Today, you’ll see a step-by-step guide to launching a startup from a software delivery company that has been helping entrepreneurs implement their ideas for almost a decade. Spoiler: it’s not really hard to build a startup. The hardest part is to make it last and bring profit through the years.
So, that will be our focus. This guide will provide a detailed answer on how to build a startup and get into the 10% of businesses that remain afloat.
The path to making a startup generally looks like this:
Voila! You are a businessperson.
Now let’s get to the details.
Not everyone who wants to know how to build a startup ends up running one. Despite being romanticized, this is a challenging task that brings many happy moments but also intensely demanding. And it often fails. So, is there a surefire way to establish a successful startup?
The major advice we’ve learned from working with startup founders is to find a mission that will drive you regardless of profitability. Of course, profit and growth are the core of sustainability, but understanding the societal impact your business is making is what will guide you through the good and bad times.
Look at the mission statements of the successful startup companies that grew into large businesses:
To check if you have found the problem, solving which can become your startup’s mission, ask yourself:
After “How to create a startup?” the next big question is, “Will people want to buy my idea?” Market research will help determine how potential customers will receive your product or service, their preferred features, and the pricing strategy.
It is also the first means of proof that your product or service fulfills the market need and is worth investing in. Read on to learn how to conduct market research.
The lack of market need is the second top reason why startups fail. But how can a startup locate its target audience when it hasn’t yet begun selling? Start by testing assumptions and slowly narrow down your focus.
For example, let’s assume you’re interested in how to build a startup to sell beard oil. Apparently, your primary target market is men. Next, it’s safe to assume that teenagers and seniors will not buy this product regularly, so you can eliminate these groups.
Then again, you can take that your customers either have a beard or want to grow it, further narrowing down the target audience. You can continue this process until you’re ready to create an Ideal Customer Profile (ICP).
Making predictions and testing them is a fast way to determine the direction you should follow in your research. Moreover, data will help you remain objective while you try to figure out how to create a startup and keep you receptive to opportunities.
For example, you may wonder how much your potential customer will be willing to pay for your offer. Your hypothesis could be: “$1,000 for a product containing these features.”
Next, determine what research type will provide you with the most data for your startup process.
Once you’ve finished the research, organize and analyze data to identify patterns and trends. Then, outline action items. For instance, if most users reported feeling overwhelmed when using a similar product, your action items might include researching best practices and creating and testing different product versions.
Competitor research will reveal opportunities and risks. There are several competition types that startups face — direct, indirect, potential, future, and replacement competition.
Answer The Public is a free tool that shows what people search online on your topic;
Think With Google is a free library of marketing-related facts and figures;
BuzzSumo shows the high-performing content by a given keyword;
Statista gives statistics and forecasts in most industries;
Spyfu is a search engine analytics platform that can show how your competitors attract traffic;
Typeform is a platform for making surveys and interactive forms for conducting primary research;
Dimensions is a search engine for academic publications.
A unique Value Proposition (UVP) is what determines the goal of creating a startup and differentiates it from the competition. It should elaborate on your mission and clearly outline what value customers will get by purchasing your products or services.
To start writing a UVP:
Don’t forget about your competitor’s research results and try to mitigate all the negatives they might have in your offer. Further, think about your target customer’s pain points and expectations and address those, too.
Finally, go through your list and highlight everything different from your competitors, e.g., what makes your startup unique. Then go through your customers’ pains and gains and rank them in order of relevance to your idea. Choose the top three to keep in your UVP.
Outline your vision, and we will return to you with ideas and cost estimates.
Contact usYour startup should comply with legal requirements to function safely. We recommend consulting with local authorities to learn how to build a startup properly. However, there are some universal aspects:
You should also choose the name for your business and ensure no other business uses the trademark you’d like to use.
Your business’s legal structure will determine your taxes, liabilities, and registration and can impact fundraising. To pick the proper structure, consider the scope of your business and the number of partners. You’ll also want to check on compliance and taxes to know how to build a startup with the most beneficial structure.
The amount of business taxes is determined by the government of the country you register your business and your business legal structure. Thus, in the USA, you will pay either of the three tax types as a startup:
Additionally, any US business needs an Employer Identification Number (EIN).
As a business owner in the EU, you’ll have to pay:
There might be additional taxes depending on the country.
To build a startup in the UK, you’ll need to:
A formalized business plan outlines your ideas and strategies regarding how to build a startup, manage it, and also exit. Additionally, it determines your target customers and how to reach them through marketing. A good business plan explains:
While you don’t have to follow an exact structure, ensure that your business plan includes the sections below.
It is a brief positive synopsis of your business that lets the reader quickly grasp the key elements and entices them to take an interest in your idea.
Here’s what to include:
Also, spell out exactly how your company’s ownership is divided.
A product description describes all the products and services you offer. It should also highlight their benefits and how you plan to create a startup that’s better than what’s already on the market. Make sure to include the following:
Tell how you plan to build a startup, structure and run it, and explain roles and responsibilities. It would help if you also outlined what makes every person suitable for their position. This section is vital if you have a partnership or an LLC. Include the following:
This section aims to convince the reader that you know how to create a startup that’s viable and will bring profits. It comprises four financial statements: the expenses statement, the income statement, the cash flow projection, and the balance sheet.
For the expenses statement, sum up the cost of starting and operating your business. A rule of thumb is calculating a six-month operating cost for a ballpark estimate of total startup costs.
The income statement should show your forecast revenues, expenses, and profits. Explain your projections and match them to your funding figures.
A cash flow projection predicts how much money you will have in the bank over a given period. For a realistic forecast, analyze potential issues that can impact your runway.
A balance sheet shows what your business owns, owes, and the value of the owner’s investment. To create it, sum up the value of all assets in the company, then calculate the total liabilities and compare the two numbers.
Once you’ve determined how to build a startup, hire a software development team to turn your idea into a working product and make it available to the end user. Its composition depends on the complexity of your project, your knowledge and involvement, and available resources.
Most often, startups hire the following specialists:
Next, you should decide whether to build an in-house team or outsource the startup development to remote specialists. Both variants have their pros and cons, which we’ll consider later.
Finally, you should know where to look. Popular hiring sources include
It gives you complete control over the hiring and training process, simplifies communication as you have direct access to all your team members, and ensures the cultural fit.
On the other hand, it takes time to find potential candidates, interview them, and make an informed decision. You also have to ensure that your in-house employees know how to build a startup, have the necessary equipment, and have their skills updated with the changing company’s needs. Moreover, you’re limited to people who live in your area or are willing to relocate.
The most significant advantage of working with an outsourcing partner is the easy scaling of your team. You can change the number of employees working on your project anytime you need it without losing time or damaging your reputation as an employer. You also don’t have to worry about equipment and workspace and are not responsible for training.
Outsourcing also gives you access to a worldwide talent pool. Another benefit of hiring someone from another time zone is that it might be up to three times less expensive than recruiting locally.
However, you must ensure that your vendor has an effective communication process established so there is little chance of misunderstanding. Also, you share sensitive information risking your security which can be mitigated by signing an NDA agreement.
| In-house team | Outsourced team | |
|---|---|---|
| Pros | Full control Direct communication Hand-picked employees | Easy scaling Pay-per-use Easy to switch Global talent pool |
| Cons | Long-term recurring expenses Time-consuming Requires HR skills Limited talent pool | Risk of communication issues Security risks Less control over development |
A minimum viable product (MVP) is a product version that only contains core features to attract users and encourage them to provide feedback. It is a proven way to ensure the product has a market without spending much time and money. Sometimes MVP development may even be cheaper than conducting in-depth research.
But don’t think of an MVP as an unfinished product; it’s a core part of a fully functional app. Hence, the steps for a startup MVP creation are the same as in the traditional web development process:
The tech stack you choose for an MVP will affect its architecture and design. That’s why you should have a long-term strategy determining how to build a startup to ensure that the selected tech stack won’t hinder your product’s scalability and performance.
Of course, you can use a different tech stack for your product than the one used for the MVP. However, it may entail searching for and hiring new specialists and more research and prototyping.
An MVP should impress early adopters, so its features must clearly demonstrate the unique benefits of your product. At the same time, these should be the core features, and they must not take long to develop or be costly.
Here’s how to create a startup MVP:
For example, let’s see how to build a startup MVP for a tourist app. Its ultimate goal is to book a hotel. The user’s actions can involve typing in the destination, reviewing a list of hotels, picking a hotel, submitting user details, making payments, rating the hotel, etc. Now, you should prioritize these features by their significance.
For instance, the opportunity to pick a hotel is more critical for completing a user’s goal than rating, so it goes higher on the list. Further, hotel recognition by photo might not be an essential feature, but it makes you unique, so it also goes on the top features.
Here are examples of companies that knew how to build a startup and succeed. They also started as MVPs:
But how can you tell if an MVP is flourishing and you can move on to developing a complete product? Look for these indicators:
Contact us with your requirements, and we will get back to you with options.
Contact usHow to build a startup without taking a bank loan? There are several ways to fund a startup, including borrowing from friends and family. But today, we’ll focus on the most popular ones: bootstrapping and fundraising.
Bootstrapping is financing your startup from your own pocket. You can use your savings, keep your daily job, and invest your salary to grow a business. This practice allows you to stay in control of your business and avoid paying interest on loans. You also don’t have to meet the investors’ needs and are free to experiment and innovate.
On the other hand, fundraising involves getting capital from a third party. This way, you get financial freedom to attract top talent and fast-start your business. Moreover, investors can add value to your startup by sharing valuable expertise.
To determine which method is right for you, ask yourself these questions:
| Pros | Cons | |
|---|---|---|
| Bootstrapping | Complete control You choose priorities Huge creativity driver | Financial risks Slow growth No returns for a while |
| Fundraising | Rapid growth Added expertise Quick scaling More credibility | Rigid timelines Investors’ conditions Reputational risks |
What can marketing do before a product is ready to go into the market? Capture leads, keep them warm, build an online following, form distribution partnerships, open access to events, and test communications on different levels.
Like in startup development, the key to successful marketing lies in planning. Ensure your marketing plan includes:
Below are some ideas on how to create a startup promotion strategy.
Sending emails can attract customers to your startup for little to no cost. It can also help raise engagement, obtain valuable feedback, and drive sales. However, to reap the benefits of this method, you must collect your prospects’ emails first.
If you have a website or a landing page, consider placing a newsletter signup form on it. Of course, that would mean you’d additionally produce content for newsletters. Alternatively, you can ask for emails directly in exchange for something valuable, like a discount.
Newsletters, blogs, podcasts, and videos are powerful strategies to generate exposure for your startup. With content, you can position yourself as an expert source of information in your niche and attract organic traffic.
The trick is to publish content that your audience is interested in. It also requires SEO knowledge to rank high in search engines so your audience can find it.
Your business’s presence on social media will help it look approachable and spread awareness among your target audience. Yet, to make it happen, you should invest in relevant, engaging content and advertising and always be ready to answer comments and messages.
You can get targeted traffic to your startup’s website with paid search. If your keyword choice is correct, you’ll reach the audience that needs your product or service and actively searches for it. It is also cost-effective, as you only pay for clicks.
On the other hand, you’ll still have to put effort into converting leads into paying customers. Also, the risk of choosing keywords that are too broad and thus failing the campaign is high.
There are no two identical businesses; hence you will likely encounter unique challenges on your way. However, we’ve collected the top issues most startup founders face and provided ideas on how to create a startup strategy to avoid them altogether.
The lack of market need buries 42% of new businesses. The primary reason for this is poor market research, which leads to misunderstanding of the real market needs. As a result, entrepreneurs build products no one cares about.
But how to create a startup that will get a market share? Unfortunately, finding the right solution may still be hard after establishing the market need. That’s why idea validation is a must-do for startups that want to save money and time. You may start with pre-sales and proceed to MVP development after gaining some traction. Otherwise, iterate and get market feedback until you get a satisfactory result.
Not getting enough customers is often tied to ineffective marketing. Indeed, it’s easy to run out of road chasing trends and spend lots of money without yielding the desired results.
To avoid it, create a marketing plan and learn how to build a startup using low-cost marketing methods and tactics. Next, determine which metrics will provide the most precise picture of your business’s current position regarding your goals.
Sometimes the revenue grows exponentially but so do expenses leaving the profit margin stale. It often happens when a business owner rushes the startup building process and doesn’t plan properly. Another reason is the lack of funding to invest in technology or highly experienced management.
Both can be avoided by taking a steady approach to market research and idea validation. Also, growing a business and fundraising simultaneously is a real challenge. So, you should secure funding before starting the startup development process.
Failing to deliver a new feature or introduce a new approach by the deadline is a widespread issue even in established businesses. Ensure you include changes and emergencies in your delivery plan and assign deadlines to every task.
Also, remember that the team is your greatest asset, so take your time to find the right hires. You can also get IT consulting services from an experienced software development company to fill knowledge gaps quickly.
Outline your current situation and get a call from a seasoned IT expert with suggestions for improvement.
Contact usEvery type of business has its own financing needs. It’s also worth remembering that you should not just think about how to create a startup company but also how to run and grow it. Each task comes with its own expenses, which we’ll outline below.
First, the costs you’ll incur before you even start a business include:
Costs of running a startup:
Add up all those costs, and you’ll have the total cost of creating a startup company and running it for one month.
We are a digital transformation and consulting partner who knows how to build a startup from scratch and enter the market with the right solution at the right time.
Among our latest startup projects is SwiftComply, a B2B city services platform that helps restaurants automate their compliance processes across Ireland and the USA. Since we started working, the company has launched several new services and managed to expand up to 450 cities.
Next is HarvestInn, an MVP of a booking platform for campervan travelers in Australia that we made from scratch. The Syndicode team has researched the client’s idea, helped to shape a concept, created a design, and planned the development of a first-mover solution. The platform had over 60 verified hosts offering services one month after launch.
Our other project, Fuzu, gained around 70,000 users the first year after we finished working on it. This job search marketplace collected $6,7M in total funding and kept expanding the range of its services.
Hopefully, this entrepreneur startup guide gave you some ideas on how to build a startup that will live. In short, the key to starting and maintaining a startup business is the proper knowledge. Namely, you should know what you want to achieve, where you currently are, and what you should do to reach your goal.
The primary condition for success is to offer a solution to a common problem that is critical enough for people to pay for. However, many ignore the second part of the previous statement, rushing into implementing their solution and missing proper market research.
However, even after proving the viability of your startup’s idea, you should plan for market changes. Adopt a strategy that would allow you to make changes while using minimum resources and surround yourself with knowledgeable people.
As an IT consulting and full-cycle delivery company, Syndicode knows how to create a tech startup. We will provide you with the necessary expertise to quickly deliver your solution to the market and ensure its viability. We also offer business analysis services, SEO, and marketing, and we help businesses automate their processes.
Launching a startup alone is definitely possible, and being a solo founder comes with several advantages. For one, it’s often less expensive to start a startup by yourself, you have full control over decisions, and you get to keep all the profits. However, if you wonder how to build a startup solo, we’d say you should prepare for some challenges. First, achieving disruptive growth as a single individual can be daunting. You need to know how to start a startup from scratch, understand your industry thoroughly, monitor your competition closely, market your business, raise funds, and manage a team of freelancers or outsourced specialists, among other tasks.
To ensure your startup’s viability, focus on creating a solution for a widespread problem that is significant enough for people to be willing to pay for it. Additionally, your solution should be more effective than existing alternatives in the market. Next, determine how to build a startup and raise awareness about your solution among potential customers. Lastly, be responsive to customer feedback and committed to offering high-quality products and services. That’s it.
About 90% of startups across various industries fail eventually. Among these, 10% do not survive past their first year, and only about 50% make it through the first five years. The primary reasons for failure include a lack of market demand, running out of cash, having a weak team, and an inability to compete effectively. This highlights that it’s not enough to know how to found a startup; maintaining and growing it successfully is where the real challenge lies.
Choosing the right startup team involves preparing for potential challenges and selecting individuals who know how to build a startup. It’s crucial to identify areas where your own skills and knowledge may fall short. Remember, your startup team should be viewed as a long-term investment, ready to support your startup process for years to come. Therefore, it’s important to choose team members who are not only passionate about your vision but whose values align with yours. Additionally, diversity in skills and perspectives is vital. Team members should complement each other’s strengths and weaknesses, promoting an environment where creativity and innovation can thrive. This balance is key to building a successful, cohesive team.