How to build a startup?
There are three things you need to start thinking about building a business, or a startup.
Knowledge or domain expertise is critical to start a business. There are many angles, and many opportunities. However, to define a vertical, a slice that can be scalable and manageable, a clear path to the minimal viable product needs to be defined. The MVP, contains specific business functions, critical to the functionality. The technology then adheres to the protocol of the knowledge. Many business partners are identified and gap analysis on the mapping to the features. The domain knowledge needs to be in-house, within the company as to not spend extreme amount of money outsourcing and contracting.
Most companies in the bay area struggle with hiring enough resources to fulfill their projects. The resources are scarce, and the top public companies pay top dollar to keep their talent pool intact. Hence in order for a startup to be successful, the skill is a must to be in-house, so the technology can be fully developed. The gap analysis of the resources, especially within the realms of agile development and RACI matrix allows selective hiring of key hires. If the skill is not there to develop the startup, it dies very quick. The company is just as good as the worst employee.
The initial funding of the startup is critical. The bootstrapping mechanism, where the initial founders come up with the product, put their own money on the line, or spend countless hours building up the product. Much of the time management in the initial phases do not have money involved. The founders don't get paid for all the great work they did. However, this is the best option to keep equity to the founders, without diluting the shares. Once the investors come in, they want control of the company decisions. Everything needs to be justified, however for good reasons. Everyone has stake in the company, and money is critical to build up the business. The investors are sensitive people. Every dollar matters and they want to see results. Another option is to talk with friends and family first, before talking to investors and get proof that the idea has legs and people believe in it. It makes it much more easier to get subsequent fundings in this case. The monthly burn rate is critical because it justifies how long the company can survive. Usually, the founders have to generate money every 18 months.
Go to top.