1. What do you want to be?

  2. Who’s on your team?

  3. What do you need a startup for? 

  4. Where can you find startup ideas?

  5. What’s your product about?

  6. How do you test your hypotheses?

  7. Which market should you choose?

  8. Which business model do you employ?

  9. What about startup economics and investments?

  10. What do you do best?

What do you want to be?

For starters, you should decide on whether you want to be a businessperson or an entrepreneur. Businesspeople are individuals who purchase a company or set up a new business within an existing business model, while entrepreneurs sell innovative ideas and make use of novel earning methods. What’s more, the latter are constantly looking for ways to express themselves and come up with new ideas and services – hence there are serial entrepreneurs, that is people who regularly start new businesses and then move to another one.

Businesses and startups aren’t the same thing. While businesses are initially based on strategies and ready-made action plans, startups are all about a constant search for new options and moves needed to build a strategy. For instance, entrepreneurs may be bursting with ideas but they can’t know for sure which of them will take off, so they have to carry on generating and testing their hypotheses. 

Credit: photogenica.ru

Credit: photogenica.ru

Who’s on your team?

It’s not easy to launch and develop a startup on your own. That’s why you should have a few more specialists on your team to efficiently delegate tasks. Aside from a team lead, your team should include people who will generate new ideas, build marketing strategies, and deal with financial matters. Mentors are crucial, too. They will help you avoid making common mistakes and skyrocket your business. 

What do you need a startup for? 

Once you’ve realized you want to be an entrepreneur, you need to get your head around why you want to do it. There could be multiple reasons: for instance, you’d like to produce a product or a service to solve your own problem, help other people or the planet, make money by doing what you love, or even simply to become famous. Find your why!

Where can you find startup ideas? 

There are several ways to find startup ideas: 

  • Copy successful businesses and adapt their ideas; 

  • Turn your hobby into a business. In this case, we recommend turning to the philosophy of ikigai, a Japanese concept that means “a reason for being” and combines passion (what you love), profession (what you’re good at), vocation (what you can get paid for), and mission (what the world needs);

  • Turn your job into a business;

  • Join a global market by, say, pitching your idea to a well-known brand;

  • Solve a problem in your community. For instance, you can develop a parking app;

  • Reach out to people to learn about their problems.

You can also look for ideas in Gartner Hype Cycle for emerging technologies or focus on consumer trends and promising fields, such as EdTech, artificial intelligence, cyber security, smart city, gig economy, virtual and augmented reality, and so on. Another source of inspiration is the United Nations General Assembly’s Sustainable Development Goals that are no poverty, zero hunger, good health and well-being, etc.

You’ll have no trouble formulating your idea with such tools as SCAMPER or TRIZ. The only thing you need is to understand what problem you want to solve with your project. To make sure that you have a clear vision, test it by trying to fill out the gaps in the following sentence: my company helps ___ to solve a problem of ___ with ___. The current solution for the issue is ___ and it costs ___. The key advantage of my company is ___.

Credit: photogenica.ru

Credit: photogenica.ru

What’s your product about?

Once you’ve made up your mind about the general concept, you should think about what kind of a product you will offer, what your target audience is, which communication channels you’re going to employ, and what your message is. You can sell the same product to different people, but some groups of consumers will appreciate it more than others.

Then, you’ll need to come up with a way to distinguish yourself from competitors and make your product attractive and noticeable among others. For that, consider:

  • Increasing customer loyalty by implementing bonus systems, thus lowering the chance that they will leave you for a competitor;

  • Creating a network effect. You can create a business focused on satisfying all needs of a group: for example, a store for hockey enthusiasts where they can buy all kinds of items related to their hobby;

  • Finding a way to lower the cost price;

  • Creating a recognizable brand;

  • Picking a narrow niche or a specialization with few competitors;

  • Creating the best team on the market;

  • Offering exclusive and unique products that can’t be found anywhere else;

  • Becoming an exclusive author, manufacturer, publisher, or a distributor.

How do you test your hypotheses?

Before you put your product on the market, you should think about how certain actions will influence your project by formulating and testing hypotheses. For example, do you need to invest into a mobile app right away or will a regular webpage do for now? To answer this question, you can use the HADI method: first, you formulate a Hypothesis, second, you perform an Action, then collect the resulting Data, and analyze it to receive Insights. Sometimes, you should also consider the Resources that you’ll need to test your hypothesis.

Which market do you choose?

There are four types of markets. First – the ones already taken up by major investors (take, for example, the taxi market and giants like Uber, Lyft, and Gett). Second – settled markets with one or several natural monopolies in a specific field, such as the world’s largest palladium manufacturer Nornickel. These first two types aren’t very suitable for beginners, so it’s best to try your hand at other markets: either those that have been established a long time ago but still lack leaders, or brand-new ones that are populated by a variety of small companies and startups. Such markets allow young entrepreneurs to test their ideas and products. 

Which business model do you employ?

There are up to 50 commonly used business models to choose from, but four of them are most popular and profitable:

  • Resell – buy a product and sell it to someone else;

  • Produce – make the product yourself and sell it;

  • Advertise – profit by placing ads;

  • Join a marketplace – an online platform for sellers and consumers.

What about startup economics and investments?

Once you’ve picked a business model, you should perform a unit analysis and calculate your income and expenses per customer. This can help you answer several questions: how many clients per month you need to stay afloat and cover your constant expenses – rent, bills, salary, etc; how many products you should sell to produce a net profit; and if your chosen channel can provide you with the required amount of sales.

Credit: photogenica.ru

Credit: photogenica.ru

After unit analysis, you should start looking for clients and making profit. If you don’t have enough investments, participate in acceleration and grant programs. To scale up your project, discuss it with investors. By that point, you should already have an MVP, a team, and first sales.

What do you do best?

Whatever you do, it’s important to be the leader among your competitors instead of following in their footsteps. The sooner you place your product on the market, the sooner you’ll receive feedback and will be able to make improvements and test it again. If you succeed, you’ll be copied by others, which is a good sign. That’s when you should develop even more to leave your competitors behind.

Entrepreneurial Competence Training is a part of the project Platform of University Technology Entrepreneurship. As part of it, educational events take place in six Russian cities, where students can learn more about creating a technological startup, evaluate the market, build a business model, attract an investor, form a team, and many more. Among the speakers are entrepreneurs, soft skills lecturers, psychologists, accounting, taxing, and management experts in small business, as well as business consultants and other specialists. The training is conducted by Russian Venture Company, ITMO, and the startup studio Open Innovations (Otkrytye innovacii).