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As the title suggests, we've worked with a whole bunch of startups and have been part of some great success stories. In our journey with successful ventures, we have noticed a trend- a pattern even. There are a range of factors that contribute to the overall success or failure of the humble startup business.

So, without any intended order to the following points, here's a brain dump of a whole range of good and bad decisions that startups can make and execute on:

Good: Count the Cost

Generally, the biggest risk to a startup is the actual ability to fund the development of the product. Founders of successful startups always do their research into costs associated with the development of the product, engaging with the right professionals and overall affordability during the sprint to Minimum Viable Product (MVP).

But there's obviously more to a startup than just pouring all the money into development. How will you attend events or conferences to promote it, pay for ongoing development and production support? Be armed with a realistic budget that you can afford and be aware that not everyone can win the startup game. Aim for enough funding to get you to MVP so you can generate revenue, then capital raise.

Count the Cost of Your Startup, Steve Johnson

Bad: Over Capitalisation of Product Development 

Bad startups burn through their cash as the product is built. Being ready to start on-boarding customers but with no cash spare to market the product is not a good place to be in. When the time comes to market and promote, you will need funds to execute sales and promotions as well.

When the time comes to market and promote, you will need funds to execute sales and promotions as well.

Can you reach a greater audience with $100 to spend on a Google AdWords campaign or social media channel? It's possible, but highly unlikely, my friend. And while marketing can be grassroots, there are still development costs, legal fees, travel and not to mention your own expenses and salaries as well.

Good: Being Grant Aware

As in Government Grants. Startups that are developing new IP which can range from technology to retail goods or new processes on manufacturing production lines, could all be eligible for research and development grants which provide startups with an extra helping hand to fund the project.

Startups who have spent $20k or more on new projects can receive almost half of their development and consulting costs back as either tax offset credits or raw cash. International travel, marketing and convention costs can also be claimed under the Export Market Development Grant (EMDG). Understanding these opportunities can really contribute to the success of a business, or at least help it through till MVP. 

Grants can give your business a boost, photo by Helloquence

Bad: Ignoring Feedback

You may be heavily invested in the product you are building, but don't make the mistake of becoming so focused on your own emotional investment you ignore the advice and feedback of those around you. That's not to say that you must implement or make changes every time a comment is made. Instead what you should be doing is listening out for repetitive pieces of feedback, as this should become a consideration into the products road map or marketing initiatives.

For example, if you as the owner of a software app kept being asked the question "what reason do people have to use this?", how would you respond? The realisation here should be that this is going to be a marketing problem for initial launch and needs to be addressed into the platform to ensure user retention. Don't get all defensive; get critical.

Good: Contracting Experts

All good startups operate on the notion that they don't know everything. Getting professional consultants to help is always a good idea.  Good CEOs have a team of experts to help with C-level issues like operations, technology, marketing, finance, and human resources. Startup CEOs don't need to be juggling a multinational firm to benefit from this same high-level advice.

All smart startups operate on the notion that they don't know everything. 

The best and most common example is to get a marketing agency to help you to devise a marketing strategy. You can also get technology consultants to help you find the best tech for your systems. Don't stop there. You can get consultants for finance, operations, human resources, and so on! Consultants don't need to be full-time but working with scalable business advisory firms (BaaS) such as IGNITE Alliance, gives you this option. And just to remind you of point 3, these costs can be covered under R&D grants.

Contract a group of experts to help your business

Bad: Having No Launch Strategy

This is a must when preparing your first iteration of your product. What are you going to do to get this product out to the public? Are you going to generate interest before launch? Will you do a soft launch to test the landscape or will you hit it all at once? The launch is just as important as the first version of the product. You need to reach out to your partner network, to always have the product front of mind, and to take up any offers or opportunities to get it out in the public.

Public speaking, involving friends and family, cold call if you need and consider paying for booths at expos are some great ways to launch. There’s also the power of social media to consider; being involved in relevant interest groups and launching ad campaigns here can be extremely effective to get your message out into the world and target your audience directly in their news feeds.
But of course, don't forget humble print media, business cards, fold up banners, loot bags or anything that can keep your product front of mind. Consider the costs but be clever in your approach. I'm a true believer in the referral network. What can you do to compliment other people's business that in return will compliment yours?

Good: Know Your Marketing Personas

Don't forget to establish some base marketing to ensure the product you are developing has a clear and concise message to support it. You don't need to go crazy on building loads of content, but consider more than just a website, emails and Facebook posts.

It's highly recommended to be able to identify your target personas. You need to know how to speak their language and identify the problems you are solving. Create tailored content, think of the buyer’s journey and make the whole process easy. Again, keep it simple but stick to a plan. Your aim should be to ensure the problem you are solving is marketed everywhere, then be an educator on the subject. In case you have no idea how to create your marketing personas, you can always get a consultant to help you out with that.

Define your marketing strategy and flesh out your personas.

Good: Working Ahead of the Plan

During the initial development phase, control the process with project management such as agile methodology, use sprints and ensure the development team are sticking to the plan (realistic time frames for milestones). Create user narratives so everyone working on the project understands what's in your head.

When working with a development team, don't just assume they are managing themselves and working to a schedule. Stay on top of your deliverables and timeline. 

When working with a development team (which you may have outsourced), don't just assume they are managing themselves and working to a schedule. Stay on top of your deliverables and timeline. Blown out development time-frames can be costly, and it's going to be at your expense.

Don't play hard ball with your team because you may be working with them beyond MVP, setting expectations and culture is important during these initial months and once you have established a good dev team, they become invaluable. Lastly, try not to lose traction with the development goals even beyond MVP. During MVP launch, focus on the product and selling but make time for next sprints and product road map.

Bad: Raising Seed Capital Reactively

So, you're now moving past the pre-seed capital raising stage and you move towards the seed capital raising stage. The decisions you make after this phase can truly be make or break. Evaluate your current position and don't just jump at the first investor who offers you money. Talk to your strategy team or to a finance consultant to help you in this crucial area.

Pick your allies wisely, and to some degree avoid family where possible. Rounds 1 and 2 of seed raising are the most dangerous. Here we see startups making non-strategic partnerships just to raise capital and reduce their own emotional stress towards ongoing affordability. Ensure your seed raising and shareholding contractual terms and conditions have been set in stone and always run them by your lawyer. Keep the interests of the company at heart where possible because the last thing you need is investors rocking your boat because you didn't do any due diligence.

Don't raise seed capital reactively, photo by Christian Dubovan

Good: Look After Yourself! 

To plan and run a good startup business is hard work. Look after yourself along the way. Make good decisions, stay level headed, be commercially savvy but not at the expense of your own personal life and family. There is a big community out there for startups, and sometimes just talking to other founders can really help relieve the startup stress and spark new ideas.

When decisions need to be made that are outside your skill sets or experience, consult with your CXO team or mentors to help you through it. Joining your local startup group or keep an eye out for local meet ups are always good ideas.

Hopefully these points were useful. Considering the complexity of creating a successful business from startup to SME, a lot of elements would have not been discussed, so please refer to this article as a reference only, and perhaps some inspiration to keep going.

 


 

If you need more help with your start-up, we're always willing to get you started. Talk to us today and see what you can do to grow your business some more! 

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Topics: Innovation, Consulting

Lisa Andrews

Written by Lisa Andrews

Lisa Andrews, after experiencing adversity in her life, decided to focus on positive momentum, intent on taking part in global conversations to make the world a better place. Having a data, engineering and financial background, she is on a mission to pave the way to give everyone a fair start in life and to maximise human potential. A serial entrepreneur, in 2018 Lisa won the Hunter Outstanding Young Entrepreneur of the Year. She is founder and part owner of several companies that all focus on profit with purpose. Lisa is currently working on projects with Singularity University, the United Nations, ACTAI, the Extreme Tech Challenge, Arm, Treasure Data, 2030vision.com, Ocean Elders, Unicef, EO, GSEA and others. Lisa's focus is on projects that aim to solve the world's greatest challenges using exponential technologies, beginning with achieving the UN Sustainable Development Goals. Lisa is passionate about creating a vision for the world for the next 100 years. In her spare time you’ll find her reading, travelling to exotic locations or kite surfing.

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