s journey is not paved with gold, it’s rather twisted and full of pitfalls.
But no need to worry! Numerous studies have been conducted on startups, and we now know why startups do fail while others touch the sky.
And in this guide by Huntzen, you’ll learn what aspects you should focus on to build a startup from scratch successfully.
But First, What Is a Startup?
A startup is simply a company in the very first stages. Startups are different from traditional forms of companies in their leadership vs management approach. Startups don’t believe in the centralization of authority, they instead encourage creativity and contribution of all the members of the newly emerging company.
How to Build a Startup From Scratch?
There are plenty of factors why a startup may succeed or fail. It would require a long book to discuss all these factors one by one.
In this article, we will focus on the essential ones that are a must-do to move forward.
Here is how you succeed in building a startup from scratch:
1. Choose the right idea
Pick an idea that is related to something you’re passionate about and want to use to make an impact on the world. That way, you won’t get overwhelmed working 16 hours a day as you’ll be enjoying every little success achieved.
Also, the core of your idea must revolve around making people’s lives easier, not making you rich. To become wealthy you have to fulfill a JTBD!
Oh wait, you’re not familiar with what’s a JTBD?
No worries, here’s a quick explanation: JTBD stands for a Job To Be Done. Every service or product aims to get a customer’s job done and solve a problem. And the right idea for a startup is essentially finding a better way to help people get a job done easier and faster.
For instance, FedEx’s JTBD is fast and safe global shipping, Google is making internet use easier and more efficient, and Meta’s is connecting the world and helping businesses grow.
Find what JTBD you want to help your customers with, and move to the next step!
2. Make a business plan
Unless you and your team have a clear business plan to follow, conflict and chaos will occur, thus increasing failure ratios.
Study your idea and your audience back and forth. Know both like you know the palm and the back of your hand.
Then consider this knowledge and write a step-by-step plan of everything you want to accomplish in the next 90 days for instance.
The more detailed the plan is, the better and more effective it will be. Also, it’s advisable to build the plan by yourself first, then share it with your team and people you know would help make it better.
3. Practice OQP
As we just mentioned, you should share your business plan with people who’ll make it better. If you do that, you’re already practicing OQP unconsciously!
OQP stands for Only-Quality-People.
And in a more detailed manner, you should surround yourself with people that aim to make you do better and challenge how you think, rather than bringing you down.
Practicing OQP is indirect, yet a critical factor of whether you will keep going or not in your journey to build a startup from zero.
4. Manage your budget wisely
The biggest struggle startuppers face is securing a budget to nurture their idea and make it grow.
Whether you’re funding your startup by yourself or an investor is involved, make sure you use the budget judiciously.
You can do that by relying on the 80/20% rule.
In other words, 80% of your funding capital should go to the 20% of aspects that matter the most. The other 80% aspects that only improve quality very little can all share the 20% left .
Note: the 80/20% rule should be a culture in your startup. Always prioritize the 20% things that make an 80% positive impact on your startup and life.
5. Execute the plan & be flexible
Warren Buffet’s famous Noah Rule says: “Predicting rain doesn’t count, building an ark does.”
In other words, having an idea about how to make people’s lives easier doesn’t count, it’s putting the idea into motion that does!
So, execute the plan you already decided on and improved with the help of your OQP network. But needless to say, you’re not walking by a river, you’re actually walking within the river and in counter-current flow!
Don’t expect your journey to be seamless because everything will go against your plan and make your life harder.
But it’s your job as a leader to make flexible adjustments that will help the startup keep going forward against the flow whenever a problem occurs. Don’t be frustrated, keep going and you shall be rewarded!
6. Digital or stay home
It doesn’t matter if you’re building nuclear stations or shipping Pizzas, being present online is not your call to make!
4.88 billion people have access to and use the internet. Among these people, of course, are your audience and potential customers.
It’s a fact that being present online is an exhausting endeavor, but you can practice the 80/20% rule here too!
Focus on the 20% platforms that add 80% value to your startup and increase your inbound lead generation.
While it depends on your startup’s niche to decide what platforms to focus on, we highly recommend working on Pinterest and optimizing your website’s SEO for Google’s algorithms because they’d generate long-term high-quality inbound leads.
Financial success is every startup’s primary goal.
But this can blind many beginners and young entrepreneurs to the factors that decide whether a startup succeeds or fails.
You’ve made the right decision by checking this quick guide first!
But don’t get stuck in the analysis paralysis and spend too much time analyzing and reading about startups!
The best way to learn how to swim is by going to the beach, not reading about it! So, just jump off and build that startup already!
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