How To Start A Startup

How to start a startup or a business? This article will be going over the basics with some tips and tricks to starting your own startup. Legal, funding, sales and marketing, intellectual property protection, liability protection, human resources, and other issues must all be understood and dealt with when starting a business.

A startup is a young business created by one or more founders with the aim of developing and marketing a new product or service. The average startup is, by definition, a shoestring operation, with initial financing provided by the founders or their friends and family.

Read more here on What Is A Startup.

How To Start A Startup

One reason many people don’t become entrepreneurs is that they just don’t know where to begin, what that crucial first step is. What we often forget is that the most successful entrepreneurs in the world all started out the same way. They didn’t know what the first step was or what they had to do, but they all managed to take it and become the amazing success stories they are today.

Taking that first step, whether you're attempting to find out how to start a SaaS company, come up with a few winning digital startup ideas, or establish the next big e-commerce brand, can be terrifying. Aside from the wide-ranging gold nuggets of wisdom they shared, one of the most satisfying aspects of obtaining this advice was hearing from so many people who said they simply had to do it — just take the leap.

Below is a detailed infographic created by Anna Vital of Adioma to give you the idea for a rough track route that it takes on how to start a startup.

Key Steps To Consider

Don't be embarrassed if you don't start with a lot of money. You're not on your own! Almost 70% of entrepreneurs in the United States start their businesses in college dorms and basements, rather than renting office space.

Focus on Building a Great Product — But Don’t Take Forever to Launch

Of course, you'll want a "minimum viable product" (MVP) to start, but even it should be good and stand out from the crowd. Many firms find that having a "beta" test product helps them work out the flaws based on user feedback. Startups are well known to be firms linked to the tech industry producing tech-related products and services. Ensure the uniqueness of your product/service that is set to disrupt the industry that you aim to target.

Come Up With a Great Name for Your Business.

The name you choose for your startup can have a big impact on how successful it is. If you choose the wrong name, you may face overwhelming legal and business obstacles. Here are some pointers on naming your business: Avoid hard-to-spell names, don’t pick a name that could be limiting as your business grows, conduct a thorough trademark search, get a domain name for your website.

Secure Appropriate Funding

Startup costs will definitely vary by industry, thus depending on the scenario, your company may require more or less money. It may only cost you less than $10,000 for a modest, part-time business with no equipment, employee pay, or overhead to worry about. Have an idea in your business plan how and from where do you intend to raise funds for your startup.

Set Up a Good Accounting and Bookkeeping System

To keep track of your finances—income, spending, capital expenditures, EBITDA, profit and loss, and so on—you'll need to set up a bookkeeping/accounting system. This is necessary to understand your company's cash flow condition as well as for tax purposes.

Intellectual Property and Startups

Consider the Steps You Should Take to Protect Your Intellectual Property.

Intellectual property protection, to some extent, is considered important for businesses. This is vital in cases if you think that your startup idea is unique and can be easily duplicated or the uniqueness of your idea gives you a competitive advantage in the industry. Most startups will choose not to have intellectual property protection. By failing to safeguard their ideas and creations, many firms lose their intellectual property rights.

Patent protection isn't always seen to be the only means for businesses to protect themselves. Non-patent intellectual property is routinely overlooked by technology startups. While patents can be extremely valuable, they do not guarantee that a company's product is good or that it will sell well. Trade secrets, cybersecurity policies, trademarks, and copyrights can all be forms of IP that can be protected, especially for those startups in the technology ecosystem. To protect your tech startup idea from being duplicated, below is a brief list of how you can protect the intellectual property of your startup:

  • Patents. Patents are the most effective form of protection for a new product. A patent gives its owner the legal right to prevent others from creating, using, or selling the protected subject matter detailed in the claims of the patent. The following are the most important considerations in assessing whether or not you can obtain a patent:(1) Only the concrete embodiment of an idea, formula, or product is patentable; (2) the invention must be new or innovative; (3) the invention must not have previously been patented or described in a printed publication; and (4) the invention must have some practical application.
  • Copyright. Art, advertising material, books, articles, music, movies, software, and other creative works of authorship are all covered by copyrights. The owner of a copyright has the sole right to produce copies of the work and to create derivative works (such as sequels or revisions) based on it.
  • Trademarks. The symbolic value of a term, name, symbol, or device that the trademark owner uses to identify or distinguish its goods from those of others is protected by a trademark right. The Coca-Cola trademark, the American Express trademark, and the IBM brand are all well-known trademarks.
  • Trade Secrets. Startups can benefit greatly from trade secrets. They are cost-effective and will persist as long as the trade secret remains confidential and gets value from its confidentiality. A trade secret right entitles the owner to take legal action against anyone who violates an agreement or confidential connection, or steals or obtains secret information through other unethical ways.
  • Confidentiality Agreements. Non-Disclosure Agreements, or NDAs, are another name for them. The agreement's objective is to allow the owner of sensitive information (such as a product or business idea) to share that knowledge with a third party. However, unless the owner of the information gives permission, the third party must keep the information confidential and not use it in any way.

The infographic below sums up the most important stages an entrepreneur will go through while running the course of his/her startup.

Startup Idea Validation

The process of startup idea validation is whether your firm's idea and product are appealing to a certain target market is known as startup validation. Startup validation entails a series of consumer interviews with people in your target market, and it almost usually occurs before you invest much in your product or concept.

Unfortunately, many aspiring entrepreneurs rush into developing their Minimum Viable Product (MVP) based on their opinions and assumptions about their idea's merits before determining whether or not there is a real demand for their concept.

It's critical to test your ideas before attempting to develop anything. This is to avoid wasting time and resources developing a product or service for which there may be no market demand. According to CB Insights, 42% of startups fail because they don't see the need to validate before proceeding and end up creating a product/service that isn't required.

After you've established that the problem you're seeking to solve is real, you'll need to determine whether the market is large enough to sustain (or even expand) demand. Where will your users/customers come from, and will it be a financially viable option? Set validation goals. You need evidence that your idea is viable in the real world. Thus, set measurable and clear objectives:

  • approval of your idea from 10 potential customers
  • 5 successful pitches in the companies
  • 1 successful sale of a product concept and so on

Read more on Startup Idea Validation in depth here.

Success Stories

Information overload can be a stumbling block to getting started, even if you're listening to the top "how to start a startup" podcasts, reading books written by successful startup entrepreneurs, and following tips from the youngest self-made billionaires on Instagram.

We have compiled and shared some of the success stories from some of the successful startups and businesses.

Grab

Tan Hooi Ling, found herself passionately discussing potential ways to solve Malaysia’s taxi woes with co-founder, Anthony Tan, a few years back. Idealistic beliefs and convictions led them to start MyTeksi in 2012. Grab quickly became the most widely used e-hailing app replacing Uber.

While the region is wonderfully diverse and full of potential, its people face very real everyday logistics challenges. Cities are getting more congested. Public infrastructure is limited. And income inequality is widening, leaving behind those who are underprivileged and underserved.

These challenges affect millions of people and businesses, and they inspired Grab co-founders to build a technology-oriented company in Southeast Asia that could deliver both profits as well as positive social impact.

"I was personally often afraid to take taxis. I worried about getting into dingy beat-up cars with drivers who were often rude, unsafe, or would try to cheat me. Knowing this was a problem our families and friends struggled with too, we ended up developing the mobile application and technology-driven service that became MyTeksi, GrabTaxi, and now Grab. Our services help people book taxis, cars, bikes, and delivery services in a speedy, efficient, and safe way."

Tan Hooi Ling, Co-Founder of Grab
how to start a startup

Eight in 10 women in developing Southeast Asian countries now find taking a taxi safer with Grab. Average taxi driver incomes have increased anywhere from 30 to 300 per cent amongst drivers across the region.

"It’s extremely rewarding to know that we’re able to fulfil the mission we started the company for. And even more so when we’re able to attract other talented and like-minded individuals who share this passion with us."

Afterpay

Founded five years ago in Sydney, Australia, Afterpay has millions of global customers and tens of thousands merchant partners now using the platform globally across Australia, US, Canada, UK (where it is called Clearpay) and New Zealand. Afterpay’s global team is currently made up of more than 700 people and growing.

Afterpay’s business model is completely free for customers who pay on time – helping people spend responsibly without incurring interest, fees or extended debt. Afterpay empowers customers to access the things they want and need, while still allowing them to maintain financial wellness and control, by splitting payments in four, for both online and in-store purchases.

"It’s often said that the best entrepreneurial ideas are simply about solving a problem. The Afterpay model was built around helping my online jewellery business sell more jewellery. Fine jewellery is a tough category, especially for online-only, and customers were saying they would like a bit of time to pay for their purchases but didn’t want to wait to get their pieces. I saw some online jewellers doing this in the US and thought, if this solution doesn’t exist in Australia, I’ll build it myself. And that’s how Afterpay started."

Nick Molnar, Co-Founder, and CEO of Afterpay

Afterpay is a $30 billion giant that has only been around for five years. Its stock has increased by about 300 per cent in just a year, in 2020. Prior to the company's half-year report in February, they set a new high of $160. Even at $100, they're still trading at a highly optimistic enterprise value of 22 times expectations of ahead earnings, despite the fact that they've been dragged down along with other IT corporations.

Afterpay is priced for explosive growth, and it is delivering on that promise. The bar charts — the increase in underlying revenue, client numbers, and merchants – were included in the company's most recent full-year results presentation.

Conclusion

A startup can be defined as an emerging company, normally with a core technological component and high growth potential. Generally, these companies champion an innovative idea that stands out in the general line of the market.

If you're looking for a startup idea, don't look outside for people to tell you what they want. Pick a personal problem, validate it, and if you see people actually are willing to use or pay for such a solution, then and only then start a company around it. It seems to go without saying that you can’t have much of a business if customers won’t pay you. As a leader, you must spend time meeting with those customers and find a need that competitors aren't meeting.

References

Startup Success Stories

35 Step Guide to Startups

Related Posts

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Written by Meerat Qureshi

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