Having your own business and being your own boss is an appealing prospect for many. Do you have what it takes? Some boxes will need ticking ahead of diving in deep.
To start a business, you need a good idea, a lot of energy, self-belief, time and cash. Starting young - before your life might be consumed by many other commitments - is commendable as it brings many of the above qualities to the table automatically – apart from cash that is.
Your start-up idea: turning ‘old’ into new
Ideas for start-ups don’t always have to be completely novel and untested. Often ‘old’ ideas or concepts can be stripped back to retain the good bits and replace the bad/outdated bits to create something fresh and new. A good example of this is Circque du Soleil, founded in Canada in 1984 and now the biggest contemporary circus entertainment producer in the world. The founders of Cirque du Soleil looked at how circuses had become outdated (the animals, the acts) but how people still, however, had a nostalgic love for the circus, so they took away the seediness and ‘oldness’ and made the circus spectacular and glamorous. They created a show that would be modern and inspire awe. And they wildly succeeded as the Circque du Soleil has dominated the circus-world for decades.
Fintech, from your Revolut card and Stripe, to your online banking platform, are all other examples of how the ‘old’ was peeled off the banking business and where the core activity – payment transactions in this case – was kept but given a shiny and superfast new coat. The parts of banking – a.o standing in a queue, depositing cheques, exchanging foreign currency, checking your balance – became a thing of the past and can now be done in seconds on your phone. Turning ‘old’ into new is doing something that already exists, much better. Look at how an existing business is working; what else would you like from it (which they are not providing) and how this business could it be disrupted. This might be the birth of your idea.
Or your idea is solving a problem
Uber (founded in 2009) is one of the best examples of a company solving a problem. And, the bigger the problem you solve, the bigger the opportunity. In the pre-Uber days, taxi transport – especially outside cities - was outdated and inefficient, notably also in the Bay area in the US (Uber was founded there), where taxis were not readily available and expensive. But people had cars and could make money out of an asset they already owned. Uber applied the idea of crowdsourcing to transportation and transformed it totally. Besides, Uber simultaneously removed the problem of taximeters and cash payments for cabs, eliminating anxiety for passengers stressed about if their funds would suffice for the journey. Transportation was a problem begging to be solved at the time. Today we couldn’t really do without Uber or similar companies as we have organised our lives around it. And the word Uber, btw, means the ultimate, the best; an effective name too that has also become a verb today. Much like Google.
Next steps: the market need – your competition – your team
Once you have settled on a preliminary idea, road-test it. Is your product/service/solution as ‘needed’ as you think? Does it solve a problem? Check out your competition (if any) and decide if you can do what they do better and cheaper? And if not, maybe you can’t outcompete who is already in this space and reconsider your proposition, moving on. Ask your friends and family what they think of your idea and try to explain what your bizz is about in one or two sentences. If they immediately ‘get it’, this is often a good sign.
A total of 42% of businesses fail because there was no market need for them, so this is THE key part of any start-up to get right before all else.
Whom you start your business with and the team you create around you are equally make-or-break. It is much more fun to start a business with someone else than going solo. Successful start-ups are often set up by close friends or siblings, in fact most businesses are (exceptions of course are all of Elon Musk’s and Branson’s ventures and if you have a similar big ego, then setting out on your own is definitely an option). But with 23% of businesses failing due to the team being wrong or not working well together, looking at whom you work with, what their skills and ambitions are, is vital to get right from the start.
Last puzzle piece: your funding
How to fund your business? Can you afford to start and get through the first funding needs yourself, out of your savings or via help from friends & family? It will be hard to start without any of your own money. Make a financial plan and decide where to spend the cash you have. Shoe-string budgets can work well as it will force you to be creative but - if the business makes it through the first year - more funds will be needed. The good news is that funding for start-ups has doubled in the last couple of years and funds – and grants - are available from multiple sources. Global venture funding reached $643 billion in 2021, up from $335 billion in 2020.
If you are ticking all these boxes, then being an entrepreneur may be for you. Don’t try to be perfect, just start and adapt. And keep improving and learning. Get inspired by the many success stories and learn from other start-ups’ journeys. Listen to some inspiring young founders’ stories here.
References & Links:
https://news.crunchbase.com/business/global-vc-funding-unicorns-2021-monthly-recap/
https://www.talksforteens.com/podcast-index
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