Next step after idea crops up in your mind?
Can someone please recommend me the steps one needs to take once you have a concrete idea about what you want to do? I have the idea but I don't have the capital. Whom should I pitch it to in order to get funding for the idea.
8 answers:
I would say (imho), before you even start talking to investors start with getting as much documented as possible. Investors usually want to see a thoroughly planned business as a bare minimum to consider investing. The more developed your idea is towards a MVP, the better your chances will be of securing an investor.
Good luck with your project.
Mustafa raises good points. Investors want a clear understanding of how you intend to return their money and what timeline. Being pre-revenue makes this near impossible.
What you can do, is create a breakdown of what you need to build an MVP, get operational, and get feedback from prospective customers. Then begin bootstrapping as much yourself, and potentially trading some equity with key individuals for their time and expertise.
Outside of that you're probably looking at a 'friends and family' round for investment unless you have the contacts and track record to attract funding for the venture.
Hope this helps, all the best with your endeavor.
The most important thing at the ideation stage is finding/validating product-market-fit. What is exactly is that? Making sure the product or service you're building is something that people want. Most startups fail not because of lack of talent or ideas, but due to lack of market need, and poor execution.
If you're in the ideation, stage, my suggestion is do not start building your MVP yet. As an associate at a Venture capital firm, I can attest that a business plan or powerpoint will not help you at this stage. Ideally you want customers with validated interest (such as pre-payment for a product on Kickstarter, pre-paid subscriptions for enterprise customers...etc) and evidence that you have "interviewed" or talked to 100+ potential customers. Individually.
That is super important, in fact, more so than projected financial models and fancy market sizing analysis. Everything at this point is hypothetical, so you want to bring your idea to the real world first.
Y Combinator's CEO, Micheal Sibel has an amazing video on how to find product market fit and your first customers! It even includes what type of questions you should ask!
https://youtu.be/qypLB6fBvw4
Validate your idea: Make your assumption, and in order for it to work have 1 assumption related to the problem, 1 related with the solution and 1 related to the implementation. https://www.youtube.com/watch?v=gbArObiU1Y0
Like Yilan said, it's best to first get your idea out there. Many times, we entrepreneurs think our ideas are worth gold but they're not. It really comes down to execution and the determination to be consistent and not giving up when facing the first few obstacles. Get people's opinion, write your concept down in as much details as possible. Get feedback from your potential target audience by searching them out. Perhaps put up a landing page somewhere and give people early access in return for filling out a survey. Get pro-active and learn to ideate. At some point, it'll always remain a risk to venture into something new. Don't be afraid of it. Embrace it but just make sure you're going into it with as much intelligible information as possible.
Validate your idea by using #nocode methods, and ask for a sale on an interface. Price it high enough to where your cost of acquisition is worth it.
Get to know your user, and modify the product offering to cater to them.
Don't be afraid to spend $ on market validation. I find many people would rather spend the money on the development when they don't have enough market validation and are too afraid to market test with at least $1000.
Don't spend the money on ads. Instead, host a dinner, host a group, have a meetup, and engage with your audience directly.
Gain More and More Knowledge About your idea , Do a market Research , find is there any similar company is offering the same , what makes your idea different ....? After all this if a Wow comes in your heart then you are ready to launch your idea.... : )
Make sure your "idea" solves a deep problem. I like to use the "5Ys" method.
Ask yourself why this is a good idea. Then, when you have an answer, ask why that's important. Repeat this 4 more times, and you should have a pretty deep, emotional problem that people are looking to solve.
For example, let's say I have an idea for alternative, non-traditional investment vehicles.
Why is that valuable? Because it's cheaper and has a higher rate of return than more traditional investment vehicles.
Why do people want something cheaper and with a higher rate of return? Because people want to have more money.
Why do people want to have more money? Because they want to retire earlier.
Why do people want to retire earlier? Because they want to do fulfilling things before they die.
Why do people want to do fulfilling things before they die? Because they want to feel like their life had a purpose.
So now, after asking 5 questions, I've moved from thinking I wanted to help people save money, to wanting to help people feel like their life had a purpose.
Got really deep, really quickly. But now I have a MUCH more powerful purpose, and can potentially propose an even more powerful and compelling solution to the REAL problem I have now uncovered.