Let’s imagine that we’re building a house, you start with the foundation, then add the walls and the roof, then you move inside and install all the essentials.
Having a good foundation is crucial. Your entire house sits on the foundation, if you don’t pay attention to it initially, your house will most probably ruin very soon.
-The foundation of your startup?
-A solution that you can provide against your customer’s problem!
Messing up the foundation leads to serious problems. These will become more and more difficult to resolve as you continue. You’ll spend tons of time, energy and cash on solving those issues. You’ll end up stressed, depressed and burned out.
And that hurts.
So let’s figure out how to do that with the least amount of money and time, step-by-step.
1. Determine the customer problem and bring a solution
The main question you should ask yourself is: what problem do I want to solve? What problem do I or others run into often?
The goal is to write the problem down in a simple statement along with every aspect of it. Be sure to focus on the problem, not on the solution.
Then next to it, write the solution you’re bringing. This simple yet meaningful picture will help you understand best if your solution will entirely cover every aspect of the problem.
2. Customer Segmentation
Next step is to figure out which customer segment makes most sense to start with.
Customer segmentation is the process of dividing customers into groups based on common characteristics so you can market to each group effectively and appropriately.
In business-to-consumer marketing, companies often segment customers according to demographics that include:
- Location (urban, suburban, rural)
- Life stage (single, married, divorced, empty-nester, retired, etc.)
Customer Segmentation benefits:
- Create and communicate targeted marketing campaigns to a specific audience
- Select the best communication channel for the segment, which might be email, social media posts, radio advertising, or another approach, depending on the segment.
- Establish better customer relationships.
3. Talk to people
The best way to validate you’re correct about your customer segmentation is to talk to real people, there are a couple of ways you can do it, here’s what worked for me:
- Ask people in my network whether they or someone they know find my solution useful.
- Add a message in a Facebook group from your area, mentioning your idea.
When you approach people and ask them to talk, I generally advise keeping it short and personal:
- Introduce yourself and the problem you’re trying to solve
- Talk about what you’re offering and give them a hint that you can solve their problem
- Ask them for a honest opinion
4. Prepare your budget
Now for the hard part, we’re going to talk about budgeting, this is frequently the toughest thing for startup founders.
Many startups fail because their Founders or CEO’s are missing hitting their budgets. You want to be the CEO that hits the budget every time, so, let’s see if I can offer some approaches that will make budgeting process a little easier for you.
Now I know it is not going to be perfect, but at least, it will frame out your thinking so if things don’t work out the way you expect, you know exactly where to look at in order to solve them.
Operating budget is the detailed plan of how you’re going to spend money and hopefully earn revenues over the next one year.
When you do your operating budget you start by identifying what are the key drivers for your expenses and your revenues, what are the things that are going to cause me to spend money and enable me to make money.
Most entrepreneurs make a mistake by finding some templates out there and putting their numbers in, I would urge you instead to start figuring out the design of your business and create your own template based on it.
At this point of time your main goal must be developing and shipping a product or offering services, so you have to organize your expenses around this process (staff, development expenses, marketing), unfortunately I have to tell you that by doing this your job has just begun, and most probably you will have to make adjustments every couple of months. You must be prepared for this continuous process especially for the first couple of years.
4. Invest in branding, be creative
The process involved in creating a unique name and image for a product or company in the consumers’ mind, mainly through advertising campaigns with a consistent theme. Branding aims to establish a significant and differentiated presence in the market that attracts and retains loyal customers.
It is a strategy designed by companies to help people to quickly identify their products and organization, and give them a reason to choose their products over the competition’s, by clarifying what this particular brand is and is not.
Companies tend to use different tools to create and shape a brand. For example, branding can be achieved through:
- advertising and communications
- product and packaging design
- in-store experience
- sponsoring and partnerships
- the visual identity of the brand (logo, website and colors, are just some examples).
6. Focus on great marketing campaigns
A marketing campaign is a planned sequence of activities and processes which promote an individual product or service. A multitude of channels could be used and coordinated to deliver effective results.
I like to define a marketing campaign as a promotion created to reach a specific goal with a beginning and an end date.
Your campaign can contain as few or as many pieces as you find necessary for your business.
The most important part of creating a campaign is defining a clear goal. Your goal can be as simple as increasing your revenue for the month of October, but it must be specific.
The more specific you are when setting your goal, the greater chance you’ll have of actually achieving it. This will help focus your tactics and save you time.
After setting up your goal, you have to think about the most effective tools you have to spread the word about your campaign. Word of mouth, in-store signage, email marketing, and social media are great starting points — choose the tools that work best for your business.
A clear call-to-action: You want to make sure your campaign has a clear call-to-action. A call-to-action encourages people to take a next step with you. You call-to-action can be anything from “download now” to “book now.” No matter what it is, make it as clear and easy as possible
A plan of attack: Your campaign should have a start and an end date. Use a calendar to plan the plot out the important dates and actions.
Here are a few examples of what you can promote:
An upcoming event
A new service
A free consultation
Not only do you want your goals and objectives to be specific, but you want your promotion to be specific too. Telling people you have a sale going on is not enough. Telling people about a specific discount for a specific amount and product will catch their interest.
7. Use customer feedback and improve
Now that you’ve been running your business for a while and you’ve got your first customers, it is very important to collect their feedback and use it to improve your product or services. There are many ways out there how we can collect customer feedback (review form, calls, direct messages). Some of them might affect you emotionally, you have to be ready for it. But at the end of the day, in every customer feedback there’s your customer opinion, which is something that you have to care about if you want that particular client to use your services again.
There are a couple of things that in my opinion every startup founder needs to know, although they might not sound very motivational.
Be ready to work very hard, if you aren’t ready for this, don’t even start.
Believe in your concept and do not give up.
Do not expect too much in the first years.
Keep an eye on your competitors.
Be ready for an emotional rollercoaster.