The Startup Lifecycle
By: Harrison Wells
In Austin and The University of Texas in particular, innovation, entrepreneurship and student startups have been on the rise. In the last few years, UT’s entrepreneurial ecosystem has grown exponentially and with new organizations and opportunities popping up all around campus, a lot of students must be left wondering “what does it actually take to start a successful business?” Here at Genesis, our entire mission is to help students start successful companies and because of this, we’ve decided to give our take on what we believe a successful startup will encounter throughout its lifecycle.
Form Your Idea And Validate That It Has Potential
The first step to starting a business is simple yet extremely important: Founders must decide on their idea, the problem it addresses and the solution to that problem. The reason behind this is that many ideas sound great in theory but when these ideas don’t have a specific problem they solve in an efficient way, they generally don’t succeed. Conversely, when a startup does address a distinct problem and define an exact solution, that startup and their founders set up a framework for success.
The second aspect of this extremely important stage in starting a business is validating that consumers will actually use your product. In our experience, this is one of the most overlooked steps in starting a business and can be one of the biggest threats to a startup’s success. Many times, when founders have a great idea, they get super excited about it and start grinding immediately only to later realize that after their countless hours of work, no one actually wants to pay for their product.
In order to avoid this happening, it is imperative that a startup thoroughly analyzes their prospective target market and defines exactly where their product is going to fit into that market. This requires going out and actually talking to/surveying your prospective target audience, deciding on your price points, knowing your competitors and understanding exactly what you will bring to the table that they cannot. Once you are positive that your product has a place in your market, your company moves on to the next step of the startup lifecycle.
Step 2: Prove Your Concept And Work Towards Funding
After a founder has data showing they have a great solution that consumers are willing to pay for, their next step is to actually prove their concept by building a Minimum Viable Product (also known as an MVP). Generally, over the course of a startup, many things change: Companies pivot, target audiences shift, competitors appear and general societal interests evolve. Because of this, it is very important that founders work as quickly as possible to get out an MVP and test their product in the field with actual consumers. MVP’s allow founders to truly see how their product performs in a real business environment and to collect customer feedback with the goal of polishing and having a fully market-ready product so they can begin searching for funding.
After building an MVP, improving it based on customer feedback and arriving at a final, market-ready product, a founder’s next step should be to create a robust business plan for the future of the company and start attempting to secure funding. A founder at this stage in their startup should have a vast wealth of knowledge on their product, market and target audience as well as a solid pitch deck and data showing their proven concept. Along with this, they should be using this knowledge and data to actively pursue venture capital firms, angel investors, incubators and startup pitch competitions with the goal of gaining funding to begin scaling their business.
Step 3: Scale And Establish Your Place In The Market