What is the first priority for Start-Ups Once on the Ground with an Idea?

Wish you all a very Happy New Year 2012

It was heartening to see the responses to the same question on LinkedIn. I thought I would summarize the leanings of many who commented with PASSION.  If I do not make it available to people who do need it, I am not doing justice to the Ecosystem of Entrepreneurship. Here is the snapshot of the Overall Results. 

The Result

First -351 Responses :

   

     (Source:  Poll Results from Linkedin )       

The Formula for Startups to make it to be in existence based on 351 Responses seems to be:  Focus on the Customer Acquisition while building the Team  and support the entire venture with Right Investments at each stage. Building a good advisory to support in matured thinking and building a BRAND to remain in future.

I would encourage you to write your comments to improve learning from this post.

Start Looking for Customers    101 (29%)   

I was told when I started that you need to see the First Rupee / Dollar as quickly as possible to make it multiple. Because the first rupee/dollar entered would teach you the value for money and the value that your customer want.  It is essential that you must have your paying customer/client for the services/products that you felt a need. It’s also mentioned in some of the comment that your product IDEA is proven when a customer/client wants to pay for it. While there is a need for good people to be around to support you along with a financial system to kick start your operation not every business is interlinked so much quickly before approaching to Clients. Building the awareness of clients, areas of focus to reach them and your approach in making them to pay for your product/service makes all the difference. Identify the potential ways to reach them through Industry Associations, Business Directories, Networking’s, Social Media, Search Optimization, Attending an Exhibition/Seminar/B-School Programs…If you can’t pickup a phone and ask for business with a prospective customer you have a challenge. Remember  “The only way in Building Business is getting your way to customer”

Comments on Customer Acquisition:

Jo Policastro • As an senior entrepreneur at the gates of finalizing a three part perspectus for generating seed money to help launch a website for my Kamaleon Shooz product (www.mamarazi.com/kshooz2/) I am most torn between the two answers of raising $$ and/or looking for customers. However, what comes first the chicken or the egg? In this economy proving to investors (other than those who invest purely for their love of you, your product idea, courage, energy and endless enthusiasm) their many concerns can be seriously lightened if you are able to show them some traction in the market, customers and even small amount of revenue is better then none.

Kenneth Christine, MBA, Founder/Consultant • Any business that sell goods and/or services must look at what customers need and value, and provide it accordingly, or risk losing those customers to a competitor. Start-up companies in particular should base all their activities, especially their marketing efforts, on the basis that customers are the most important assets the company possesses and that it is absolutely a necessity to assess the prospective value of those assets when developing business strategies. Therefore, businesses must realign the focus of advertising and marketing from the product to the consumer, and allow the consumer to pull the information that they desire about the business's offerings.

Gagandeep Dhondi • It all depends on the planning and strategies building and your know how about yourself and the market you are catering to. Along with above a good/right mix of resources in place to make them happen in the market.

 Dan Epstein • No matter how good the idea -- it's worthless without paying customers. It can take months just to get your first customer. Sometimes it's just a matter of them not wanting to be the first. In the early stages. good people can really help -- if they're fantastic sales people. If they can get the orders.

Ramesh Babu • I believe that there is a whole bunch of things to do apart from the above list. However, this list could be a good starting point. Worth mentioning is a good blog post by James Altucheron on 'The 100 Rules for Being an Entrepreneur'.http://www.jamesaltucher.com/2011/04/the-100-rules-for-being-an-entrepreneur/ Do pay special attention to the interesting comments posted on this thread.

Bill Roberts • If you don't have customers for your product, you don't need any of the following.

Robert Campbell • Unless you are extremely wealthy or your business involves a kool-aid stand, without customers to generate revenue you will starve before you ever build your brand, find investors, or accumulate worthwhile advisors/employees. Not even a close second on this one.

Jenny Okonkwo, MBA • Hi GR, it may be challenging to make a tangible success of your idea without an available market.

Liew Wei Da Andrew • Depending on the nature of your product, if your product focuses on building extensive users and getting users to use the product intensively, then you need investment first to get the right people and get the product working. If your product targets a small and selected base of customers, then you need to get cash flow from your customers. There are no hard and fast rule but it depends on the resources and network that you have. VCs will be very interested if these entrepreneurs have already got some users and cash flow or a huge number of active users.

Ann Binsted • If you can't sell it you are doomed. I have had many friends "start their own business", but they can't pick up the phone and ask for business. You can have a great website and brochures, and even capital (which will run out eventually), but if you can't reach out to connections and potential customers and ask them for their business you will not succeed. Important: be ready for NO. This is part of running a business. Not everyone initially wants what you have to offer...YET. Sometimes NO, means...just not right now. Be persistent and don't get defeated too easily. Running a business is not as easy as it seems. You will learn ALOT along the way!

Hire and Retain Good People Who Contribute 78 (22%)

People make the difference to your business & customer/client. You would be known by people you associate with.  Your teams always represent your outlook and vision even though they are diverse in their background. Having that startup team who would like to take your vision to next level and be part of the Critical Mission. It is required that your vision is imbibed into their future plans and you must help them to see it clearly. That makes the team to be with you and stick around. It’s also mentioned that if you have started business is not to do it by yourself all the time… You need hands to translate your way of looking at business and execute to survive. You would have the initial churn in the teams and it is for your good. Allow it to happen, if they have not spent enough time with you and gone through the tough times, they are not for your organization. Give them the space to explore, experiment and fail (but not repeat).. that creates the ownership in developing the business.

GR Response to few comments on People “The first few are very very critical to make sure that the whole direction is in a positive direction.. However, the first team should be able to see the same vision and translate in work output (Delivery) in terms of revenue/Product... Being customer centric to deliver would always help in achieving the initial progress...”

The success of the enterprise is the success of “TEAM” – The Enterprising And Missionaries

Comments on Building Team:

Imran Anis • I believe it’s about team work....so should arrange a best team from the surroundings which will grow the organization/business/and the idea as well....!

syed shakeel • Its truly depend on the market still you need people to market & make visible the product to customers that will happen only when you recruit good staffs who can contribute beyond the expectations. Individual performance is important in any pre-opening stage If your service match with your quality then you can create the brand

Tataverty Prasad • If you are working on an idea you would have already planned for few basics like investment, customers, branding with good advisory. All this will materialise as per plans only if you have good talent to convert. Most of the companies have a conservative approach on hiring best talent when they start and hence value addition from each accountable area is minimal resulting in damage control. May be as a initial set to success, right talent and customers both are key drivers.

Sateesh Deshpande • None of the above if the questions says it is still at the idea stage. You need to have your ducks in order with a business plan that looks like an action plan (with WBS). Every business has different priorities. No two businesses are alike. This is not taught in classrooms and books. Talk to a current and retired businessman and he will tell you what to do. A bookish approach does not produce successful businesses. A book can include a good business case model for citation but can never produce one.

Khurram Khan • As per my point of view regarding to initiate any start-up. We have to make a niche market [in other words, make a brand which will help consumers to get facilitate with it].

Kamlesh Thakkar • I would say set up your short term and long term objectives, accordingly plan how many people you will need to achieve those objectives. Start building up team and customer base. Having task oriented team will help you focus on other business needs like funding, advising and key customer management.

Paul Brinkman • whether you bring on a partner, a lead or a start-up, ideas are fueled by people. I've never seen an idea take off without a team on the ground.

Mariianne Crary • 1: Build small initial team/founders, 2: go talk to your market. Don't have to "look for customers", but you do have to get customers/users involved in making your idea go from good to outstanding (if at all possible from a patent point of view). 3. Get statements from them, if you can, in support of your idea after they have been involved. Use statement to support you in search of investors.

Ravi Kikan • Hi GR, I think a great team is the backbone to push the startup culture in a company and create the backbone...Acquired customers will drain out if there is no good team in place to service and cater....Though customers are critical but getting the backbone is must ! My 2 cents.... Best Ravi Kikan Startup Specialistshttp://linkd.in/uUs0Mo

Ivan John • People and their Ideas and management of the same is the Foundation of all success.

Kanchan Sharma • Acc. to me unless and until you are not equipped with potential workforce, you would not be able to achieve heights.....

Wanda Doerner • An idea needs to be tested - researched - developed - with the right core of employees including a visionary with a business plan - you can then take a prototype to potential venture capitalists and investors. If they add their support and funding (I'm assuming you are creating something that has demand) ---- then you have a commodity that can be grown into a valued brand. Great question --- I'm sure there will be variances according to industry as far as how you proceed.

Alan Labianca-Campbell • While all of these are good answers, I'd say that the first priority is making sure you have the right people; key amongst which is a good CFO equivalent. The best products and best brands get to be developed by firms that have their cash flow in order but neither will get out of development otherwise.

Look for Investment     70 (20%) 

It may not be the third priority if in this result is third. But it is essential to run the engine(fuel) or body(Oxygen). Just thinking about Investment to bring may lead to a different focus of Business.   

Cash is the king before your King Customer/client pays for your product/service.. While at a startup level it may not be seen as critical unless it’s related to R&D, There is time to go to market… It is very essential in other cases during the growth phase. It is essential for the business owner to make the availability of Cash required for fueling the growth of the enterprise. It may be the first year or the 10^th year based on how you plan to build your organization.  As someone said the working capital for material, people is necessary and a great discipline is necessary for dealing with Investment. I wanted to repeat the statement by Sushil Kumar here which makes lot of sense and creates direction:     the simple Philosophy I learnt in Navy very much relevant in today's business environment....First FLOAT...Second MOVE.....Third FIGHT. Bottomline first start Floating (need working capital & customers), second start Moving (need good brand and people)...and third Fight (need Advisory board for competition & revenue)

Comments on Looking for Investments:

Sushil Kumar Kamble, PMP • Start up (I assume that you have validated your business plan with your advisory board)mostly fails due to lack of working capital which invariably consumes the major chunk of your steam to move forward and believe me customers will continually show you carrot till you exhaust your last punch of steam and orders will never flow or may flow but not in your expected time. Better start looking for Investment to sustain, survive and grow. Don't commit the mistake of building an army of people, it will kill your pocket and starve you with working capital. Remember the simple Philosophy I learnt in Navy very much relevant in today's business environment....First FLOAT...Second MOVE.....Third FIGHT. Bottomline first start Floating (need working capital & customers), second start Moving (need good brand and people)...and third Fight (need Advisory board for competition & revenue)

Stephen Russell • R&D, then the customers in a test Market basis, then Go Mass production IF possible on idea X.

Aditya Satsangi • Investment is absolutely essential

Eric Edwards • Time to money is the critical determinate. If you can put a product together and get customers in only a few months then maybe you don't need investors at least not right away. On the other hand if you are in something like semiconductors where it will take years and million$ to bring substance to your idea then your first priority has to be funding. You can't really expand beyond the founders without money for salaries. Customer traction will be difficult until you can show that you are for real.

Len Inkster CHI, I.S.P., ITCP, CITP • Cash-flow should be an answer. Cash is king. A startup is a business doomed to failure even if it has the best brand in the world, the best advisers, the best marketing and the best people working for it. If you don't have the working capital to operate then you are dead-in-the-water.

Build Good Advisory/Sounding Board  55 (16%)

The “egolessness” of an entrepreneur is seen in the Good Advisory he/she builds. It is essential to know the unknown and plan better.  Advisory/Sounding Board may be able to give you that exact direction and tell you when you could go wrong.  The advisory board also helps in building that credibility required to make your organization a great one… A good advisory can take you places.  Good advisory can add value to your organization without being on the ground that’s the power of people. Bring the diverse backgrounds of people to advise you on the competencies that you would like to have complementing support. That would help you to build a great client base, retain good people, bring required finances and building a brand. The sooner the startups look at this as advantage the better for them to achieve their vision. The advisory brings the Viability to the business and builds capability to deliver what you intend to achieve.

Comments on Building Advisory/Sounding Board:

Jerry Durant • Most make the mistake of pursuing customers without soundly establishing viability. So you end up pitching what you might be capable of doing but expecting the sales stream to fund your shortcoming. One little bump in the road... game over. So build viability first along with advisory support, then go after the business... you won't regret doing it and the company will grow fast & healthy.

Anand Radhakrishnan • I would say get a sound team or advisory board to build on that.  

Anton Vincent • Great answers all. I'd suggest the very first thing to consider is stress testing your idea. Roadmaps are great beginnings, but you are sure to run off the road in your early stage. Depending on the offering, it will have to evolve. If it is a really good idea, competition will come quickly. Very new ball game at the point. Clarify,evolve and get to the next level quicker than competition (especially the ones you cannot see today).

Start Building the Brand     47 (13%)

The Quickest way to get to conquer market is building Brand. Brand would be a combination of what you have (All the above business ingredients) and how it is perceived & experienced in the eyes of customer/client. There are so many ways that you can build your brand cost effectively. People recognition can be through the buzz that you make in the market place and supported with extremely good quality delivery. Be sure, the easier and quicker ways of branding has its downside, take a good advice and build your plan for Brand. Your brand is reflected in your Organizational Processes and execution methods including your cultural context.

Comments on Building the Brand:

Michelle Green • I say Build the Brand!! It's a quick, relatively cost effective and ensures you retain the customers you gain....God speed!

Kevin Rodgers • I think if you have a business that needs investment the likelihood is that you will find it easier to gain investment if you already have a set of customers or prospective customers in place. If you are self funding, the quicker you can generate funds to replace those you have spent, the better. Good advisory/sounding board has changed over the years because good advice is easier to find thanks to the internet. In the long term having someone who is not too close to the business to help you to make objective decisions is a useful foil to have. My reasoning for having good people and building the brand lower is because you can buy these services in from some excellent small consultants out there.

Keli Robinson • I'm going to say build your brand,get the word out,a buzz. Then from the response decide the next step or if you have not gotten the response you desire go back,make adjustments until you get the response you hoped for. You may find you need to move in a different directions to get the result you want.

Hillol Sarkar • Start building brand from day 1. Next step look for customers. Ask for more money from VC. Keep it in the bank. Give them 1% interest per year. Take control

Ziada Mall • I think building your brand is important. The bible even says a good name is far above rubies. People have to trust you and distinguish you from all the other gadzillion people selling the exact same thing as you.  

Other Valuable Comments: 

GR Reddy • Dear Kamlesh, Thank you for your inputs... The first few are very very critical to make sure that the whole direction is in a positive direction.. However, the first team should be able to see the same vision and translate in work output (Delivery) in terms of revenue/Product... Being customer centric to deliver would always help in achieving the initial progress...

Hillol Sarkar • To create value you must have a passion. Passion will be your success. Need to create BRAND. Everything will come to you. You will see the success. You will feel the success. Build Image Build Brand Build confidence build leadership. www.ago-inc.com

LaTonya Shaw 

i truly believe knowing your market is critical. this can drive product creation, promotion and sales.

Charles Maury • Since we are talking pre-start-up company, according to the posed question, I would suggest that those with the idea surround themselves with experienced talent in your locale who can advise you on the best formula for a concrete business plan which describes who, what, when, where and how it will all come to pass. Without a clear business plan to guide you through the mysteries of business start-up, it could take many starts and stops before you find a clear direction / methodology. With a business plan as foundation, you then know when and where to start the process of design / marketing / production / etc. Then when you have all that done it might be time to hire someone else to assist. (But only after you have the revenue (or funds) to pay for new talent).

Jerry Durant • All of the elements are need but there is a logical order in which they must occur. Otherwise you end up with frail companies that are prone to operational & structural failure. You can see those that don't follow a proper sequence, on a strong foundation, as a testimony to this premise. What is particularly disturbing is when entrepreneurship is carried out but without a sound understanding of these principals which jeopardizes employment, investor trust and market interest.

James Watson • GR, I think the most important answer is missing: #6: Build the product (or, deliver the service), and put it in the hands of a customer to understand what works, and what needs to be improved. In other words, Implement!!! There are a lot of great ideas that never made it to market, because the idea could not be implemented effectively. It makes no sense looking for customers until you have a developed product to put in their hands. Investment will be difficult to garner until you have a prototype. A Brand without a product is an empty promise. In lieu of #6, I'll vote for #2 - looking for cash to fund the building of the product. Jim Watson

Ramaswami Mohandoss • I think a clear roadmap would be the next step. The inventor/entrepreneur should be able to visualize the future at some level.