🌱 How to Grow a Next-Gen Startup...
8 fundamental strategies for growing a next-gen startup, shared by experienced founders: Embrace bootstrapping, maintain a lean team, validate before coding, and prioritize early revenue for sustainable success.
So, you were excited about building a startup the Silicon Valley way: You know, develop an idea, convince a bunch of investors to bet loads of money on it, hire lots of people, take years to develop it, borrow some more, grow to unicorn status… and then hope to someday get a payday…
Experienced founders in The Open Letter say that things don't always work out as you expect, and investors are not foolish enough to invest in every idea.
We’ve said a few times: There are other ways of building something truly amazing. But, just in case you think we’re full of it, you should know this line of thinking is not unique to South Africa.
Canadian founder Pierre Sabbagh shared this insanely sobering post on LinkedIn. So we thought we’d use it for today’s Builders Corner.
The Experienced Founder’s Advice to First-Timers
1. Steer Clear of the Startup Hype
Don’t get swept up in the glitz of startup culture of having to constantly raise money. Focus less on fundraising and remember, a startup's worth is not in its perceived glamour but in its real business value.
2. Embrace Bootstrapping
Start with what you have. Use your own funds and invest your own time and effort. Look into government grants for initial support if need be (check the TIA seed fund grant or some of the SEDA programs). This self-reliant approach breeds resilience and creativity.
3. Build a Compact, Capable Team
Resist the urge to hire too early. But do outsource tasks that aren't core to your business. Rely on your founding team for critical operations. A lean team is nimble and more manageable.
4. Product Development: Think Before You Code
Before diving into product development, take a step back. Reconsider your initial ideas. Hold off on writing code until you have a clearer picture of what is truly needed. Validate the idea first, then make sure the market actually wants (and will pay for it) before you try to build anything scalable.
5. The Importance of 'The One Customer'
Find that one customer who can be a real partner in your journey. Someone willing to share insights into their business pains, challenges, and gaps in existing solutions. This relationship is invaluable for targeted product development.
6. Craft and Refine Your MVP
Develop your Minimum Viable Product (MVP) in collaboration with this first customer. Offer them a significant discount, but avoid giving away your product for free. This approach ensures real-world feedback and a committed early adopter.
7. Expand Through Referrals
Utilise your first customer’s network for growth. Each new customer brings opportunities for learning and product refinement.
8. Focus on Revenue from the Outset
Prioritise generating revenue from day one. Grow your business sensibly, without the pressure to expand rapidly. Always keep an eye on your financial health.