How to Build a Startup That Will Bring Success
- 60730 views
- 7 min
- Apr 22, 2022
Many of our clients are startup owners, so we have analyzed their ups and downs and decided to write an article on how best to launch a successful startup. At RubyGarage, we use Ruby on Rails for startup development, as it is a very startup-friendly framework. However, creating a startup is not as easy as you may think, so we have written a brief list of recommendations for those who are seriously thinking about becoming a startupper.
1. DEVELOP YOUR IDEA
Developing an idea and launching a startup is a laborious task. You need to take into account many factors to make a startup effective. The main aspect is to display your vision of the startup through the needs of people. This is just as important if not more important than a business plan. At the same time, you should identify your startup’s motivation and purpose. Pay attention to your competitive advantages. The main criteria for a successful idea are durability (value over time, or long-term importance), trustworthiness (possibility to defend it), and sustainability (ability to produce long-term benefits).
At this point, you’re ready to create a startup. But where should you get your idea for the startup? We have identified several methods that can help you find a great startup idea:
- Think over what you or people close to you lack. A great example is Glen Tullman and his company Livongo Health that uses cloud technology to help people manage chronic illnesses, starting with diabetes.
- Consider modernizing one of your hobbies. Shabnam Mogharabi always wanted to tell stories that would change the world. Now he heads SoulPancake, a growing spirituality-focused media empire in Los Angeles with annual revenue of $3.9 million in 2014 and three-year growth of 3.044%.
- Find markets that have not yet been noticed by existing companies. This technique is typical for established professionals who are already involved in developing an existing business. Bai Brands used its imagination in combining ingredients, including organic coffee fruit and white tea extracts, and earned $100 million in revenue in 2015.
- Focus on developing within a new thriving sphere. In a thriving sphere, existing companies are generally not able to handle all the demand. For example, let’s take the pet industry. The Seattle-based startup Rover.com has been regarded as the Airbnb for dog sitting. Greg Gottesman and Philip Kimmey founded Rover.com in 2011, and its net worth in 2021 was $1.4 billion.
2. EXPLORE THE MARKET
Understanding your market is key to success. If you do not understand particular features of your chosen business sphere, your efforts may be in vain. Stay within the area you know. Remember to assess consumer needs. Our A-Z guide for conducting market research will help you find the right niche.
3. BE FAST
In their interview with Business Insider, the leading internet entrepreneurs Kevin Ryan, Thomas Gensemer, Marc Andreessen, and Mark Zuckerberg mention speed as one of the main requirements for startup success. Reacting fast to changing market needs is crucial for a successful startup.
4. DON’T FORGET ABOUT DETERMINATION
Realizing your own project will take a lot of effort. The chances of building a successful startup depend greatly on your determination and willingness to continue until your business becomes profitable, as well as on your ability to overcome difficulties and to cope creatively with your competitors.
5. BE CREATIVE
Unusual thinking is also essential for getting investment and starting your business. A great example is Airbnb, whose first object of the lease was their room with air mattresses. Airbnb has displaced many established companies in the hospitality industry and has earned billions. Don’t be afraid to go beyond generally accepted business schemes! It is about you and your uniqueness!
6. THINK ABOUT THE TEAM
The number of people on your team should not be too large.Those who are on your team should be motivated to create value for your company. It should be the right people with the same drive and deep knowledge. A vision for the future should be more important for them than a high salary and bonuses. Saul Klein, founder of Kano Computing, distinguishes three types of perfect startuppers:
- A person who understands how to build technological systems in order to solve problems.
- A person who understands the human factors hidden by problems and knows what it takes to solve them.
- A person who knows how to reach people whose problems need to be solved.
7. VISUALIZE BUSINESS ORGANIZATION
The basic issues you need to pay attention to are:
- Your business registration
- Legal advice and accounting support
- Building an effective financial model for your business
- Building a startup business model
Moreover, at the initial startup stages it is vital to determine how exactly you will turn your idea into a real product. Doing so will help you minimize the risk of failure and avoid making incorrect market assumptions. Check out this four-step product discovery guide to match your product idea with your business goals and the current market needs.
8. DON’T FORGET ABOUT RISKS
Risks are natural companions of any new undertaking. They should not frighten you or hamper your development. In general, a startup can face several risks.
1. Market risk
Is there a market for your product? Is your product necessary for somebody? Will people pay for it? Answering these questions is one of the main tasks you should complete before releasing your product to the market. If you answer yes to these questions, your business has a higher chance of success.
2. Product risk
Another top priority while creating a startup is to identify your product, its features, problems that are solved with its help, and its investment potential. If you are unable to identify these parts of your product, that may point to decreased customer interest.
3. Team experience risk
One person cannot cope with all of the risks by himself or herself. That is why team creation is so important. You should build a team of professionals who have enough experience and knowledge of the business area to develop ideas concerning the product's development, bringing it to the market, etc.
4. Financial risk
Most startups require investments to get up and running. At first, funds can come from your friends, family, angel investors, and venture funds. It’s necessary to identify business boundaries when you’re searching for new investments. Your potential investors pay attention to your ability to articulate a business plan and your ability to reach each new stage of development successfully.
5. Risk of copycats
There is always a risk that competitors will copy your product. This is a particularly salient issue for the IT industry. It is easy to give your idea away while searching for investors or executors. It is also possible for competitors to take your idea if the development moves slowly.
This list of risks can be continued. Nevertheless, risks connected with your startup are not issues that can’t be handled. There are always ways to manage them. One way is to build a minimum viable product, or MVP, the essence of which is to develop your idea just enough so that you can validate your assumptions through customer feedback.
It is important for any company to create the simplest version of its product to collect initial data about potential customers. The main benefit of the MVP process is that you will not have to spend much money to determine whether there’s a market and a target group for your product. An MVP eliminates risks of uncertainty surrounding your startup.
Our specialists know how to build a minimum viable product and are ready to help you. Even if your first try creating a successful startup is not as rewarding as you expected, don’t give up. Remember: the RubyGarage team will stand by you!
Subscribe via email and know it all first!