5 Key Stages to Startup Ideation

Introduction:

Starting a business may be daunting but it doesn’t have to be. When you break down the startup process to its core elements, you can summarize it as a process of testing and iterating. It sounds easy but hard to execute. Of course, having the right guidance can make all the difference. In this blog post, we'll walk through the 5 key stages of the startup journey, using insights from The Startup Ideation to help you navigate each phase effectively.

1. Ideation: Turning Ideas Into Reality

In the beginning, your startup is just an idea. Look for mentors with industry experience who can challenge your assumptions and provide practical advice for getting your concept off the ground.

At this stage, you should be talking to as many people as possible (industry experts, startup coaches, purchasers of the product etc).

You may have a pain point yourself and that may be driving the business idea. But make sure that it is a real problem that people are willing to pay for. Usually, the pain point has to be big enough that many people are looking for the solution, not just you.

At this point, before going straight into building a solution, you want to brainstorm and validate your idea.

There are lots of way of doing this. We recommend starting with quick sprints to come up with solutions. At every sprint, make sure to get feedback from potential customers. You should be constantly learning at this phase.

Here are some recommended methods and tools at this stage:

• 5-day sprint cycles

• Leverage online whiteboards

• Brainstorm with a multi-disciplinary team to identify pain points and solutions

• Conduct customer research to validate your assumptions
  

The intent at this point is not to find customers, but to come up with viable ideas and validate IF you have a solution. Also, you want to know if the problem is big enough and if people will pay for it.

Don’t spend enormous amounts of money at this stage. Be as scrappy as possible. Remember, this phase is all about discovery.

2. MVP (Minimum Viable Product):

Moving from idea to a working product is the next step. Startup-Ideation can guide you through a Minimum Viable Product (MVP) build. At this point, you should be creating a quick prototype made up of off-the-shelf tools/solutions that can be tweaked and revised easily. Don’t custom build a solution at this point. And don’t hire a huge dev team.

A word of caution. We’ve met too many startup founders who have created a solution at this early stage without any customer feedback. The phrase, ‘if you build it, they will come’ is definitely not true in the startup world.

In fact in a 2022 survey by CB Insights the two main reasons why startups fail are:

1. Run out of money/Lack of financing

2. Lack of a business model

In addition, a Skynova survey of founders below shows what they wish they had done differently. The first three items on the ‘wish-list’ highlights the importance of following a winning process.

3. Product-Market Fit:

Product - Market Fit is a term coined by Marc Andreessen. In his words, “product/market fit means being in a good market with a product that can satisfy that market.” startup-ideation’s sweet spot is in product-market fit and channel-product fit. The two go hand-in hand. In both instances, it’s about finding the right customer group who is willing to pay for your solution and for the word-of-mouth to go viral

This is where a significant amount of time and effort must go into finding the customer group. We encourage startups to

• Create personas. This exercise will help target your prospects and give you clear direction on how to message them.

• Create testing plans. Testing plans vary based on your product/service. The baseline testing plan should include headlines, images, messaging, offer, business model, pricing and product demos.
  

Tip: This is a very tedious process and some startups opt to skip this stage and go straight into fundraising. However, it is an important process.

4. Lead Gen Funnel:

At startup-ideation, we refer to this process as lead generation funnel development. For any startup to scale, it means creating a robust, repeatable funnel using the right channel mix. It’s important to find the channels where your customers go. The key is to find your customers at the right time, right message and in the right channel.

You should have hired a marketing person by now but if you haven’t done so, this is the time to do it. Why?

• Media fragmentation has made targeting very complex. Need to bring on a specialist who can help find the right channels and tactics. Key tactics you should consider include but are not limited to PPC, SEO, social media, email marketing etc.

• Importance of creating a marketing plan that pulls through leads across the entire funnel. It’s important to go beyond awareness and build a robust funnel to ensure that customers become loyal and repeatable customers. Remember, traditional marketing only focuses on top of the funnel. We focus on the entire funnel. This is a key differentiator.

• Back-end CRM system. Lots of CRM systems exist but depending on which one you choose, there will be cost implications and automation issues. Not all CRM systems are made equal. At this time, you need to choose the right one, so that you’re not paying $500 per month for your monthly CRM system.

Tip: Seek mentors with expertise in specific marketing channels to refine your strategy and prepare for scalable growth.

5. Scale:

As your startup scales leadership and decision-making become crucial. This is when you need to begin hiring your team in earnest and getting advisors on board who can open doors and recommend investors. Be vigilant about your expenses at this stage. Although, you need to spend to keep up with the demand, you will need to keep your CAC (cost of acquisition) low.

You may wish to work with a venture capital firm or other advisories who help startups with funding and mentoring.

Remember that investors look for:

• A leadership team with experience (not just entrepreneurial experience but industry experience).

• Make sure that you have a COO, CMO and CFO on the leadership team. If you cannot hire full-time, consider hiring fractional leaders. The team should be focused on their domains and help you scale the business.

• Demonstrate a healthy dynamic between the leaders and develop a strong culture.

• Bring on advisors who compliment the leadership team in terms of skills and experience.

• Make sure your advisors not only invest in the company but open doors to prospects and investors.
  

Inquire with us about VC and Advisory partners.

Tip: Align with mentors who have experience in leadership and long-term planning as your startup becomes a mature business.

Conclusion:

Starting and growing a business is an iterative process, and having mentors at each stage can significantly enhance your chances of success. With startup-ideation, you get practical advice and insights tailored to your business needs. In addition, we help with growth marketing and execution. Remember, mentorship is a key ingredient in the recipe for a successful startup journey.

For more on us go to the-startupideation.com

Recommended Readings:

• The Lean Startup by Eric Ries

• Sprint by Jake Knapp

• The Four Steps to the Ephiphany by Steven Gary Blank

• Running Lean by Ash Maurya

• Nail It Then Scale It by Nathan Furr and Paul Ahlstrom