Most people believe they are only one great idea from becoming the next Bill Gates or Elon Musk.
An exceptional idea is only a small part of what makes startups successful. There are many great examples of amazing ideas not being successful as a startup – Gorillas is a great example of a recent idea that in the end was not very successful.
When determining what makes a startup successful, a good way is to look at what kind of startups do the most popular Venture Capital (VC) firms invest in. Popular or Successful VC’s are Sequoia, Andreessen Horowitz, Y-Combinator etc.
In the following I will share my thoughts and learnings about entrepreneurship and founding your own company, something I aspire to do myself in the future.
Expertise and insight is the greatest asset for a founder.
Most successful founders have one very important thing common: They have at least one expert in the specific field they are trying to get into.
Why is this important?
One of the most important tasks for a newly founded startup is to find a product-market-fit. This term describes the challenge of knowing exactly what your future customers need vs. what you can offer, is very important to save time and money.
Tis visualisation shows the importance of customer engagement and the vision of your startup. They form the basis for your Product Market Fit.
The greatest idea needs to make sense economically
There are a lot of ideas which sound amazing on paper, but if there is no money to be made, the idea will not scale and therefore the impact is limited. For example, planting a lot of trees to fight climate change is great, but without it making money, it will only be possible through donations – and donations are not scalable.
That is precisely why there was a system implemented called Co2 certificates – to help make sustainable ideas profitable and therefore scalable. Of course, the implementation is not perfect but there are plenty of great startups which would not exist without this system.
If you solve a problem, you need to think about if your customers would be willing to pay for your solution. Consider different aspects: How much time would it cost to solve the problem manually/without your product? Who is your customer – do they have a high or low budget? How easy is it to use/buy your product? All these questions help you determine if your product makes sense economically.
Driving a car with hydrogen is great until you pay double the usual gas price with half the range.
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Technology is important for every single startup today
Every startup needs technology. You need to be findable on the internet by potential customers, investors or partners – without paying for every single click through google ads. Search engine optimisation (SEO) is the most effective way to generate interest in your product since you basically pay nothing after setting it up. And when you target the important keywords, your visitors are already trying to find a solution to the problem you solve with your product.
Even more important is the integration of your product with existing technology (API, Apps etc.). Companies are no longer looking for yet another tool to add to the growing number of programs they have, but rather great additions or white-lable solutions which easily integrate with the big tools they are using today. This decreases the barrier of entry and increases the likelihood of a great acceptance.
Therefore, you always need someone with a tech background in your early team to have the perspective from the start on the team.
