Identifying the right reasons for starting your business is extremely important in taking the first steps into entrepreneurship. I wrote an entire article last week on what you should be aware of before you quit your job.
This week, assuming you're starting up for the right reasons, I will guide you through the steps you need to take to launch your first startup.
Before you quit your job to launch your startup, you need to first validate your idea. You need to know whether people actually want what you're building. Quitting your job to build something that people don't want would be a foolish thing to do. So the best way to do this would be to launch a side project while you're still in a job.
If you're launching a product in the consumer space, start out with a basic prototype or a minimum viable product and use employees at your company as potential customers. What this means is, don't look for perfection, rather get a working product that offers the core value or feature you envision. The idea is to quickly get feedback with the least amount of investment put in to build the product. Once you start to get feedback and traction from users, you can then make changes or enhancements to the product.
If you're in the B2B space, go sell the concept to another company and ask whether they'd be interested in buying the first instance of the core product, after which they will get all the upgrades for free.
The moment you find the first few sets of customers who are willing to pay for your product or service, you've got your idea validated and know that there truly is a demand for it.
This is the defining moment. To do or not to do. If you really want to launch a startup, then at this point your idea is validated, you have a working prototype, and you need to start building traction among customers while simultaneously enhancing the product to suit their needs.
You need to put in your papers now. Just do it. Necessity is the mother of invention and each problem has a solution. So when you're faced with a problem, you will find a solution. Do not worry at this stage about problems you don't have. Put your product into production and, at the same time, turn your papers in.
It may be prudent to save up enough funds to last you at least three to six months without your product making any money, and I've known entrepreneurs who quit their jobs once their product started rolling in revenues.
This is a highly personal call, and you have to secure your family before you take the plunge. It may be easier if you don't have additional responsibilities or dependents. But the only way to build a sustainable long-term business is to give it your all. So don't think about sailing in two boats at the same time.
Keep trying to acquire customers. Manually. And focus on delighting each and every one of them. That way, by the time you come out of your job, you will have established a customer base that has had adequate experience with your product and will be delighted enough (assuming you put your efforts into this) to share it with their networks.
The compounded effect of referrals and your ongoing work recruiting customers will help your startup to grow and reach a sizable number of customers within a very short period of time.
Paul Graham of Y Combinator put this brilliantly in one of his recent essays: "The mistake [entrepreneurs] make is to underestimate the power of compound growth. If you have 100 users, you need to get 10 more next week to grow 10% a week. And while 110 may not seem much better than 100, if you keep growing at 10% a week you'll be surprised how big the numbers get. After a year, you'll have 14,000 users, and after two years you'll have 2 million."
The day you're set free is the moment of truth. Now you've got a real business with real customers, and if you've done well this far, you probably also have your first set of employees. Whatever it takes, you have to walk, take bigger steps, and eventually run. If you've set your mind to it, there's no reason why you shouldn't go for it.
Keep your focus on how you can delight every single customer, and there's no reason why you can't change the world in your own way.