Entrepreneurship

Stoa’s Guide to Launching a Startup in 2021

Wondering what it takes to be the founder of a startup in 2021? We’re giving you the steps in this latest article.

Now is one of the best times in history to launch a startup in India.

In 2021 alone, over 20 different Indian startups reached the coveted “unicorn” status – a valuation of over $1 billion by a non-public company.

The combination of advancing technology, an increasingly skilled technical workforce, and a growing economy with more consumer spending power has ignited the startup sector this year. Investors are actively hunting for the next company to bring exponential returns, while prospective employees are sharpening their resumes to get a coveted opportunity at the ground stage of a fast-growing startup.

Whether you’re well into the planning stage of an upcoming startup or you’re still wondering if it’s something you want to seriously pursue, you should understand the steps involved. While the entire process of researching, launching, and operating a startup is beyond the scope of a single article, this post will provide a broad framework. You’ll need to invest more time into research and learning on your own, especially during the initial phases when you are trying to pin down a concept for your minimum viable product (MVP).

Discover an unsolved problem

Before you even think about a company name, organizational structure, or marketing campaigns, you have to decide on the problem you’re getting into business to solve. Most startups will pivot at least once, but the most successful ones keep a very specific customer problem in mind.

For example, Meesho is a social commerce startup that allows individuals to buy and sell clothing, jewelry, footwear, and other accessories. Cofounder Vidit Aatrey said the idea came about when the founders realized there was a huge unmet demand in India among people looking to start a business without access to funding.

Not sure what kind of problem you should solve with your startup? Here are a few tips:

  • Think about groups you know. Do most of your friends or family members work in a specific industry? What are some common challenges or obstacles? Look for patterns in the things they talk to you about – there’s likely a few ideas for a startup somewhere in there.
  • Consider your own problems. Lots of great startups were founded by people who were “scratching their own itch.” If there’s a challenge or obstacle in your life, think about a product or service that could solve it.
  • Validate your ideas by actually talking to people. It’s one thing to believe that a product or service might help people achieve a goal, but another thing completely for it to be true in the real world. Make sure you are confirming your ideas and theories with people who are actually dealing with them.

Design the MVP

Once you have an idea of the problem you are going to be solving, the next step is to plan how exactly you will go about doing that. This stage of running a startup is where one of the most important ideas in business and entrepreneurship comes into play: the minimum viable product or MVP.

Put simply: an MVP is the earliest possible version of your product or service that can gain traction with enough users to guide future development. An MVP doesn’t need to be a sophisticated offering with many avenues for customization and a suite of different features.

In fact, some of the best MVPs aren’t necessarily a functioning product, or anything similar to the final version of the offering. For example, Dropbox’s MVP was a quick three-minute video explaining how the final product would work. In less than a full day, the waiting list went from 5,000 to 75,000.

While it will take some work to get to the MVP, it’s important to remember that development isn’t finished when you’re finally able to launch. Without carefully listening to and acting on the feedback you receive from your MVP, it’ll be difficult to continue to grow your user base, which will in turn stifle the growth of the company.

Build your team

Once you have an idea of what your MVP might look like, you’ll probably need some help to build it. In the early stages, you want to think about the biggest gaps in your own skills and how you can fill that with your first few hires.

For example, if you are a technical founder, your initial hires will probably be skilled professionals who can help out in non-technical areas: sales, marketing, customer support, etc. In the beginning stages of your startup, you likely won’t have the resources to bring aboard a full staff, meaning you have to rely on hiring skilled generalists who can do several things well. To attract the top talent and get them to truly commit to growing the company, you may also want to offer a percentage of equity to the earliest employees – this is a common practice for startups.

A final tip on hiring: In the early days, it may serve you better to look for people with the right attitude and “soft skills” as opposed to people who are very capable in technical skills but may not be able to handle the startup environment. Working at an early stage startup requires an employee to be self-motivated and able to handle a dynamic environment.

Create a plan for beyond MVP

Once you have settled on the structure of the MVP, assembled your early team and started working on an initial launch, most of your time as a startup will be spent on making improvements to the product and growing your customer base. However, it’s still important to plan for the future of the company beyond your scrappy early days when the name of the game is to ship features as quickly as possible.

While you don’t necessarily need to have your company strategy mapped out several years in advance, it is important to think about longer-term goals from a broad perspective. Typically, a startup founder will look to accomplish one or more of three main goals:

  • Venture funding is an infusion of a large amount of cash from an investor or investment firm. With an investment of eight figures or more, startups can quickly scale product development and serve a much larger customer base.
  • An exit is when the company or a controlling portion of it is sold to another business or investor. There are many different ways to value a business, but one quick method is multiplying annual sales by anywhere from three to six, depending on the industry and growth projections. Founders will sometimes stay on to lead the business and may retain some stake in the company even after an exit.
  • National / international expansion is the replication of a product or service on a larger scale. This isn’t always possible depending on the business model, but is a very common method of unlocking growth after a startup has matured for a few years and the market is becoming saturated.

These goals are not mutually exclusive. Many of the world’s top startups end up accomplishing all three throughout their evolution as a business.

Final thoughts on launching a startup in 2021

Remember, this is simply an overview of the broad steps required to plan and launch a startup. There are entire books and communities devoted to individual elements of launching a startup, including creating your MVP and listening to your customers for feedback.

There are no guarantees in the startup world, but one of the best ways to give yourself a better chance of success is to become part of a community of peers and mentors that can give you advice. With the right support network, you don’t have to go it alone as you embark on the journey of planning, launching, and growing your dream business.

By 
Raj Kunkolienkar
December 7, 2021

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