What To Focus On While You Are Building A Startup

Building a startup: startup finance

When you're building a startup, it is important to choose what to focus on first. It's all about big ideas and small budgets. You shouldn't bother with stuff like hierarchies or armchairs. It's a startup, not a corporation. It's people with ideas, maybe just one person with an idea which needs to be realised.

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What you really need is lot of work. But most people are blinded by the illusions of self-importance. They have something to prove. And when you're like that, you start valuing useless stuff. It's very easy to start paying too much attention to the following five things...

Staff

Berry Hard Work by JD Hancock
It must be something in our genes. The long millennia of whip-wielding masters and shackled slaves have imprinted in us the desire to have someone sweating for us. Sure, it's nice to see an office full of people. But if they're not giving it their all, you've failed. If they're not the right experts, you've failed. If they're both hard-working and professional, but you've hired them too soon for them to be useful, you've failed.

But I can't do everything myself, I hear you say. That's what your funding is for: outsourcing. It's hassle-free and much more profitable in the early stages. You can concentrate on getting the work done without worrying about people who work for you. Of course, you must have some...

Money

1-10th oz Gold vs Silver funny-money by Raquel Baranow
...to start with, but not too much. Money is the source of all evil, remember? Too much money makes you lazy. You start buying all sorts of unnecessary and expensive services and equipment. The temptation to get that shiny laptop or that latest piece of software is almost too much to bear. After all, it will help you work better, the devil whispers in your ear.

It's one more piece of baggage that we have taken from our ancestors: belief in magic. Deep down, we hope the jinni from the bottle will do our work for us. Freeware has come a long way. Linux and OpenOffice aren't clunky as they used to be. And there are tons of other free specialized software that might provide just the right amount of help.

Space

Beat the machine that works in your head !!! by zeitfaenger.at
I'm not saying you have to work from home. I'm just saying you don't need to buy an expensive chair, steel desks and giant flat screens. It's cool to think of your startup as a secret base to conquer the world, but it doesn't have to look like a lair of a James Bond villain. Instead of wasting your money on costly furniture, you should use it to lure a genius or launch a great marketing campaign.

And it's not only about furniture. Do you really need an office? A garage will do. It was good enough for Bill Gates. After all, meeting rooms are just a waste of space. Which brings us to the next point...

Meetings

Parachutist Equipment by Program Executive Office Soldier
Meetings are so 20th century. They're just a waste of time nowadays. If you don't hold them, everybody will achieve more and feel less stressed. If a discussion is needed, it's almost always one-on-one, which will be more pleasant during lunch or coffee breaks.

The same applies to clients. They're interested in your work, not your fancy headquarters. Invite them to that cool bar you've discovered in the neighbourhood and you'll leave a much better impression anyway. When you really need to get a lot of people together in a room, the solution is the same as for the employees: outsource. Rent a conference hall somewhere.

Bosses

That's What She Said by Brian Rinker
When you are building a startup, it just another case of putting the cart before the horse. CEO, CFO, CMO, CHRO... Yes, it's nice to be a big shot, lording it over mere mortals. But not when you're a startup with three employees. You won't impress anyone and you'll just end up looking ridiculous. The more power you give to the bosses, the less powerful your startup will be as a whole. In the beginning, all you need is an accountant.

Le Jour ni l'Heure 7592 by Renaud Camus
It's really all about getting rid of one's preconceptions. You don't need much. In fact, you usually don't need almost anything in terms of resources. It's all in the mind. And all of the above can put too much unnecessary weight on your mind if you're not careful.

Building a startup is hard but focusing on important stuff is very crucial on your startup success. Work wisely and effectively to create a successful startup.

Please also share your thoughts on what to prioritise and focus on working.

Should a startup focus on scaling or launching?

Scale your startup?

In the early stages of founding a startup there's a whole ton of stuff that you need to think about. It can be easy to get way laid by minor concerns and you might begin to loose focus on the bigger objectives. Yes a nice looking logo is important. But when you are starting from zero and no one knows who you are, what you stand for or promise to deliver/produce it matters little.

So let's take a step back and think about things through a wide angle lens, looking at the bigger picture. Where should your valuable focus and energy be directed in the early stages of starting up? Should you be getting your product to market as quickly as possible or should you be concentrating on scaling?

What is scaling?

Let us first look at what scaling means before we decide if it is to be our main focus at startup. Put very simply scaling is a process that enables the business to expand rapidly.

Scale your startup?

Think of any global business. Okay we can use everyones favourite example of McDonalds to see how scaling works. It was Ray Kroc who first started the franchise system the business still uses to this day back in the 1950's. This has enabled McDonalds to expand rapidly and successfully across the world into hundreds of different countries and thousands of locations.

If Ray had attempted to personally oversee the construction, fitting, opening and running of each new restaurant in the chain he would have been a little tired to say the least. It would be totally impossible for an individual to keep on top of everything as the business expanded. By creating the franchise system for burger restaurants Ray Croc could empower other people to start and run an a copy of an already successful stand alone business.

McDonalds is the classic example of scaling, the process that enables a business to expand rapidly with a proven formula and automated systems.

Scaling or launching?

This is the golden question and the answer is very simple. You can't scale successfully unless you know something works. You can't know if something works or not unless you have tested or launched it.

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You need to know that there is a market and a demand for your product or service. By establishing this early on you can save a lot of wasted time and effort putting systems in place that enable you to scale.

So launching should take priority of scaling when starting up but it is good practice to be thinking about scaling to asses the potential the startup holds. Systems can be built into a startup so that when the time is right you can begin to scale but it must be proven that there is demand first to avoid a massive loss of time and money.

So how do you work out is there is demand for your offering or ideas?

Start local and test

Get your product or service out to the market at the earliest opportunity. That sounds like hard work early on but could be as simple as starting a Facebook page and inviting friends to join to gather some feedback on your ideas. Make sure you reach out to friends of friends and beyond as close friends can be overly supportive just because it's you and give a distorted source of feedback.

Test your startups potential

You need to establish as early as possible if there is a demand (market) for what you plan to give the world. Starting locally can be a great way to do this, particularly if you are producing a physical product. Even if your offering is online you can target local cafes, libraries or anywhere people are likely to have time to absorb some information about your exciting new thing.

Gather feedback, get opinions, have people use your service/product and get them signed up to future news and updates. Start to build a little testing base of people that are interested and excited by what you have to offer even if it is no more than an  idea.

If you really can't find anyone who shows much interest of the feedback is on the negative side, be sensible and head back to the drawing board. Just be thankful that you've saved time, effort and finances by not perusing your initial startup idea.

When should your startup scale?

It is a tricky question to answer in a one size fits all manor. Every startup will have different requirements and signs that is has reached a point when it can begin to scale. There are some indicators that tech gurus and investors alike would look for in a pre scaling startup.

Finances ready to scale?

Finances
Is there sufficient funding in place or available to enable the business to begin scaling? It will take money to actively acquire more customers and expand the operation of the business so it is essential that this capital is in place or accessible beforehand.

Backend/Automated Systems
Are the systems that work behind the scenes in place and ready for an increase in volume? As an example you need to have a robust payment processing system that could handle thousands more transactions that is currently does. If any part of an automated process fails you could easily loose customers and fail to successfully scale.

Dream team
Is there an amazing team in place ready to take the startup to the next level? It's a tricky balance of timing and skills to get great people on board just when you need them. Hire too early and your wages bill could damage your growth but hire too late and you could struggle to cope with a rapidly growing customer base. It's essential to have the right skills within your team to enable smooth scaling and avoid knee jerk decisions.

Product/Service  
Is the actual product or service you are going to scale ready for the potential customers? All obvious bugs should have been ironed out through constant testing and iterations to get to a point where the offering is robust enough for a wider market. Any weaknesses will rapidly be exposed with increased volumes and it will be a much bigger task to fix them.