FIVE key questions to ask when you first launch your startup!

you’re thinking of stepping into the challenging yet exciting world of building your own ‘startup’! This will feel like it’s the most adventurous…

December 6, 2021

So you’re thinking of stepping into the challenging yet exciting world of building your own ‘startup’! This will feel like it’s the most adventurous time in your journey, where ideas are all coming to you from all around you and the thrill of getting started is keeping you awake all night – at times. It’s a wonderful feeling!

Come to the end of the first 90 days and some of that excitement and thrill has died down a little when you realize that you are still not even 10% of where you wanted to be. Your bank balance doesn’t give you much relief and even with maybe a prototype, it seems that every door you knock on is opening, only to say ‘NO’. This part of the journey is what they call ‘Challenging’. However, know that you’re not alone. Sometimes, asking yourself, the following 5 basic questions at the very beginning, can help make this wonderful, yet challenging journey, much easier, focused and hopefully an enjoyable one.

Why are you starting up?

This is the MOST IMPORTANT question. Seems obvious enough, however, most startups fail due to the lack of being able to answer this very simple question. WHY?

The ‘Why’ is more important in the startup journey, more important than the ‘How’, as it is this ‘Why’ that will give its founder the inner strength and motivation to keep pursuing this dream, even when no one else will believe in it.

Why really do you want to invest your time and money into this startup?

What about this idea is appealing to you?

Are you thinking of this startup journey because of a true passion or as a means of getting away from something else?

Do you want to get into it because it’s a trending idea?

Whatever your line of questioning is, asking these questions to really clarify the ‘WHY’ of getting into this startup journey is crucial. Finding out the exact ‘WHY’ in itself will help you go on, even when times get tough until success is achieved.

Are you solving a pain problem?

Answering the ‘WHY’ will mostly answer your personal reasons for taking action. However, there is a clear difference between taking action to build a startup to taking action to solve a problem. There is no business in the world that has started or exists that doesn’t solve a clear problem or pain point to one or many people. Therefore, it is very important for a startup founder to be very clear about the problem or pain point that this startup product or service is trying to resolve. Even if it is in the area of creativity or innovation, the product or service you’re building must solve a specific problem or pain point from day one.

Otherwise, it will be a ‘nice to have product or service, which people can go on without, which leaves the success of the startup for the chance. Most people would buy something if there is a clear need for it. Even if it is an expensive item or service, it must serve a purpose and a pain point.

For example, Uber reached its success so fast as it catered to so many people across the world, who didn’t want to spend to buy a car but wanted the comfort of travelling in one. On the other hand, it solved the problem for those who has a car, but it wasn’t used enough and needed a way to make more income to maybe pay off their car financing. So the founders of Uber found a win-win for both drivers and passengers which In turn answered a problem, globally.

Another such good example of solving a pain point is AirBnB. Before if you travel anywhere in the world with family or alone, booking a hotel, motel or inn was the norm. But when there is no availability due to high demand, but an absolute necessity to be in that particular city, travellers end up having to either cancel the trip or book in advance or at a very high price. This was the gap, founders of Airbnb were trying to fill, while also making some money by renting out their extra space, which would help them pay their rent. Again, a good win-win relationship was created, and an international business was born.

So, identifying the problem statement of your startup, will clearly define your purpose and help others get on board.

Why should the market validate your product?

Once you know your ‘WHY’ and ‘PROBLEM’ statement, you may be excited because you’re sure this is going to be a great hit. Before you jump into putting your entire savings into the business, it is important to ‘VALIDATE’ your idea. This means, while this problem is true for you and the answer you found resolves the problem FOR YOU, for it to be a business, it must also solve the same problem for others also.

In other words, you must find out if other people also have the same problem and if your solution will solve that problem for them. One of the easiest early-stage ways of doing this ‘Validation’ step is by talking about the problem and your solution with your immediate friends and family. This is a good indication of people in similar situation/age category/area etc has to endure this problem and if your solution can resolve it. There may be others who may have the same problem, looking for your solution.

This is an early-stage market validation step. This step can be further expanded by talking to more customers at events, exhibitions, places where your potential customer might be etc. The more market validation is done, the higher the chances of fine-tuning your solution proposition to fit the consumer.

How do you scale your business?

Now that you have your ‘WHY’ and the ‘PROBLEM’ clearly defined and done a market ‘VALIDATION’, it is important to think of how the business can be scaled. The first three questions would have given a very good idea of the problem-solution fit and profiling of your potential customer. This information will be useful when figuring out how to scale the business.

Initially, you would have sold your solution to friends and family, then slowly but surely word of mouth would have expanded your business to friends of friends and so on. There will come a time when this sort of scaling will not be enough and you need to either have your product available at more locations, engage other business partners etc. Deciding on your startup scaling strategy will be important in deciding the future of the startup and in answering the next biggest question.

Do you need external funding?

When you have decided how big you want the business to be, the question of funding will come into the picture. Funding your startup, up until this moment, would have come from you, family and friends. However, when approaching scaling, this is when fundraising for startup options will arise.

Startup funding can come from many channels. The most common ones are Venture Capitals, Angel Funding, Bank Loans etc. There are steps to take, questions to ask yourself prior to obtaining external funding. However, if you do decide to go on this road, have a clear plan of utilizing these funds to scale up your startup. As they say, a small piece of a large pie is better than a large piece of a small one’.

This is a key moment for startup founders. Deciding on the funding you need to take your startup to the next level will require careful planning and thinking. Once you know how much funding you need, where will you find it?

Asking these above FIVE questions will help you align your thoughts and focus on the vision for the startup and give you a clearer path to take. This will help you understand and appreciate the reason for all the sacrifices you will need to make and the challenges you will most likely face, in setting up and most importantly, will keep your purpose alive in your mind.