by: Todd Nuckols
Well, I am no expert on the topic. But since I have attempted to start a few companies, been lucky enough to know a few people who have done so successfully and read on the topic often I will take a shot at answering: What come next? What is the first step to turning that idea into reality? Well first couple I suppose.
Know Yourself, Plug In, Find a Partner, Build a Deck, and Act
It is important to realize that entrepreneurs and businesses come in several shapes and sizes. And your first steps vary depending on where you are headed. Let me suggest a few variations (in order of my background and understanding).
Internet property/software product business: So you know you are sitting on the next Facebook or Google! Excellent, now get ready to realize that if you have a great idea in this category so do about 20 other people! And many of them know more than you. That means you need to win on execution and if you really need to scale quickly you will be looking at seed and venture funding but that is not the first step. The first step is get someone else to believe. Suggestion: The best way to do that is (my suggestion) to build a minimum viable product (or MVP) and/or start socializing your concept for feedback as quickly as possible. Now if you do not have the talent to build it yourself then find it through events like Startup Weekend (second plug - rva.startupweekend.org), co-working spaces like 804RVA or a local tech meetup! (See Find a Partner)
Service provider/freelance: Here you are essentially selling your talent, typically by the hour or project. As a result it will be harder to finance the business with outside capital. So the first step is that first client and understanding your value proposition, rates and utilization. Fairly straight forward but not always easy! Suggestion: Get that client and watch those margins on delivering service!
Small business (like restaurant ownership for example): In this category you may need some capital financing but in general the business goal is not to achieve ground breaking scale in a matter of months or a few short years. In fact, your goal may be a successful local company that pays the bills nicely. Well, good on ya! Small businesses can fall into special program categories for bank financing or may have physical assets like a location or inventory to leverage. Early keys are finding effective ways to establish your identity in a local community without getting too deep into debt. Cash flow is king in small business. Admittedly, I do not know much about this type of business structure but enough to know it has unique challenges. Suggestion: Think about small business financing and local marketing. Get that business license!
Product/invention (physical good) business: Inventors live here. On the consumer side this can get real complicated, real fast. Yes you have a physical product but that will require inventory, financing for development and real solid channels for selling. In fact, manufacturing may be involved. You need to make an early decision about licensing and be careful about protecting IP and building the right go-to-market relationships. Suggestion: Determine a path – license or build and find a partner channel to help crack the market!
Life sciences: Ok, this is maybe the most complicated of them all and if you are in this category you probably already know the first steps. If not, seek out someone who knows this market. Suggestion: Find a mentor (seek out InnoVArium locally in Richmond) –because I have no clue.
Once you know yourself you need to find your community. The best way to know how to move forward is to follow someone else who has been down the road. It may take a little while to network into the right situation and identify a good mentor but it is well worth it. In RVA you can consider the following (and these lists are clearly not all inclusive, just starter ideas and sometimes they hit multiple categories)!
Internet property/software product business > StartRVA (meetup.com/startrva), Venture Forum (richmondventureforum.com)
Service provider/freelancer > 804RVA (804rva.com), Social Media Club (socialmediaclub.org/chapter/Richmond-va)
Small business > BNI VA (bniva.com)
Product/invention (physical good) business > Virginia Innovators Network (vainnovators.org)
Life sciences: VirginiaBio (vabiog.org) and InnoVArium currently located @ the Greater Richmond Chamber of Commerce – GRCC,
Find a Partner
If you are still reading you now have an idea, know where it fits and are in the right community (which should lead you directly to your next step). Now, if you do not already have a partner – find one! The one thing everyone knows about building any business is that it is extremely difficult and at times very discouraging. You will need support and accountability to stay with it no matter your passion.
So, with all my heart let me recommend finding a partner. As I have often heard, “If you cannot convince a partner your idea is great then how do you expect to convince anyone else”. This is particularly true for those pursuing web startups! Partnering is all about building passion for the long term and starting your team.
Now, for those loners that may just be freelancing then maybe a partner is not right for you but certainly you should still be finding support outlets to drive sales, share creative ideas and encourage you when times are tough like co-working communities.
Build a Deck
I am not a fan of extensive business plans which is the often recommended official first step. In the world of tweets and lean methodologies plans can seem heavy handed. But a deck? 10 slides that help you lay out your idea and approach is critical.
Realize that this is more about personal discipline of thought than creating and following a plan come heck or high water. As a founder you will be required to lead. To lead you will need to communicate. If you cannot communicate your basic value proposition, competition and core financial assumptions/needs quickly then you are in trouble from the start.
In many categories you will be asking for loans, investment or encouraging new people to join your team. In order to do this you need to be able to present your thoughts with clear call to action. Forcing yourself through a deck and sharing it with others for feedback prepares you for these conversations! Last slide: Next steps – that will get you motivated.
And keep changing that deck and last slide until you arrive at your destination! And if you cannot even get through a deck seriously consider if building a business is right for you.
For those in the internet/software game seek out one of many resources on this topic alone: http://techcrunch.com/2012/01/07/pitchdeck/ & http://www.quora.com/Venture-and-Investor-Pitches/Where-can-I-find-examples-of-successful-Series-A-pitch-decks
Have a bias towards action. It goes without saying that the first step is A STEP. If you don't care for any of my suggestions then find something you do care about and pursue it. ACT.
Now it is your turn. Would you like to share your first steps with others by comment? Add to this list? Trash it and recommend your own. Jump in!