Tips for a Successful Startup
1. Set up an advisory board
This is a must before addressing venture investors. If your medical app was created without doctors’ guidance, it won’t be taken seriously.
Sometimes you should create an advisory board before establishing a startup. Imagine developing a product at the intersection of biotechnology and medicine. In this case, you’ll need external advisors at the earliest stage to make everything work.
By gathering necessary specialists together, you will receive valuable expertise, save money, and grow faster.
2. Validate hypotheses with money
Users should pay for your idea, otherwise, it’s worthless. The practice shows that an entrepreneur may overestimate demand by 10 times.
Therefore, it’s better to test hypotheses through sales. If people are ready to pay for your product, it meets their needs. On top of that, this way you’ll gain a great advantage when introducing the idea to investors.
3. Test value proposition as soon as possible
Seemingly, every entrepreneur knows there’s no need to refine the product until launch — it’s enough to build an MVP and receive feedback.
However, you can go further — start validating your value proposition even before creating a product. As a result, you save on MVP development which might fail right after the market release. The cause is a wrong value proposition. Hence, the earlier you test it, the better you know what customers need.
4. Build a proper financial model
Some funds ask startups to provide P&L, a table with forecast revenues and expenditures. This helps their analysts work with data faster. See if the funds you’re going to address have such requirements and prepare for them beforehand.
But most often it’s up to founders to make financial models. If there’s no economist not analyst in the team, you should involve an expert in venture funding. This way you minimize risks and get professional recommendations.
5. Look for a business model
Frequently, novice entrepreneurs mix up financial models with business ones. Although they are interrelated, they are fundamentally different.
A financial model reflects income and cost flows. In a nutshell, this is your startup in numbers. While a business model shows the way your company will generate income. This may be a commission, subscription fee, franchising, etc.
Your main task is to view the business model from different angles to see what way it’s the most scalable and sustainable. As soon as you set up your business model, the startup turns into a thriving business that brings profit on a regular basis.
Which recommendation do you find the most valuable?
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