Rites Of Passage For A Startup Key questions that founders must ask themselves to embark on a successful startup journey.
By Ajay Batra
Opinions expressed by Entrepreneur contributors are their own.
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The journey from a brilliant idea to a building successful enterprise is non-linear and non-deterministic. It consists of a series of decisions, actions, learnings and pivots. While the specific steps vary from one startup context to another, there are five critical milestones that each startup must cross. Each of these is termed as a "fit" that the startup seeks between the external reality and its internal preparedness.
To determine a good fit, the founding team needs to ask themselves some tough questions and deal with some honest answers. The five fitments and their corresponding questions are:
Customer-Idea Fit (Focus: Customer-centric ideation)
- What is the business idea?
- What product or services will be launched?
- Who are the potential customers of the products or services?
- How much do the founders know about the life-in-the-day of potential customers?
- How do potential customers prefer to be reached?
Opportunity-Founder Fit (Focus: Getting the team ready)
- How large is the target market that can be captured?
- How does the macro economic context impact the venture?
- How will the venture be different from competition?
- Do the founders have adequate technical capabilities?
- Do the founders have adequate management capabilities?
- Do the founders have adequate funds?
- Are the founders' roles and responsibilities clear?
- Are the founders aligned on their ownership rights?
- Do the founders have a shared vision of the opportunity?
Problem-Solution Fit(Focus: Developing what the customer wants)
- Which customer problems is the product or service trying to solve?
- How important is it for the customers to seek solutions to these problems?
- What benefits will the product or service provide to the customers?
- How important is it for the customers to have these benefits?
- Is there a prototype of the proposed product / service that can be shared with the customers?
- Has the prototype been shared with adequate number of customers?
- Have the key functionality and features of the product or service been determined?
- Based on customer engagements, has a viable price range been discovered?
Revenue-Organization Fit(Focus: Successful venture launch)
- Has a pricing strategy been developed?
- Have the channels to acquire customers been identified?
- Have the means to service customers been defined?
- Does the organization have adequate funds to support the launch?
- Is there a dashboard to monitor and track funds and cash-flow?
- Have required people been recruited and on-boarded?
- Is a marketing strategy in place?
- Has the product or service with relevant functionality been developed and tested?
- Does the organization have relevant partnerships in place to support the launch?
- Has the venture started generating revenues?
Growth-Profitability Fit(Focus: Profitable and sustainable growth)
- Is the organization aware of the costs of customer acquisition?
- Is the organization monitoring its margins?
- Is the organization tracking its funds usage?
- How is the organization engaging with existing customers?
- Does the organization have well-defined goals for revenues and profits?
- Is the organization tracking its progress towards these goals?
- Are product or service development milestones in place?
- Is there a suitable organization structure in place?
- Have roles and responsibilities been defined organization-wide?
- Are there standard approaches for hiring and training new people?
(Observations, views and recommendations shared above are personal.)
