“You need three things to create a successful startup: to start with good people, to make something customers actually want, and to spend as little money as possible. Most startups that fail do it because they fail at one of these. A startup that does all three will probably succeed.” - Paul Graham
It’s 2019 and you want to build the next big unicorn. Building a successful startup is hard but getting started really isn’t, here’s how you could do it:
1. Find the right people
“Right people” seems like an overly vague term if you think about it but in the startup sense, good people is the founding team of your startup. Generally, tech based startups begin in either of the following ways: a developer builds something he thinks is great and wants to sell it to other people OR someone has a great idea and thinks if they build the right thing, they could sell it to a large number of people. (More on which approach is better later) So good people for a startup will generally mean at least one technical founder - preferably someone who can code. It’s not that people who can’t code can’t start startups, it’s just that being able to build your product yourself will help you in many ways such as building the initial product yourself and knowing how to hire good developers but most importantly, just knowing your product better than anyone else. So yes, you will either have to be someone who can code or you’ll have to find someone who can code.
Successful startups generally tend to have more than one founder, this is because starting a startup is a stressful job and you need more people to share the burden. A co-founder can also bring in domain expertise to your startup that you don’t have. A technical founder and a business co-founder make a great combination, they also tell investors that your startup can both build your product and then sell it.
Don’t underestimate the value of having a good founding team, especially if you need initial funding from investors, they’ll closely look at your team, its background, and all other indicators that predict future success. A good rule of thumb is to go with the Hacker, Hustler and Hipster combo. A hacker i.e a CTO who can code really well, a Hustler i.e a CEO who gets things done no matter what and a Hipster i.e a branding or marketing expert that can build your company brand.
2. Make something people want
This is important, really really important. Making something people want may seem easy on the surface but it’s actually quite hard. How do we know what idea to work on or what to make? Well, a lot of people build first, then decide what problem to solve or who to sell to. A better approach would be to figure out a problem first, something that a lot of consumers face and you know can be solved with what you’re doing. A lot of great products come from founders who’ve personally faced the problem they’re trying to solve or know someone who faces the problem. This immediately sets you up for success in building something people want.
As you build your product, you’ll work more closely on building something that solves your customers problems. In marketing speak, we call this finding the product-market fit. The best way to do this is to talk to your customers. Talk to them and iterate based on your customers feedback. What starts as your idea will eventually evolve into something that people want, this is why a lot of startups end up with a product that’s very different from what they built initially. Don’t get too attached to your initial idea or your initial version of the product; be ready to go into a different direction if that is what customers want. Remember that nothing great ever got built by working in silos and that you will HAVE to get out and speak to people even if you’re not a research/marketing person!
Once you’ve achieved the product-market fit, you’ll be in a much better position to raise investment for scaling your business.
3. Don’t spend a lot
You’ll need to know How to Fund Your Startup first. Once you are up and running, how you spend your money will become very important. You have to remember that the money invested in your startup is just that: an investment, it’s not an indicator of how well you’re doing or how rich you are. It’s up to you to create the best possible product by using the least amount of resources, this includes every single cost from office space to hiring a team. You don’t need a fancy working environment, you need a space where you can optimally work together. A mistake that many founders make which requires a lot of spending is hiring too soon because of a ‘perceived’ need for a certain set of skills. As a founder, you should be ready to wear multiple hats all at once; be a developer, a sales person and a PR person altogether. Unless it gets absolutely necessary to hire someone, use your money differently. As a founder, it's your job to make sure that it doesn’t run out too soon.
Remember: The goal of your startup is to make money so it eventually sustains itself and doesn’t rely on investments.