It is the million dollar question that no one can truly answer: "How do I take my startup idea and turn it into a large, successful sustainable business?" Anyone who claims they know the answer is fooling you and themselves. Having said that, while no one knows the formula needed to succeed 100 percent of the time, there are some initial steps that if not taken, you will most likely fail 100 percent of the time. So we don't know for sure what you can do to succeed, but we do know what you should do to avoid failing.
These are the first five steps you should take on the road from startup idea to successful business:
1. Do Real Competitive Analysis
Listen, you are building something you are obviously passionate about. There is nothing you instinctively want more than to believe you are unique and special. Nothing is more exciting than the thought that you are the first to think of this idea. Therefore, building your venture is going to be a walk in the park, because there is no one else out there. Allow me to burst that bubble. There are others, and you need to know about them.
So not only is competitive analysis imperative to your success, you have to make sure you fight the instinct to do that research with the subconscious goal of proving to yourself how few competitors there are. You need to do quite the opposite. Cast a wide net and make a competitive landscape including anyone and everyone in your entire space, even those companies that are not direct competition. The more companies you are aware of in your space, the more professional and educated you will be moving forward.
2. Figure out Your Homerun
Every startup needs at least one homerun. Whether it is your product, your team, your traction, or something else, if you are eventually going to raise capital and market your product, you need to sit with your team and figure out what your biggest homerun is. No investor is interested in writing a check for a startup that has a few triples, an "OK" market, an "OK" team, or anything else. Everyone wants to associate with a homerun. Find it. and focus on it.
3. Build an Impressive Prototype
There is the famous catch-22 of startups. You need money to build the product, but you need a product to raise money. You can use many solutions out there today to crack this by building a very impressive prototype that will illustrate the potential of the final product. It should not cost you too much and it can be the difference between a yes and a no in that first investor meeting.
4. Research Ideal Partners
Most young entrepreneurs get this one wrong, and it is a fatal mistake. Don't let investors choose you--you need to choose them. Taking the wrong money from someone just because you needed the financial oxygen will more often than not, cost you dearly down the line. Do the research of who would be the ideal partner/investor to back you, and target them. It has been said many times, but it is important--crucial to understand--that taking money for your startup is very much like a marriage and the hope is to be together for many years. Don't just jump in, make sure you get to know each other first.
5. Make an Investor Presentation
This point might seem out of place. I assure you, it is not. Making an investor deck is useful when raising capital, but before you go to investors, there are 100 other things you need to do. So why is this here? Because this presentation you are making is, first and foremost, for you.
If you can create a clear and concise presentation that will answer any and all questions investors might have, then you are on your way to communicating effectively. This presentation will help you with your messaging, primary and secondary, and it will help you raise questions internally that you might otherwise ignore. Getting into the mindset of an investor is a very good step in figuring out how feasible your idea really is.
If after these five steps, you are still full of stamina and enthusiasm to push forward, well, that is a very good sign.