Building a Startup: How much money do you really need?
Thanks to the Internet, entrepreneurs can now do more than ever before - especially when it comes to building a startup.
How much money you really need to build one depends on your startup idea, but most of the time, you would want to bootstrap and build a prototype that gains enough traction for your startup to generate revenue over time.
How much money you really need to build one depends on your startup idea, but most of the time, you would want to bootstrap and build a prototype that gains enough traction for your startup to generate revenue over time.
#1 - Ask the Right Questions and Validate Your Startup Idea
There was once a senior of mine who wanted to start a business after graduation, but he had no idea how to get started.
He did the usual - he Googled for ideas, information about building startups, and he started seeking the advice of others.
I was 18 that time, running a website-building business and read a lot of business-related, finance and management books. I introduced him to the lean startup methodology and agile project management because his startup ideas had something to do with software development.
He refused to share his idea, choosing instead to give a rough idea of his startup because he sincerely believed that I, like many others he talked on, was going to steal his startup idea from him.
He received great advice from veteran entrepreneurs, professors and friends, went about to get a business loan and kickstarted the development of his startup. One crucial thing that he missed asking - did the market need his startup product?
He should have validated his startup idea before jumping into building the product. He invested a huge chunk of money (some of it borrowed from family and friends), spent a lavish sum to rent an office, renovated it and squandered most of his cash hiring the wrong people.
He ran the business for 3 years, made no profit and never finished the development of the product. Needless to say, he left his poor investors in the lurch and no one has heard of him since.
For more useful tips, check out this Ultimate Step-by-Step Guide to Building Your Startup by Startup Storey.
He refused to share his idea, choosing instead to give a rough idea of his startup because he sincerely believed that I, like many others he talked on, was going to steal his startup idea from him.
He received great advice from veteran entrepreneurs, professors and friends, went about to get a business loan and kickstarted the development of his startup. One crucial thing that he missed asking - did the market need his startup product?
He should have validated his startup idea before jumping into building the product. He invested a huge chunk of money (some of it borrowed from family and friends), spent a lavish sum to rent an office, renovated it and squandered most of his cash hiring the wrong people.
He ran the business for 3 years, made no profit and never finished the development of the product. Needless to say, he left his poor investors in the lurch and no one has heard of him since.
#2 - It is a misconception that starting a startup requires a huge capital to be successful
One of the most common mistakes that startup founders make is to build a product no one wants to pay for. The fastest way to make this expensive mistake is to spend your investors’ money into building your product or a complicated application.
Instead of looking to investors to fund your startup, focus your efforts on learning how to write a compelling, working to hone and shorten the critical points until you get a refined "elevator pitch" (a 30 second explanation of your startup idea's merits).
Then pitch the idea to random strangers around you so you can get used to common questions and have time to figure out all of the answers, and hone your pitch even more. This will only cost you your time, but not money.
Keep sharpening your skills in planning and management. Talk to startup founders who’ve already made it, and you will eventually do well in your startup.
Instead of looking to investors to fund your startup, focus your efforts on learning how to write a compelling, working to hone and shorten the critical points until you get a refined "elevator pitch" (a 30 second explanation of your startup idea's merits).
Then pitch the idea to random strangers around you so you can get used to common questions and have time to figure out all of the answers, and hone your pitch even more. This will only cost you your time, but not money.
Keep sharpening your skills in planning and management. Talk to startup founders who’ve already made it, and you will eventually do well in your startup.
For more useful tips, check out this Ultimate Step-by-Step Guide to Building Your Startup by Startup Storey.
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