Will people pay for it? Once you’ve asked yourself if you’re solving a problem that’s worth it, you have to ask yourself: “Are people going to pay for it?”. This step is important, because even if your solution is amazing, if people aren’t willing to fork out their money for it then your startup is bound to fail. Naturally, there are lots of free products out there that can be used for free but are monetised in a different way, such as ads in apps for example. But the same rule of thumb applies, people must want your product/service enough to endure the ads. In this section, we are going to show you how to validate your solution so that you can be confident it will work before you pour blood, sweat, tears and money into it. Validation tools There is more than one way to validate your solution, like pre-orders and email collection which can be done through a website or landing page, and asking your target audience what they think of your product/service using surveys. Landing page You can create a simple landing page that promotes your product/service and have people register their interest by signing up to receive updates via email. By sharing the page on social media and/or paying to promote it by paying for ads on Google, Facebook or anywhere you think your target audience might see it. Temporary Landing Pages are often designed to “tease”the viewer - if it were for a new car, it might show only part (the best part of course) and tempt you with amazing numbers (top speed or range). Think how you might make your landing page intriguing so the viewer wants to ask more? Landing pages are relatively straightforward to set up thanks to website builders such as Wix or Wordpress and don’t take too long to make. Just ensure that you know how you’re going to direct traffic to your landing page, otherwise what’s the point? Surveys Surveys are a great way of collecting quantitative data about your product or service. They can provide valuable feedback as long as you make sure you’re asking the right people (a.k.a. your target audience) the right questions. Be wary of accidentally ask leading questions that might influence people to answer a certain way instead of saying how they genuinely feel, which leads to useless data. Interviews and Focus Groups For more detailed insights, you might want to consider one-on-one interviews or focus groups where you can have a real conversation about what makes your idea good, bad, expensive, or too fiddly. The trick with interviews and focus groups is to make everyone feel at ease so that the conversation flows naturally and people can talk about their opinions without feeling awkward or judged. Crowdfunding Crowdfunding is a great way to validate your idea, but you need to have enough to show the crowd in order to attract enough people to invest - which can require substantial time and money in the first place. The good news is that if you meet your funding goals, then it is usually a good indicator that your product/service is worth it to enough people. Market size - are there enough people interested in your solution? So you have a solution that solves a problem that people would pay for, but now comes another question: “How many people would actually buy your product/service?”. This is a question that investors will ask you all the time. They want to know that the market is big enough to make it worth investing in your startup - think $100 Million and above if you want to attract serious investors - although a smaller market size in a strong niche with excellent margins can attract focused investors too. Once you’ve validated your solution, it’s time to focus on generating and showing traction to attract further investors. We’ll detail the different types of traction to focus on depending on your type of product/service, and how to generate traction in different ways in the next chapter.

Does your product or service solve a problem? And is that problem worth solving? Most successful startups are born from a need. You need to ask yourself “Is my idea providing a solution to a problem worth solving?”. It’s important to be honest with yourself. Otherwise you’ll end up wasting time, money and energy on an idea that had no chance of working from the get-go. No matter how seemingly-genius a spork is, the fact is that is solves a problem that no one really cares about. Do you know anyone who owns a spork? Neither do we. The best way to come up with an idea is to notice - not think up - a problem that needs fixing, and find a solution to that problem. If you’re simply trying to think of startup ideas, chances are you’ll end up with a bunch of ideas for products or services that, realistically, no one would use or buy (did we already mention sporks?). How do you notice these problems? By trying to be more aware of the problems that you yourself face at work, at home, or anywhere else. That way you’re identifying genuine problems rather than trying to brainstorm a bunch of artificial issues that need fixing. You can also find problems that arise from specific situations, such as a crisis (COVID-19 naturally comes to mind). Once you’ve noticed a problem that you think is worth solving, you need to come up with a solution that is both creative and functional enough to be worth buying/downloading. And that’s a lot easier said than done. So despite the fact that we can’t think of the solution for you, below are some case studies to take some lessons from. Case Study Webvan, the service ahead of its time Valued at $1.2 BILLION at its peak in 1999, no one predicted that Webvan would file for bankruptcy just two years later. What was Webvan? A home-delivery service for your groceries, which is extremely prevalent these days with a number of major supermarkets offering that exact service. So how did Webvan go wrong? They followed a business model that ultimately caused the company’s failure. This model placed emphasis on scaling as early as possible, but when Webvan expanded to 26 new cities, it caused a logistical nightmare resulting in losses of over $800 Million, the firing of 2000 employees and finally the closure of the business. By scaling too early, Webvan didn’t wait to see whether they’d be successful in their original market (the Bay Area), where they were actually failing. But because they didn’t know this, they massively expanded and inevitably couldn’t cope with the sudden growth of the company, causing it to shut down. Scaling too early wasn’t Webvan’s only flaw though. The company was providing a luxury service - WholeFoods-quality groceries delivered straight to your door. But because it was targeting an audience that was price-sensitive, Webvan had to price its service way too low, making it impossible to render the service profitable. Combined with the company’s complex infrastructure model and premature scaling, it’s easy to see how the venture ended up as a failure. What Webvan did right: Noticing a problem worth solving that affected a sizeable market. What Webvan did wrong: Expanding before evaluating performance in their original market. Targeting the wrong audience. Poor infrastructure organisation. Airbnb, a success story Airbnb got off to a rocky start, as do many startups, but it managed to adapt and overcome the challenges it faced. An example of the company’s resourcefulness was selling election-themed cereal (“Obama O’s” and “Cap’n McCain’s”) to raise funds. The company’s concept was born out of a problem: during conventions and other big events, all nearby hotels are not only mega expensive, but also usually fully booked. That why’s the Airbnb cofounders decided to launch a website called Air Bed and Breakfast, letting customers sleep on their floor in exchange for a cheaper price. Fast-forward to now, and the company boasts over 7 million accommodations and over 750 million guest bookings in 220+ countries. But remember that rocky start we mentioned? Originally the website only got a couple of bookings, and many were skeptical of the idea, hypothesising that criminals would exploit the service to victimise visitors. Despite this, some people still utilised Airbnb, but not enough to sustain the company long-term. So what did Airbnb do? They spoke to their users about how to improve their service. As New York had the highest amount of Airbnb users, the team travelled there to speak to them in person. What they discovered was that people were put off by the low-quality images that hosts were uploading. So, the team went round to the hosts’ listings with cameras to take proper pictures of their living space. This created traction for the company, allowing the company to attract a series of investments along the past few years, leading Airbnb to grow exponentially and become the mogul it is today. What Airbnb did right: Noticing a problem worth solving that affected a sizeable market. Providing a practical solution. Adapting when times were tough. Speaking to their users. Acting on their findings. What Airbnb is doing wrong: Amid COVID-19, Airbnb has been forced to adapt and you could say that they haven’t been doing too great, check out the video below. Once you know you have a solution to a problem worth solving, the next step is to validate your solution.

Startups are the crutches of our economy. At some point, every company was a startup and without them, we wouldn’t be able to enjoy the convenience of saving files in the cloud with Dropbox, or book cheaper accommodation thanks to Airbnb, or even continue to work from home using Slack. Startups create jobs, disrupt industries and drive innovation but most importantly: they provide a solution to a problem worth solving. That is what unites all startups, no matter the industry they operate in. Without brilliant solutions, there would be no startups. Unfortunately, it takes a lot more than a good idea to launch a profitable company. Why you need this startup guide As we just mentioned, startups require more than just a great idea, otherwise we’d all be entrepreneurs running our own successful business. However, when you start thinking about how to split the equity between cofounders, or how many people you’re going to need to hire, or where you’re going to get enough money from - we could go on - things start to get a little complicated and confusing. That’s why we’ve written this guide, using our cumulative 100+ years of experience in startups to try to make life a little easier for entrepreneurs by breaking down the most important things you need to think about when launching a startup. What will be covered Startups are like expeditions, and just like you need a map for an expedition, you’ll need a guide to help you navigate through the various obstacles of launching a startup successfully. We’ll be covering the following topics: Is it more than just a good idea? How to validate your product/service How to create traction and the value of social proof How to pitch your startup How to write a business plan How to market your startup How to fund your startup Startup Checklist Startup FAQ Startup Resources If there is anything you’re wondering about that we haven’t covered in this guide, feel free to reach out to us on LinkedIn or send us an email: info@startup-gurus.com and we’ll get back to you as soon as we can!

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Have you got a unique solution to a problem worth solving and have you checked if IP can be registered for it? Are you ready to commit your time, energy and money to your startup? Have you got a cofounder (or two) who is as passionate as you about the venture and if you haven’t have you considered (investing) Non Executive Directors to fill this role? Are you financially stable enough to go through the trials and tribulations of launching a startup? Have you registered your startup? Have you got an elevator pitch prepared? Have you got a business plan with a full and credible financial forecast for a minimum of 3 years? Have you got a pitch deck? Have you got a website, social media plan, and appropriate marketing collateral - see our article on how to market your startup (link)? If you answered yes to all of these questions then you’re in a pretty good place to launch a successful startup! Need help with any of these steps? Let us know and we'll help you out! Get in touch on LinkedIn at info@startup-gurus.com.

Scale up, what does it mean? You’ve started making sales, revenue is hitting your bank, your target market is responding well, your marketing is a hit! It’s coming towards the end of year one and things are going well. The team gets together – there’s a lot of back slapping and congratulations – job well done! But where do you go from here? This is where you scale up. Scaling Up Firstly, it’s taking what you are already doing and growing it strongly (so same product(s) in the same market but strong organic growth). This is driven by consumer enthusiasm for what you’re doing or selling, but fuelled by your marketing and communications campaign. What will happen, if you don’t plan for it, is problems with manufacturing, supply chain, logistics, service, after sales, warranty etc. An explosion in sales growth creates pinch points in the organisation. A good company anticipates this problem, delegates authority to new employees to deliver solutions and invests wisely in the right structure. But this is only the first phase. New Markets You need to consider new geographical markets – where can you take your product or service next – think about culture, languages, strategic alliances etc. How do you break into new geographical territories? Then consider whether there are new products or services you can launch that sit well alongside whatever it is you’re doing – the same customers are now buying more than one thing from you – they’re buying several = extra revenue from the same delivery / client. And finally, can the product or service you’ve created also be sold into different sectors? For example, you were selling to chicken farms, but could you also sell to cattle farms? All of this is Scale up – and all of it generates additional volume and value beyond the core activity you were doing in year one. You’re building a success story. But you need to plan and control this growth if you want to avoid it back firing. - Grow too quickly and you will not have the funding or resources in place to manage the excitement you are creating. - Build teams ahead of when you need them, so they are in place and trained before they are required. - Consider external third parties to provide services – independent call centres can do an amazing job these days, linking directly into the CRM system you’re using to monitor client interaction with your company. This makes the cost variable rather than fixed and provides you with huge flexibility. Changes to the Supply Chain If you’re making something, then think about decentralised manufacturing close to the customer / consumer (but ensure good quality). Always know the capacity your supplier can give you and provide them with advance warning of a substantial step up in your needs. If you’re shipping, make sure there is sufficient capacity as your volume increases – this must be planned well in advance. Find and Train the Right Staff Finding the right staff, training them well, ensuring a good cultural fit and getting them early enough to meet demand will be critical to your success. Pretty quickly, staff become your most valuable asset and your biggest nightmare – treat them well, reward them appropriately (consider equity) and put structures in place that ensure equality, fair treatment, honesty and the right cultural values you want to establish…… Additional Funding This growth, possible exponential, will require additional funding – make sure you talk to investors about how much you need for each of the phases before they happen so funding is available for things like: language in software; stock with local labels; customer support, properly trained in the language required; local regulations and packaging; certification; extra logistics costs etc. This is all part of Scaling the business. As always, we are just a few clicks away if you need our help to scale up your business, or anything else for that matter!

When you eventually finish your Business Plan (including Financials, Executive Summary and Pitch Deck) you can breathe a huge sigh of relief. Sadly however, that’s not the end – you see, these documents are living things – every time you make a change in your business strategy, direction, purpose, or indeed have a full blown “pivot” then the business plan needs to be updated. Why update your business plan, an example: Dawn, Bob and Michelle have come up with a great idea for a new widget, to be manufactured overseas and sold directly to consumers. The Business Plan, Pitch Deck and Financials are written on this basis. They then discover that (a) the widget needs to be redesigned to work properly (increasing the raw material and manufacturing cost), (b) a huge distributor has approached them seeking to stock the widget and sell to consumers (major change to route to market and revenue streams) and (c) Manufacturing overseas is proving hard to control (quality and logistics) so they decide to produce it in England (increase in manufacturing costs, reduction in logistics, better quality control). These are major changes that all need to be captured in Business Plan V2. It will mean revising the Financials – which is bound to impact revenue and profit, which in turn might impact valuation. Whenever you communicate with stakeholders, especially investors, the Business Plan, Pitch Deck and Financials must be the latest and correct versions. Otherwise you will be communicating a false picture. Recommendation: Whenever you have regular meetings in your startup, make it an agenda item to discuss and confirm these important documents are up to date, and use a system of document control to ensure that when accessing a shared server hosting these documents, everyone accesses the correct version. If you are wondering how to best update your business plan, get in touch with one of our gurus today and we can help you out!

Consider these familiar startup stories, all likely to end in failure. Four engineers get together to create the next generation holographic training solution. The technology is amazing, and every time they meet to discuss turning it into a business, they get side-tracked talking about how things work, what the next iteration might do, how to upgrade it and so on... Or a Phd in Chemistry founds a new company to make an amazing ingredient more cheaply than has been done before. But she’s on her own carrying the weight of the world on her shoulders – burnout is just round the corner… But there is something you can do about this, and right from the beginning. Whatever the nature of the Startup you are creating and however many of you are involved you need to do a Skills Gap Analysis early and regularly. How to Conduct a Skills Gap Analysis You get together with your team – and if there is only one of you that doesn’t matter (in fact it’s easier). Then you ask yourselves – what are the skills we bring to the table (answering genuinely) and what are the skills the Startup needs now, in order to be successful (“now” is critical because the answer will change over time). Our four engineers in the first example, all have solid engineering skills for sure, but what other skills do they have? Our “Lone Founder” may have many skills, but she will not possess all of the skills needed to succeed. Determine the “gap” – what have we got, what do we need, and then – where will we get them to fill the gap (and it’s not always recruitment). You need to determine how often you need the skills you don’t have. You might need input from a CFO type character once a month, but from an administrator every week. In the early days, when money is tight, you might need to lean on friends and family for support, or reach out to some of the services offered by Start-up Gurus where limited help can be pro bono. Also consider bringing in serious “firepower” where the skill you miss is critical to success – for example, 4 Engineers might not possess amongst them the skills to be a CEO and lead the business – the best widget in the world will fail without the right leadership. Never be afraid to bring onboard a CEO to lead the company (when resources allow) – you can still remain major shareholders but leave the hard work to someone who’s been round the block a few times and knows how to make it happen in your industry sector. Review the Skills Gap Analysis Frequently This Skills Gap Analysis needs to be reviewed as the business grows because the requirements will change – new skills will be needed and the quantity will vary. It’s inevitable that a growing Startup will eventually need a full time CFO even if they started with a part time one in the beginning. Some resources that were delivered by third parties might be brought in-house e.g. HR or Marketing. Summary Look for the gaps in the skills you bring to the table by doing a Skills Gap Analysis. From this, work out how to cover these gaps with the right calibre, at the right time and for the correct amount of input.

You can’t have a successful startup without a solid team behind you. Here are some tips on how to put together a team that will set up your startup for success. Before you start hiring, conduct a Skills Gap Analysis to make sure you’re not hiring people you don’t actually need (see our separate blog on Skills Gap Analysis to see how to do this). This will also help you understand whether you need full time or part time people and when you want them to join. A part time seasoned executive with a good network, can add credibility to your business, help attract investors and provide you with a mentor or coach. They might even be prepared to invest (see bottom of this blog for more details) How and Where to Recruit There are plenty of ways you can find candidates for the positions you are looking to fill. Online The most obvious solution may be to post a job offer on LinkedIn, Indeed or Glassdoor, or any other employment websites you know of. But to guarantee that you are getting high-quality applicants responding to your job offer, you need to craft an enticing and clear job posting. How to write a job posting -Make your job title as specific as possible. This will help you attract the most qualified job seekers. -Write a captivating opener. Provide an exciting summary of your company and the role you’re offering. -Don’t forget the essentials. Writing a well-crafted, exciting job offer is great, but don’t forget to include core responsibilities, day-to-day activities, hard and soft skills that are desired, and how the role fits into the rest of the company. -Keep it concise. Realistically, job seekers are looking to apply for multiple jobs and have to read plenty of job offers, so writing a lengthy job posting isn’t going to help. According to Indeed’s data, job descriptions between 700 and 2000 characters get the most applications. -Be upfront about pay. Ambiguous remuneration policies will exasperate candidates and make deter them from applying. Be clear about how much you are willing to pay, you can give a range. The key here is to make potential candidates feel like they’re not being ripped off. As a startup, it can be tricky to get enough funding to pay industry standard, but if you’re paying less than that, then the quality of your applicants might drop. Consider offering equity as part of the remuneration package – this can always be linked to performance and awarded over time. You can also introduce “clawback” clauses so you get the equity back if they leave under “difficult” circumstances – if you want further advice on this, contact Startup-Gurus. -Don’t be too demanding. Yes, some skills are going to be essential for the position you are trying to fill, but make sure you differentiate between essential and desirable skills. Otherwise you might end up putting off potential applicants. You can also be proactive, don’t just upload a job posting and wait for applications to roll in. You can browse online resumes yourself and reach out to people whose profile you think matches what your startup needs. Leveraging Your Network Reach out to former colleagues, or friends who you know are qualified for the position you’re looking to fill. Leverage your social media presence if you have one, even if it’s your personal account. You can get staff to also share the job postings on their social media if they’re willing to. Who knows, maybe the perfect candidate is closer than you think. Offline Attend Industry-related events Finding candidates online might be the quickest and most convenient method, but don’t underestimate the value of attending Industry-related events. This gives you the chance to really connect with people who are interested in your industry face-to-face, outside of an interview setting. Suppliers If you’ve already started working with developers / suppliers / manufacturers, they too can be a source of potential candidates. Reach out to them and ask informally if they will help. Interview Techniques (For Employers) Treat Candidates with Respect This is one of the most common mistakes employers make. Be respectful of applicants’ time, be hospitable, and make yourself available to them in case they have any questions. Do your research Just as you would expect applicants to look into your company, make sure that you’ve looked into them. This doesn’t mean stalking their social media, but definitely take a good look at their resume and maybe even make some notes on some specific questions you want to ask them based on their profile. Include a peer Let’s say you’re looking for a new backend developer to expand your team, but you aren’t a developer yourself. If you already have a backend developer working for you, bring them along to the interview. While you may be able to conduct the interview more efficiently, they will know what to look for in a qualified candidate and weed out the ones who are just using buzzwords to impress. Prepare questions in advance This might seem obvious, but it’s crucial so we had to include it. If you are interviewing multiple candidates, you will need a consistent set of questions to ask them so that you can effectively compare their answers and decide on the perfect person for the position. Include a few behavioural questions to evaluate the candidates on more than just their work experience and qualifications. An example of a behavioural question would be something like: “Tell me of a time when you faced a challenge at work and what you did to overcome it”. You’ll have to tailor these questions based on the company culture you’re trying to develop, the values you consider important and what kind of candidate you are looking for. Follow Up Even if you decide a candidate isn’t a good fit for the job, take the time to tell them why not – don’t just leave them hanging, waiting to receive an email that never shows up. Down the line they might be the ideal candidate for what you need, so don’t burn that bridge. It also says a lot about your organization as a whole, and could lead to referrals on their part. They might have a friend or two that are qualified for the job, you never know. Job seekers attach a lot of importance to how they are treated during an interview process, so make sure they aren’t feeling disrespected or neglected, because they will tell their peers. Interim Resources (part-time vs full-time) from SUGs One of the many services we provide is interim resources – which can either be full time for a short period or part time open ended. If you’re looking for a specific area of experience, and don’t need it full time, a non-executive director or advisor could fit the bill. We have multiple candidates that would lend your startup the credibility and expertise you need to attract investments and grow your business. You might not need - or be able to afford - a full-time CEO / CFO / CMO / CIO (etc.), and that’s where we can step in and help you out. You might even find one interested in investing – we’ve placed several candidates into startups who’ve done just that! Contact us for more information.