December 27th 2019

In this article, we’ll look at a simple process and a few business ideas to get started with your startup.

Startup success factors

According to Bill Gross, founder of Idealab, the five key factors influencing startups’ success are the idea, team, business model, funding, and timing. Among them, timing is extremely important but can’t be controlled. That is why startups often need enough funds to keep going until the business becomes viable.

Among some of the factors that might affect startups’ success over time are timing, team, idea, business model and funding. It’s important to highlight that there are many other factors to take into account.

However, to get started there are a couple of things that we want to get right, and one of them is timing.

Timing matters because if you have a great product at the wrong timing, either you have the financial resources to get going until the market will become mature. Or a strong distribution network able to push through in a market that isn’t ready yet.

Or the ability to transform and influence a whole market (just a few businessmen like Apple‘s Steve Jobs and Tesla‘s Elon Musk have this ability).

Otherwise, you will find yourself stuck in a business that won’t be successful. But how do you know in which market condition are you operating?

Context mapping

Above the innovation matrix from Greg Satell’s “Mapping Innovation: A Playbook for Navigating a Disruptive Age.”

In the FourWeekMBA interview to Greg Satell, he highlighted how there are three core phases in technological innovation:

The discovery phase
The engineering phase,
And then the transformation phase.

When it comes to innovation mapping he suggests to ask two basic questions:

First is, how well is the problem defined? For example, could you define a technical specification for this particular problem? If you can determine a technical specification, well, then that’s a pretty well-defined problem.
And the second question is, how well is the domain defined? Meaning what set of skills do you need to solve this problem? Again, sometimes you can define those domains very, very well, you can think exactly the job descriptions you would use to help staff up a project like that.

…So that’s the power of the innovation matrix is by narrowing down what set of solutions or what set of strategies are best fit to solve a particular problem.

The first step is to map the territory is to understand in which context you are going to operate. For instance, if you are about to launch a startup in the blockchain space, you know this is a space that still has a massive component of technological innovation (as of 2020).

Therefore, business innovation or the commercial killer application that will make the blockchain adopted at a large scale might still be far to come.

In that context, the key customer that can help you scale the business is not there yet.

This means that if you ask a simple question: how far is my key customer from buying my product/service?

Based on the answer, you’ll understand if a market does exist or if it doesn’t. In the latter case, you need substantial upfront funds to create, educate and eventually reach that new market.

In that scenario, asking for funds does make sense because you’re still at the technological innovation stage, but the market is not ready yet from a business standpoint.

You need to make sure to:

Have enough money to survive while the market builds up
Have enough funds to create the new market
Find a use case which is in fit with the current market

On the other side, if you’re operating in an existing market, where there is already a clear customer profile, you don’t need funds, you can bootstrap your idea right away. The market will be your best ally, and customers your best advisors to grow the business.

The general concept of Bootstrapping connects to “a self-starting process that is supposed to proceed without external input.” In business, Bootstrapping means financing the growth of the company from the available cash flows produced by a viable business model.

Business model design

A business model is a framework for finding a systematic way to unlock long-term value for an organization while delivering value to customers and capturing value through monetization strategies. A business model is a holistic framework to understand, design, and test your business assumptions in the marketplace.

Once you understand the context you can map on a single page the kind of business you want to build. You don’t need complex tools or business plans (unless you’re going to ask for investments, in that case, you need a solid business plan and a pitch deck).

Instead, a piece of paper with some key elements of how you want your business to look like will do.

You can map a few key elements initially:

What core problem am I solving? (problem definition)
Who are my potential key customers? (customer profiling)
Where can I find them? (distribution)

Venture capital-backed startups

If you’re starting a company in the AI or blockchain space, there will be more chances you might need to look for venture capital funds.

AI startups

The AI Ecosystem has generated a multi-billion dollar industry, and it all starts from data. Going upward in the value chain there are the Chips (GPUs) that allow the physical storing of Big Data (a dominant player is NVIDIA). That Big Data will need to be stored on platforms and infrastructures that SMEs can’t afford. That is where players like Google Cloud, Amazon AWS, IBM Cloud and Microsoft Azure come into rescue. At large scale, a few corporations control the Enterprise AI market; while nations like China, USA, Japan, Germany, UK, and France have widely bet on it!

Blockchain startups

According to Joel Monegro, a former analyst at USV (a venture capital firm) the blockchain implies value creation in its protocols. Where the web has allowed the value to be captured at the applications layer (take Facebook, Twitter, Google, and many others). In a Blockchain Economy, this value might be captured by the protocols at the base of the blockchain (for instance Bitcoin and Ethereum). However, according to blockchain investor Paivinen due to ease of forking, incentives to compete and improved interoperability and interchangeability also in a blockchain-based economy, protocols might get thinner. Although the marginal value of scale might be lower compared to a web-based economy, where massive scale created an economic advantage. The success of the Blockchain will depend on its commercial viability!

Bootstrapping your startup

If you are launching in a defined market you can build your startup with minimum resources, no funding, and primarily your sweat equity. Some domains where you can start right away are:

SaaS startup

Software as a service (SaaS) is a model where a third-party provider hosts the infrastructure and applications and make them available through the Internet. This model leverages on web-based software and on-demand applications that run centrally on the server of the provider, while the company purchasing the service will use those applications based on need and without the upfront cost.

B2B vs B2C

B2B, which stands for business-to-business, is a process for selling products or services to other businesses. On the other hand, a B2C sells directly to its consumers.

Some ideas for a quick launch

If you’re looking for a few quick ideas but low cash investments:

Some business ideas to start with little money are Affiliate Marketing, Infoproducts, Email marketing, Google AdSense, Consulting, Branded stories, Paid reviews, Banner Ads, Sponsored Blog Posts, Members Only Content, Paid Business Directory, Become a Coach, Accept Donations, Charge For ‘Premium’ Content, Sell Your Blog, Build your SaaS, Speaking Gigs, Create & Sell Your Product, Write Tutorials & Guides, Live Workshops, Find Sponsors For An Event, Generate ‘leads’ for other companies, Create a job board, Advertise pages, Host paid webinars, Writing Gigs.

Read: 26 business ideas

Other business resources:

What Is Business Model Innovation And Why It Matters
What Is a Business Model? 30 Successful Types of Business Models You Need to Know
The Complete Guide To Business Development
Business Strategy: Definition, Examples, And Case Studies
Blitzscaling Business Model Innovation Canvas In A Nutshell
What Is a Value Proposition? Value Proposition Canvas Explained
What Is a Lean Startup Canvas? Lean Startup Canvas Explained
What Is Market Segmentation? the Ultimate Guide to Market Segmentation
Marketing Strategy: Definition, Types, And Examples
Marketing vs. Sales: How to Use Sales Processes to Grow Your Business
How To Write A Mission Statement
What is Growth Hacking?

The post Business Startup Ideas To Launch In 2020 appeared first on FourWeekMBA.

This post first appeared on FourWeekMBA, please read the originial post: here

People also like

Business Startup Ideas To Launch In 2020