It seems simple – and quite frankly after reading this, I would hope it would be to anyone seeking to start and test a business idea on a budget.
There’s a lot of information I have been coming across over the last year or so that has been so helpful to myself, and I feel as if it needs to be shared! This past weekend I had the opportunity to participate in Start-Up weekend in Los Angeles and it was a great experience!
We had to create a socially conscious business that would serve the latin community of Los Angeles as well as be profitable in the eyes of potential investors, so we set out to do just that!
What you’ll need:
- < $100
- A Dedicated team or individual willing to put in hours
- A target network to test & validate assumptions (customers, friends & family, social networks)
Day 1: Hours 1-6
Tasks: The Pitch, Team Selection, Initial Tasks, Competition Research, Branding / Research, Initial Market Research / Assumptions
There are a lot of things you’ll need to figure out when starting, but I’ll try my best to simplify all of my favorite tools to use to cover your first steps when coming up with an idea to pursue.
Step 1: Find a problem you want to solve. How will you be solving it? Simplify this and create a small pitch that can help you articulate this problem to the public.
The Pitch: To be completely honest, I base a lot of my pitches to this day off of videos of my 18 year old self pitching in old competitions. It includes an initial catchy opening statement, statistics as to why you should listen to me, details on the business operation and why I am best suited to run this business. This is a great skeleton for any 60 second pitch. I was able to give a 60 second pitch to an audience in order for myself to recruit a team. The pitch is good to have when pitching to family, friends, potential team members and more. You can watch an old pitch of mine here:
Team Selection: This will require you doing due diligence in understanding what is needed on your team – we were building an app project so one of the most important team picks was a developer. Designers are also great in the early stages to help build prototypes to show to investors or potential users. Most importantly we needed hustlers – willing to do whatever it took to build a business and ultimately win this competition. You should also either have this or find this for your team. If this is just one person, know that it will take longer to pull all the necessary information together – but you will own 100% of the company in return.
Initial Tasks: Within the team we discussed what was important together and was able to delegate the early tasks to everyone with a tool called Trello. This is a FREE project management tool that every smaller organization should take advantage of to keep a team on track. They also have iPhone apps to keep everyone on a phone on track as well. Here are our initial tasks that we delegated early when starting our business. This is great for transparency in the early stages to make sure yourself or the team is pulling their weight.
Competition Research: This is fairly simple but I like Inc’s article on the different tools you can use to research your competition. Try multiple google search queries as well for topics related to the business you want to build. Sometimes seeing competition is a GOOD SIGN! Especially if they are located somewhere else in the world – use it as proof that your idea isn’t crazy.
If it does exist, look into the different ways you can attempt to differentiate yourself to come out on top in the marketplace. Simply attempt to visualize something similar to an old company comparison I put together years ago. Ask yourself ‘How will I set myself apart?’
Branding: Branding is extremely important!!! This is the name, the face, the feel and ultimately everything your customer will be searching in order to find you. I like to keep my business names broad, this allows you to create additional revenue streams for your company as you grow. With a limited name, it limits where you can grow to etc. and ultimately your mass appeal to investors. I aim to create brands that can one day serve 1 million customers, treat the branding as so.
Use NameChk to see if the name you chose is available for domains and social media handles. I like to use 99Designs for branding colors, logo type and style attributes to start. Thesaurus.com is also great for coming up with different wording that can ultimately go into branding.
I would use the initial set of branding assets that you came up with to pass onto a graphic designer who can create branding for less than $30 on UpWork.com or Fiverr.com. Designers need info on what you want created up front, so have that ready by using those tools. Drawings on paper, screenshots, whatever! Make sure to pick a good designer to get work you’d enjoy viewing as a customer. Use 99Designs.com if you have a larger budget to create better branding assets, they crowdsource designers and the best design gets paid!
With this I would find and create the basic social media pages that you feel you need as well as a gmail account to centralize all of your companies data in one place.
Initial Market Research / Assumptions: For initial market research, it’s good to know the market size of the industry you want to get into – then break it down into your home city. I use IBISWorld, but there are many online, and if you still have access to your college library databases – USE THEM! So many good business databases with updated info are provided to your schools libraries.
Assumptions are tricky – but require you to speak to people in the industry. The trickiest part is all in the question asking to ensure you don’t ask biased questions! Here is a quick video going more in detail on gathering your assumptions. I would watch this video from the start to learn a lot more about mistakes, but its cued to the assumptions aspect of it from pressing play.
You should aim to speak to as many people as possible – but in our case we created a couple surveys. One to test our assumptions on the vendor side of our company and one for our consumer side of our company. We used a FREE survey software called Typeform to create surveys we sent out to our social media to receive feedback.
MOST IMPORTANTLY! GET OFF YOUR ASS AND TALK TO CUSTOMERS / POTENTIAL USERS! This is your validation, without it, you will be wasting so much time, money and energy on your company. Here’s a video I put together to show what we did to validate the app idea in the market.
Here is one of my favorite articles on the early stages: Do Things That Don’t Scale
That’s it for part 1! Go out and execute! These are the most important fundamentals to get you started! The next steps would be to create landing pages, simple presentations (if pitching), testing customer acquisition costs, as well as figuring out business model and your go to market strategy. I’ll create a follow up post on how my team placed 2nd out of 24 teams in the competition. Hope you received some value!