Creating a successful business startup is one of the most demanding tasks. A business startup is more than designing, producing and launching a product into a market. The process of creating a successful startup entails generation and development of an idea, coming up with the right startup team, looking for funding, finding product-market-fit and lastly coming up with an appropriate business model. This paper discusses essential consideration evaluating of turning Chris interest in networking into a business opportunity for a startup. The article starts with a description of an entrepreneurial mindset and how it is indispensable in the generation and development of a business idea. Other than this, other considerations that will be discussed in this paper include startup teams; idea generation and development; creativity, empathy and design thinking; testing and experimenting; finding product-market fit; and business model.
An entrepreneurial mindset refers to a specific state of the mind which orients human conduct towards entrepreneurial activities and outcomes. Some of the issues that come into play when considering whether an individual has an entrepreneurial mindset include the ability to discern an opportunity or a gap in the market and coming up with an idea or solution for the problem in an innovative and valuable manner. In other words, an entrepreneurial mindset deals with specific personal characteristics needed in turning an idea into a great business opportunity. Some of the typical entrepreneurial mindset include tenacity, competitiveness, passion, discipline and strong belief on their capability to turn an idea into a business opportunity or figure out a problem and design a solution for the same in the most innovative way. The fact that Chris has keen interest in networking and is interested in coming up with a product that will enable students studying the U.S. coming from similar places interact with one another with the objective of creating strong relations speaks a lot whether the idea will become a great business opportunity.
Idea Generation & Development
Business opportunity recognition and development is the cornerstone of the entrepreneurial process. All great and successful businesses that we see around today, all started as ideas that arose either due to the existence of an opportunity in the market or as a problem that required a solution. Google, Facebook, Amazon, Alibaba, Apple among many other multinational corporations operating across the globe all started as ideas developed with the intent to achieve a particular mission. Google, for instance, began as an idea on how the world information could be organized and made accessible to every individual across the world in the cheapest way possible. Two decades later, Larry Page’s simple idea on how to organize the world information has turned out to be one of the most life-changing business in the world today. Concerning this, it is great that Chris and Pat have embarked on a mission how they can use the idea of making it easier for students studying in the United States and coming from similar places across the globe could meet, network and perhaps develop working relationships into a business idea.
As stated in the course materials, one does not necessarily need a brilliant idea to start a startup. When developing a startup, the most important thing is how a simple idea can be packaged, designed and developed to accomplish a particular mission. Back to Google, the most innovative information technology company in the world today, the idea was to create a search engine where people could search for information period. The mainfounders was to make the site useful and straightforward to use. Everything thing Larry and Brin with their team of engineers did later was about refining the search engine to meet the needs of the people it was serving. Just like the story of Google, Chris and Pat idea to come up with a networking tool that will enable students across the U.S. and the world at large to a network is the most crucial step in their entrepreneurial journey.
While a significant number social networking sites have been developed since the beginning of the 21st Century, directly taking advantage of increased internet access across the world, none of the existing companies running these sites has developed a product that entirely helps students network. For this reason, Chris and Pat’s decision to provide a platform where students can network with one another represents a more significant business opportunity. But for the idea to be developed into a great startup, it should be designed and refined in a manner that it directly meets the needs of students, especially international students who would like an opportunity to interact with other students from there place of origin. Also, the idea can be packaged to include an opportunity for students to communicate and work with one another in doing research and sharing of knowledge.
In designing an idea into a startup, Graham (2005) cautions that this is not the end of things. Instead, it represents the beginning of the most challenging journey. Apart from having a concrete plan on idea execution, there is a need to demonstrate how the idea will solve societal problems. The focus main focus should be on the value the idea is likely to bring. Besides connecting students, the critical question that Chris and Pat will need to answer is how the product they are going to develop going to be valuable to users and other individuals who might not be direct beneficiaries.
According to Graham (2005), what matters when it comes to startups, it is not the ideas but rather the people that have these ideas. In other words, a startup team which is usually made up of the founders, board of advisers and sponsors as well as the first employees to be hired that matter a lot. A great team can fix bad ideas, but great ideas cannot be saved by an incompetent group (Graham, 2005). Therefore, the main concern for Chris and Pat is whether they can assemble the most competent team to develop the idea into a successful startup. Precisely, it is critical to ensure that the people to be hired have an entrepreneurial mindset. These guys should be ready to work extra more for little pay, devote more of their time than needed and always be willing to go an extra mile.
Qualifications and experience play a lot when it comes to hiring and assembling of a startup team. The focus should not merely be on qualification but expertise as well. Another consideration is whether the team assembled can get things done. In case of challenges, what possible solutions can these individuals to deal with the problems? Lastly, it is essential to get a team that is highly dedicated and willing to go the extra mile to make sure that an idea turns out into a successful business.
The behavior and attitude of team members is an important consideration that Chris and Pat will have to consider. In most of the cases, great ideas fail due to poor attitude and behavior among team members. While it is one thing to have the smartest person in a team, it is another thing to get results if this intelligent individual, and perhaps leading the team does not have respect or value other team members. In these instances, a startup team is likely to disintegrate if appropriate action is not taken to deal with the issue in the early stages. Since it is costly for startups to hire highly talented and experienced individuals, it is essential to get it right from the word go.
Starting with a group of friends, people with common interests and social-cultural background may be necessary especially at the early stages of a startup. While brilliance plays an integral part in getting things done, discipline among team members is perhaps the most crucial ingredient of success. For this reason, it is essential to hire people who share common beliefs and aspirations in life or people who are resulted oriented and are willing to work with a diverse team. Perhaps, this explains why most startups are around universities. Facebook and Google are two examples of great companies started by a group of friends. One of the main explanations for this is the ability to get people who share common interests and are willing to pursue an idea to its maturity despite the price they will have to pay.
In terms of the number of founders, the ideal figure is two to four members. According to Graham (2005), it will be difficult to start a startup with one founder. A single individual might find the moral weight of incubating a company too high to shoulder. Bill Gates, the founder of Microsoft who is famous for having a good deal of moral influence, also had a co-founder. Concerning this, Chris and Pat are likely to complement and give one another moral support along the way. While Chris is good at networking with several friends across the U.S. and outside the country, Pat is exceptional turning an idea into a business opportunity. While the two may be at liberty to introduce another founder, limiting the number to the two of them is highly advisable. If decisions makers are many, it becomes tough to arrive at a decision when
When coming up with a startup team, it is essential to ensure that there is diversity. Considering people with diverse technical skills and backgrounds is extremely important as most of the times, many aspects of developing products require specialized skills. Social networking sites are technology-based businesses, and therefore, it will be necessary for startup team be incorporated by Chris and Pat be made up of people from diverse fields. For instance, there should be a software engineer, programmers, designers, as well as business people.
Creativity, Empathy and Design Thinking
Creativity and innovation go hand in hand when it comes to success in business. While creativity deals with the ability to come up with new ideas to discover new ways of doing things and solving problems, innovation encompasses the ability to execute new ideas and solutions. Together with empathy and design thinking, the three issues play an essential role in the success of startups. While a startup may have a great idea, it is the creativity within the company ranks that will get things done. According to research, lack of creativity is one of the most significant obstacles to success in a majority of companies. Even for highly successful companies, it is vital that they continuously continue to innovate and come up with solutions that uniquely solve customers’ problems. For this reason, it will be crucial to evaluate the startup on the extent of its creativity and innovativeness.
Some of the typical clues used to asses a lack of creativity and space for innovation is looking at whether employees are required to follow specific rules. Blind following or regulations, it one of the most significant impediments to creativity. Therefore, it is essential that a startup not be based on stringent rules that limit the space of workers to express themselves. There is no right answer when it comes to creativity. For startups, it is vital that team members be encouraged to come up with ideas on how to solve problems a company is seeking to answer. For this to happen, however, it is essential that adequate resources be set aside for the creation of innovative solutions. But, this should be done with caution as startups are usually limited in terms amount of capital available to fund projects.
Expecting creativity from the workforce without necessarily requiring additional resources is one of the ways to enhance creativity a startup. Equally, creativity may be fostered in a team by giving room for failure when addressing problems is a challenging task. For this reason, providing support, training and acknowledging creativity is essential. Room for creativity is likely to get everyone motivated to come up with solutions to problems.
Testing and Experimenting
While everyone can come up with an idea, and turn it to a business opportunity; success can be guaranteed if only one can come up with a great product to serve the gap in the market identified. As evidenced from Chris and Pat experience, it is clear that there is no product at the moment that helps students in the United States and across the globe and interact with one another specifically for academic reasons. Most of the existing social networking sites including Facebook is designed to meet social interactions needs. In this regard, Pat was right for suggesting that they could turn Chris idea of creating a networking site for students into a business idea. The mere fact that the two have a plan and have identified a business opportunity does not imply that their business startup will succeed.
Facebook is a successful social networking site because it has great products that serve its customers. The reason why Amazon is giving discount retailers a run for their money it’s because it came up with a great product to serve its target customers. All successful companies are famous and successful because they all have great products. For this reason, it is crucial that when evaluating whether the startup Chris and Pat are planning to set up, one needs to look at the product the company is going to design. Great products are easily distinguishable from mediocre products are the former offer great solutions while the latter only come up with reasons why they are not accomplishing what they ought to.
The process of developing a great product starts with a clear understanding of the problem that needs to be solved. There is no shortcut. The second stage entails coming up with several porotypes, evaluating each based on costs, features, and potential profits. Teams working on different prototypes should be given adequate time, resources, and technical advice through the product development process. Upon completion, comparisons and suggestions are proposed on how to improve the prototypes. The final product chosen by a team should be one that meets all the necessary requires. After that, the product is placed under scrutiny, tested and modifications conducted to ensure that the product meets customer requirements. For a social networking site, the most crucial aspect of the product that will have to receive considerable attention is user-friendliness. For this reason, the design of the actual platform should be appealing to the eyes, and be easy to use.
Finding Product-Market Fit
It’s not just startups that should be worried about finding a perfect product market fix. Most businesses fail because they do not offer customers what they want. Today customers are more empowered than ever before. As such, failure to satisfy customer expectations is likely to alienate customers to competitors with a better product-market fit. Research shows that most startups fail because customers do not want a product offered to them. For this reason, it will be essential to test whether indeed university students require a social network site that is uniquely designed to help students network with one another. While the students that will sign up with the social networking site are going to play a vital role in the company’s business model, it is essential to ensure that adverts from customers compliment efforts to grow traffic on the site.
As a social networking company, the company will be faced with two crucial issues. First, it will have to find ways it can attract users to its platform. Secondly, the company will have to come with aggressive ways that it can attract companies to buy advertising space. In doing so, however, the company must make sure that ads do not create a negative perception among targeted users. If a clash between the two occurs, the company is likely to find it increasingly difficult to make revenues and at the same time serve its viewers. One of the ways the company can use to avoid a clash between the two is by requiring companies advertising with the platform come with competition based adverts where users will be required to compete to win rewards. However, the focus of the competition should be academic and inform of scientific research as per the goals and mission of the company.
Building Business Models
A business model refers to an outline of how a company is going to deliver a product to a customer and make revenues from the good or service. A good business model is made up of four key components; core strategy, strategic resources, partnership network, and customer interface. The problem that many startups make when designing a business model is focusing on customer interface only while entirely giving no attention to the other three remaining parts.
The core strategy is the first component of a business model. This core strategy is concerned with the mission and vision of a business, product and market scope and the basis of launching a product in a particular market segment. The critical question that is answered by the core strategy is how a business competes with others. Since Chris and Pat desire to enter into the information technology industry, they are going to compete directly with the leading social networking companies in the industry that include Facebook, Twitter, Snapchat, Instagram as well as WhatsApp. For this, it is essential for the founders to clear how the company is going to compete in this highly competitive industry. Concerning this, the most potent strategy the company can use to get a foothold in the market is through a differentiation strategy. Besides social networking, the company could, for instance, decide to come up with avenues that support corporation among students. The emphasis should be to make learning more fun, and resourceful. It also involves developing a key objective and mission that the company seeks to achieve. Here, for example, the company may decide to focus on increasing social networking among students for academic and professional resources. Key product deliverables may include inter-institution scientific research competitions, online networking events, among others. However, this should be delivered uniquely so as not to miss on social networking experience.
The second part of a business model focuses on strategic resources. As a startup, social networking site resources will be limited. For this reason, it is essential to design the support in a unique that serves the market. The focus for the company will be facilitating interaction of students in U.S. universities who might be from the same place but not known to one another. For a start, the company can help organize events to get students interested in the company products. Sporting events as a way of promotion, organizing conferences on the importance of networking, for instance, may go a long way in uniquely utilizing the few resources.
A partnership plays an essential role in the creation of value. As a social networking company focusing on interactions between students, the company will have to work closely with many institutions. For instance, the company will have to find a way to work with higher educational institutions in the United States. Partnerships with other companies will directly help them reach out to students who are the target audience. The company will also have to work with the department of education as some of the activities like conferences will have to be approved by schools, and by state and federal education officials. Apart from this, working with companies such as Microsoft, Dell and Apple may be necessary for the development of apps to support the company business model.
The last component of the business model, customer interface is perhaps the most important as it tells how exactly a company is going to reach out to the target customer. Great product should be able to fulfil customer needs uniquely and affordable. The main product that the startup will have to pitch to the target customers is advertising space in its platform. For the company to survive, grow and develop it will have to compete aggressively with the technology giants such as Facebook, Google, Twitter, Instagram and Snapchat for advertising revenues. One of the ways the company can compete for the advertising revenues is by aggressively projecting itself as the best social networking site company such as book publishers, computing companies and food and beverage companies can reach out to college students.
Some of the essential features that the company can include to attract clients are by using pragmatic programming that allows the advertisers to target a specific segment of the market. Self-programmed adverts are likely to appeal to companies seeking to advertise with the company than one controlled by the company. The company can also come up with the analytics that will enable it to monitor traffic at its platform, and the extent of users view adverts advertised on its platform. However, it will be essential to ensure that the ads are designed in a creative, engaging way not to create a negative perception among likely users.
Success for business startups is not always guaranteed. In fact, the majority of startups die before even they celebrate their second or third anniversaries. For this reason, when deciding to launch a startup, it is essential to ensure that an idea being developed into a business opportunity is fully developed. Doing adequate research about the problem and how it can uniquely be solved before deciding on product features is extremely important. A business startup is more than designing and launching a product into a market. Instead, it encompasses many processes that include recruitment of startup team, product-market testing, coming up with a business model and way to find funding capital. As discussed in the previous sections, there are many issues that Chris and Pat will have to focus on in assessing the viability of its business opportunity the two want to turn into a startup. One of the key issues the two will have to determine is whether they have the appropriate entrepreneurial mindset. It is imperative that the two evaluate the capacity to deal with the upheavals that are associated with startups. Apart from merely seeing a great business opportunity, the two need to gauge whether they have energy, tenacity and resilience required to overcome the various challenges associated with entrepreneurship. Besides this, Chris and Pat need to evaluate whether indeed the idea can be developed into a viable business idea or the venture will fail due to lack of viability. Other issues that the two will have to consider is startup teams and how they the various members to be recruited will help them realise their dream of a social networking startup.
Last but not least, the two will have to assess the business startup in terms of business model. The focus is on how the company is going to generate revenues. As part of the revenue model, it is essential to identify strategic resources, partners, competitors and customers.
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