Business Planning: Key Action Steps To Build A Successful Internet Startup
Launching a new Internet startup? Wondering what are the key things to worry about before it's too late? Do you need a business plan or do you need a great team and a cool idea to run with?
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When launching a new Internet startup, that is a company proposing to the market a new product or service, are there definitive priorities and must-do steps to follow or just having a bright and useful idea is the only thing that really counts?
How To Put Your Small New Startup On The Right Track From The Very Start
If you are just about to launch your first small start-up with a bright idea and a bunch of friends who are passionate about launching a new technology product, here is my personal advice on what to lookout for:
1) Have Clarity of Intent
- Synthesize what your new product / service is all about. Then go to the corner snack bar and tell the barman your synthetic definition. Can he understand it? Can she repeat it meaningfully to someone else?
- Don't try something too complex or ambitious. Stay with your feet on the ground.
- Go after an idea where you personal contribution can be very significant. If your idea relies all on someone else making it possible, I'd suggest not to pursue it.
2) Go After Monetizable Markets
- Identify markets that are already active and growing, and in which your product / service can fulfill a specific niche / need.
- Make sure, that the market niche you have identified is made up by a majority of people who have both the need and possibility to spend.
- Don't go after a great idea that caters to a marketplace of bankrupt people with very little money to spend.
- Look around and consider adopting some of the alternative monetization approaches available to you. Don't go the advertising way by default.
3) Find Affordable Customers
- Choose a niche in which your potential customers are willing to pay higher prices for a product / service like yours.
- Make sure your product / service offers them a benefit that is worth the cost you are going to charge them many times over.
4) Have Focus
- Keep in mind that customers mostly buy a simple product / service with a unique value proposition.
- Identify what that product is and create a unique value proposition for it early in the process.
5) Relieve Your Customer Pain
- Identify the key one "pain" that hurts the most your potential customers and go after it.
- Design and deliver a truly effective and reliable pain killer.
6) Be Unique
- Constantly challenge conventional wisdom.
- Embrace innovation and breaking away from conformity.
- Invite your customers and stakeholders into the design process.
- Stay ahead of the game by knowing well your competitors and following major trends.
7) Build A Passionate Team
- A company's DNA is set in the first 90 days.
- Build a team based on passion and affinity for collaborative work.
- Build a team that shares the same ethics, values and life goals.
8) Be Swift
- Rapid action, clarity of plans and an invisible landing strategy can often guarantee success over more potentially capable competitors.
9) Be VERY Cost-Conscious
- Limit your expenses on what's really critical.
- Spend only on what is high-priority and think always about profitability.
10) Don't Fall Prey of Startups Spending Spree Temptations
- Start with only a little money.
- Limit your spending to what directly impact your productivity bottom line.
Preparing A Business Plan For Your Start-Up
A good business plan for a startup should be as simple as possible and it should communicate very clearly:
a) what the nature of the business is,
b) who are the customers and
c) what are they key strengths and advantages of your new product / service.
The simpler and more straightforward the above information, the better.
Here is a basic guideline to follow to start creating your own.
1) Define Your Goals
- Define the company/business in a single declarative sentence.
2) Identify The Problem(s) You Are Going To Solve
- Identify with surgical precision your customer pain(s).
- Uncover key customer frustrations in trying to resolve it.
3) Create The Solution
- Demonstrate your company's value proposition to make the customer's life better.
- Create a solution based exactly on what your taret audience asks you.
- Showcase specific uses and applications.
4) Lay Out Your Time Plan
- Set-up the historical evolution of your category.
- Analyze recent market trends and results from similar companies.
- Evaluate time to market required for your new product / service.
5) Invest In Market Analysis
- Identify the customer profile your product caters to.
- Learn everything about your competitors communication and marketing strategy.
6) Do Competitive Research
- Know everything about your competitors product.
- Learn and research their key competitive advantages.
- Uncover and analyze their key weaknesses.
- Identify your key competitive advantages realtive to theirs early in the game.
7) Define Your New Product / Service
- Survey your potential customers.
- Look closely at your competition.
- Make it unique and identifiable.
8) Select Your Business Model
- Revenue model.
- Give before asking.
- List building forever.
- Set pricing after distribution is well defined.
- Make your customers your best marketing agents.
9) Make Your Team Work Efficiently
- Adopt a sport team's communication approach
- Enable everyone to participate.
- Go open - all communications are shared - Everyone is a leader.
10) Secure The Economic Side
- Learn to use a balance sheet
- Keep your cash flow under tabs.
- Prepare yourself to go without financial backers.
- Make it sustainable before making it cool.
Originally written by Robin Good for Master New Media and first published on August 26th 2008 as "Business Planning: Key Action Steps To Build A Successful Internet Startup".
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