People often wonder how startups can survive when they don’t have anything to sell. The product or service is just a glimpse of an idea, or better yet, a few lines of code written on a night of inspiration. What does it take to start with a dream, build a whole reality upon it and stay strong along the way?
The sales before the launch
Even if your product is not ready yet, your startup sells more than you can imagine. The process begins the second you start thinking about that product and it never ends. It just gets more complicated along the way.
So, what do you sell before the launch, before having a product or a service ready to be used? At least 4 things, let’s take them one by one.
The idea behind your startup
This is the first step, even pre-startup. You have an idea of a product or service and you think it will be a success. It doesn’t even need to be revolutionary 🙂 As long as you believe in it, it’s enough. However, at this point, you have to begin convincing others as well that it’s an amazing idea and it truly stands a chance. That’s when you start selling it.
You sell it to whomever wants to listen. Many would consider this pitch-testing, but I prefer to call it a sale.
The promise of being profitable
The second you set off on your startup journey, you should be making this promise to everyone. Including to yourself. It’s the trigger that will put thoughts into motion.
Many people think their startup can become the Uber of ZZZ, burn cash indefinitely, and no one will ever ask them to become profitable because heck, they just saved that ZZZ industry. Bad news, it doesn’t work like that! At some point, it has to break even. And the next natural step is to become profitable.
It’s not cool anymore to be in pursue of profit, I know, just look at the unicorns. Had Max Weber lived these days, his life would have been quite tough 😉 However, regardless of urban startup culture, profit should be the purpose of any economic endeavor. If it’s not, then you shouldn’t have started a business in the first place.
The prospect of becoming a big player someday
That’s for your investors. If you want to get venture capital for your startup, you’ll have to prove VCs that the ROI they’ll get is worth doing it.
For this sale, you will need hard facts, the ability to make credible forecasts for the future based on figures from the past and the present, great pitching skills, and a bit of luck. That bit of luck stands for being at the right place, at the right time, with the right people. The rest is just hard work.
The illusion of a big pink unicorn
OK, this sounds weird, why in the world would you ever need such an illusion?
Because days and nights are tough in startup life. Because you’ll still have to work when others go to sleep or are having fun. Because your vacations won’t be longer than a few days (when anyway you’ll feel guilty for leaving your baby behind), while others enjoy many long holidays. Because your family will have to startup together with you, always lending you a shoulder and ready to give up on many things for your sake, like time spent together, money invested in your dream, and so on.
The illusion of a big unicorn makes the startup life more pink, more bearable 🙂
How do startups survive?
Now, this is what your startup keeps selling the moment it was just an idea in your head, all the way to the real world. How do you make it survive?
Do the math
Try to forecast how much time and money you will need until your product or service will be ready. Add 40% more, and what you will get is the amount necessary in the first phase. Use your own money or get a loan, convince family or friends to finance your dream, get one or several co-founders. Other options include angel investors and crowdfunding, depending on what you actually do.
Build the core team
In the meantime, start building your team. These people won’t be just employees, they will be your partners. They have to believe in your dream and be ready to support it. Remember #1 above? That’s when you need to sell your dream to your core team. They need to believe in it, otherwise they won’t be able to help and join your effort.
It is very important how you choose your teammates. Here are some tips on How to Find the Best People for Your Startup from my co-founder’s many years experience in the software industry. Choose your team wisely, it can make or break your business.
Up next, keep using the initial money and try to reach the break even point. Another option is to get funded to support your journey to breaking even and beyond.
Whatever choice you make, the path is paved with hard work and continuous sales execution, even when everybody thinks there’s nothing to sell 😉