Investors want traction and a validated product-market fit. And if you don’t have enough personal … [+]
With the constant coverage in the news of startups getting tens of millions of dollars in funding rounds, early-stage startup founders might get the wrong impression about how to make their startup idea a reality. Focusing all of your efforts on fundraising while you’re in the ideation phase of your startup is a big mistake, especially if you don’t have at least one successful exit behind you. Start-up investors are usually prepared to put their capital on the line only when they see real traction.
Consequently, you would in reality have to go through the ideation and validation stages without any external investment. And if you don’t have enough personal savings, it means that you need to manage somehow without spending money.
Your first order of business is to start building your minimum viable product to test and validate your idea. While this can be expensive, in most cases it can be done for just a subscription to a few services.
Contents
1. Validate your idea without building anything
Build a landing page that describes your offerings and run (limited) presales.
Selling something without having anything to sell is a very uncomfortable thought, but it is becoming an industry standard and is one of the safest ways to test whether your idea has potential or not.
Building a landing page certainly doesn’t require any technical knowledge these days. There are plenty of cheap no-code page builders out there, and getting basic design resources is pretty cheap too.
This way you can test your offering with your target market and see if you can capture attention and most importantly – revenue. If not, you can use the same tools to cheaply and quickly replicate your offer and repeat the test to see if it improves your results.
2. Use No-Code-Tools to build your MVP
In 2023, tools without code will become increasingly sophisticated. This is a trend that will grow exponentially, especially with the introduction of AI that can code.
This means that you can build much more than a simple landing page with very little technical knowledge. There are plenty of no-code services you can mix and match to put together the alpha version of your product.
If you manage to gain traction then you can reinvest your profits to hire a tech person or you can use your traction to raise money from a seed investor which becomes much more likely if the traction you indicates that you have found a product – market suitable.
3. Have a founding team with all the necessary skills to build and sell your MVP
If it is not possible to build your idea exclusively with no-code tools and you need more complicated custom technical solutions, you should involve a technical co-founder in the team.
This also applies to other skills. While two or three co-founders are ideal, there is no limit to the number of people you can include in your founding team.
If these people believe in the idea and are well motivated by a stake in the project, you can gain a lot of skills, experience and manpower without having to invest money in salaries. A competent founding team can easily produce and sell a high quality minimum viable product while spending next to no money.
4. Use Pay-Per-Conversion Marketing
Finally, marketing is one of the biggest wastes of money in the early start-up phase. You can easily burn a lot of money promoting your MVP and get very low bang for your buck – especially if you haven’t found a good product-market fit yet.
That’s why you should limit yourself in the beginning marketing strategies for startups to those who do not require investment.
In other words, you should focus on marketing activities that you can do yourself for free (eg content marketing), or you need to find partners willing to sell your product on a pay-per-conversion basis. Of course, this is much harder than paying people to advertise you, but it may be your only option.
Moreover, since your main goal is to test your idea and get a first push, even small-scale partners can do a great job of getting your offering to potential customers.
Janice has been with businesskinda for 5 years, writing copy for client websites, blog posts, EDMs and other mediums to engage readers and encourage action. By collaborating with clients, our SEO manager and the wider businesskinda team, Janice seeks to understand an audience before creating memorable, persuasive copy.