Define Your Startup’s Minimum Viable Product (MVP)

You’ll only be able to generate good traction when all the three elements of your idea are properly defined—the problem, the solution and the business model.

Which means your assumptions about each one of these elements have to be true.

And to know which of your current assumptions work and those that should be replaced by better assumptions, there is just one way, my friend: to validate them in the market—with real people.

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Think Exponentially When Building Your Startup

With the first version of your business model canvas, you are ready to check if your assumptions will succeed or fail.

However, I ask you to think BIG.

Salim Ismail, Michael Malone and Yuri Geest identified 10 attributes of what they call the Exponential Organizations (check their book here):

An Exponential Organization is one whose impact (or output) is disproportionally large—at least 10x larger—compared to its peers because of the use of new organizational techniques that leverage accelerating technologies.

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Designing Your Hypothesis Through The Business Model Canvas

After assessing your startup idea, it’s time to translate it into a business model hypothesis, which will help you on better:

  1. Visualizing the idea: the business model hypothesis will consolidate the problem and the solution in the business model component called “value proposition” which—with other 8 components—will bring you a clearer picture of what you’re aiming to build.
  2. Communicating the idea: once it is easier to visualize it, it will be easier to communicate your idea to other stakeholders as: employees, co-founders and investors.
  3. Iterating the idea: With a structured framework, it will also be easier to analyze and define which assumptions should be tested first and how could you iterate your business model hypothesis in order to achieve success.

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Assessing Your Startup Idea: The Problem, The Solution And The Business Model

Once you are completely sure about founding a startup (and not a small company) it’s time to assess the current strength of your startup idea.

Of course, this very first assessment is not a prediction of your startup success. Instead, the intention is to help you on thinking about the components of a great startup idea and which of these components you still need to further investigate and validate in your own idea.

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A Startup Or A Small Company? That Is The Question…

Your first step in building a successful startup is… to be sure you should really found a startup (instead of a small company). Seriously, think about that.

In the last years, the word “startup” became so popular that it’s commonly used as a synonym for ‘a small company’ or ‘a company recently founded’.

And, believe me, the difference is huge.

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Startup Team: Recruiting, Evaluating and Convincing People to Jump On Board

And here we go to one of the most crucial things to be defined at the beginning of your startup: THE INITIAL TEAM.

As Alexander Varvarenko, founder of ShipNext, told me once:

…we spent one and a half years building a team. That team was tested on different other projects.

You must consider investing a significant amount of your time in the task of recruiting people. These people may be: co-founders, employees or outsources.

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Is Your Market Big Enough? 3 Steps to Assess Your Startup’s Market Size

Even with a great idea you won’t go too far if there isn’t a big enough market that allows your startup to grow significantly. That’s why you should assess the size of the opportunity you’re working on, since the very beginning.

MARKET SIZE IN 3 STEPS

Certainly, there are several ways to estimate your startup’s market size and you should look for the most reasonable methodology in your case. The most important is to work on some kind of logic. Here, we’ll base our logic on 3 well-known market concepts: Total Addressable Market (TAM), Served Available Market (SAM) and Target Market.*

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3 Key Financial Indicators That May Save Your Startup’s Life

Crijn Bouman, founder of Epyon Power, told me once:

We found out that the cash was running out too fast and as a typical technology startup, it takes a little longer to develop the product than anticipated, it takes a little bit more money than anticipated, the market is a little later.

Certainly, this is a very common situation, when you’re attempting to develop innovative products and services.

As a founder, you must pay special attention to the cash your startup has available now and in the near future. Once it’s a limited resource, it will be consumed while you are not able to generate enough revenue to offset the overall costs. And without money, your startup is over.

So, to be prepared for such challenge, I strongly recommend you to understand and keep in mind these 3 financial indicators: Cash Available, Cash Burn Rate and Cash Runway.

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