Are you ready to know the 7 key processes that will lead you to build your successful startup? Let’s find out what they are and how they are structured.
Our updates on the startup world continue. After talking to you about the strategic roles to have a successful team, it’s time to focus on an equally important focus: the 7 fundamental processes for the Development of your startup.
Structuring them properly or not can determine the success or failure of your startup! But let’s go in order.
The Startup Canvas is the first strategic tool created to structure and model the business model of a startup, through a framework structured in 12 building blocks, grouped into 3 main areas: business idea, strategy and execution. The method for transforming an idea into a sure success “, for the first time, the concept of the 7 key processes is being tackled, successfully applied to the now validated number of successful cases.
Massimo has built this model after years of experience in the sector, the model is composed of 7 key processes for the development of a startup: product development, customer development, marketing, fund raising, team building, intellectual property and the traction.
Here are the 7 key processes
The product development deals with the development of the product, they will always have to adapt more to the cycle of feedback received from customers. The customer development deals with the analysis of the development of customers, by Steve Blank theory and key issues how to position the product on the market, the customer care and market strategies.
The third process concerns marketing, which plays an important role within the startup development , specifically every marketing, communication and branding strategy; every strategy therefore that will allow you to position the startup on the market and to make it grow through lead generation, conversion and retention.
The fourth key process is fund raising or fund raising. It is a fundamental process to support the growth plan of every startup and must be structured through a different collection strategy according to the startup stage. The fifth is the team, and the construction of the team and its organization are fundamental elements for the success of a startup. The execution of each project is entrusted to the people and they are the ones who will take care of the operational part of the process, so we must structure each team with all the necessary figures to operate in a growth perspective.
The sixth point is the intellectual property, important because it allows you to protect your business idea and position yourself in a strong way on the market, in front of your competitors, through the use of trademarks and patents.
Finally, the traction, which is the measure of positioning and growth metrics that will allow you to improve your presence on the market; in a startup it is not enough to have a budget , it is not enough to enter the market, but the rate of growth must also be monitored.
Use The Startup Canvas to structure your startup
From these 7 processes of startup development comes The Startup Canvas with its three areas: business idea, strategy and execution, which are developed through 12 building blocks. Let’s go to explain them in detail:
1. The product development concerns all the technologies that support the development of the product and also include the product-market-fit, the meeting between the supply of the demand and the needs of the customers.
2. Customer development, through the theories of Steve Blank, is all we need to understand which market is suitable, to understand it we need to analyze who the target users are, but also to better understand who the competitors are.
The buyer personas are identified through demographic and sociographic characteristics, therefore a very precise client segment, fundamental for not losing money and not to disperse energy: above all to understand what kind of person has the problem that the project designed must solve.
In this process, we must also understand what relationships are established, because once we define a price and acquire a customer we also define retention, loyalty and the desired referral.
We must understand how to keep the client. In fact, often, the startup rate of a startup is high if you do not work on retention. In this phase, an MVP is created, the minimum feasible product to be validated on the market to evaluate the effective adherence of the product to the reference market (product-market fit).
3. Marketing is one of the key blocks: every startup is driven by customers, this tow occurs only if the product designed really solves a need for a certain type of customer. We need to create marketing strategies to hit the right target and make the product / service known, in fact one of the key figures for a startup is the marketing manager (CMO), or the growth manager (CGO), who takes care of the strategies growth.
The first aspect to be analyzed is the type of market that is being attacked, to understand who the product is useful for and then constitute the buyer personas. Subsequently, branding will be established, or a distinctive identity that will allow you to position yourself and be recognizable on the market.
To start positioning, a startup must collaborate with public relations, newspapers and blogs, also exploiting web campaigns, social channels and content marketing. All elements must be structured in a funnel, the most common being the pirates funnel, consisting of 5 phases: Acquisition, Activation, Retention, Referral and Revenues.
The acquisition of customers can take place through different web marketing channels that will let you know about your product / service and its features. Often you use a blog, with valuable content, to make you become an authoritative source of your industry in a short time and with very low investments.
Activation instead marks the actual use of the product, for example an app that has entry barriers, such as instant data compilation, usually does not lead the user to remain in the platform.
It is necessary to break down every entrance barrier so as to truly acquire the user. Once the customer is activated, he moves to retention, that is to say loyalty and customer care.
Usually the acquisition costs more than retention, for this we need to increase the number of sales for that customer and increase the life time value (LTV) over time. As a consequence of the extension of the life time value, the referral is generated, that is the positive word of mouth, the WOM, due to the customer satisfaction of a customer.
In the book The Startup Canvas Massimo uses an exact parameter for referrals: the Viral Coefficient, which studies how many users are brought into the platform by other users. If it is equal to or greater than one, it means that growth is exponential.
At the end of the funnel we find the revenues, the monetization of customers. The purpose of the funnel is to maximize conversions at every step, and if the metrics show that it is not performing, it starts again with new strategies and experiments, even using A / B Test.
4. Fundraising is also one of the blocks of the The Startup Canvas model, because it is one of the main processes within every startup, necessary to be able to structure a sustainable strategy in every phase of growth. As Paul Graham suggested: a startup should have growth metrics with a monthly growth rate of between 5% and 7%. Without careful planning, we risk not finding the necessary funds to sustain this rate of growth.
5. Team building is the area where the human part is structured, the companies are made of people even before the idea. The team is preferable if it is made up of people who have an important track record that is with an experience behind them. The team is the first thing any investor looks at a startup, it’s more important than the idea itself.
The key resources are: the CEO, who defines the guidelines, has the vision and governs the startup; the CMO, who analyzes the strategies of positioning and growth through marketing. Today there is also the CGO, a mixture of product engineer and innovator that maximizes marketing activities.
Then the CTO, which holds the technical direction; the CFO that takes care of the financial part and manages expenses and investments. Industrial companies immediately show the income statement, while in a long-term startup the income statement may generally be completely negative: it is inherent in startups not to have positive margins in the early stages, but to grow through value metrics, so the CFO works on the metrics of innovation.
The key concept is the alignment of the human resources involved, towards a common vision and mission shared by all these figures.
6. The intellectual property will let you lock down your vision from its competitors on the market, so when you’re going to place you must protect yourself beforehand.
One of the main tools that allow us to protect an idea is the patent. Working on patents, domains, design, brands and lock the idea from the beginning ensures that your positioning makes you unique on the market and above all protected.
7. The last process is the traction, which literally means “quantifiable demonstration of the market demand”, that is the ability to make you know and make the startup unique.
The market is already conditioned by other competitors for this we must always monitor and control the management through precise metrics. The growth and engagement metrics, in the seed and pre-seed phase, are those startups that do not yet have the opportunity to view their revenues, so they can view the number of users or their growth rate.
While for those undergoing early stage billing there are economic-financial metrics.
These elements are essential to build a successful startup, all must be addressed with care, in order to grow with their startup in a sustainable and scalable.
If you want to understand how to best implement the 7 key processes, fundamental for the development and growth of your startup, ask for your free consultation, one of the most important startup coaches and mentors.
Author Bio: The article is written by Melanie Rodgers who is the specialist in content writing and marketing. Furthermore, she also help people and guide that how to appeal and reinstate a suspended amazon seller account. Melanie loves to travel around the world where she captured all the moments and share on her own blog.