If you have realized that you have an idea for a genuinely useful product or service destined to be a success, then count yourself among the founders of startups.
The expression ‘I would love to start my own business but do not have any ideas’ sounds irrational because, without an idea, you can only help someone else to bring their idea to life. In other words, you will work as an employee. You will sign the other side of the cheque.
What sets successful entrepreneurs apart from those that fail to live their dream is the willingness to take the required steps and create a viable business from their idea. It applies to anyone with an idea for a digital product or service that could be sold.
Here are some essential steps every new SaaS entrepreneur can take to turn their idea into a tech startup.
Typically successful entrepreneurs are usually motivated by a specific problem or experience they have encountered.
After working in a particular industry for several years, they often spot inefficiencies within it. They then set out to solve the problem.
For instance, after experiencing many inadequacies in how customers and small-medium enterprises interact with banks, a startup came up with the vision to digitalize everyday interaction between SMEs and banks. Consequently, day-to-day interactions such as account opening, loan requests, and submitting invoices become easier, cheaper, and faster for both parties.
You, too, can uncover such pain points by doing some research. If no one is addressing a problem in the market, this is a goldmine for you.
Use your industry experience, start with a small team, and set out to resolve it. Of course, success is more likely when you set out to solve a problem. But, more importantly, you successfully avoid becoming one of those startups that fail for lack of market demand.
Here is an expert tip:
Make no assumptions about the demand for your product. Quantifying customer action is more important than quantifying customer intent. The only question you should ask yourself is will users like your product enough for them to take action at a cost that allows you to maintain a competitive advantage?
Next, you must ensure your idea is built for the person you are solving a problem for.
The most common mistake we see is that many founding teams often assume they know what their users need.
Therefore, they are astonished by the low adoption rate.
It is impossible to envision a time when the user has been so demanding. So, do not just focus on solving problems but also on delivering the best possible experience
To do this, you will have to assess your stakeholder community, competitors, and market size.
After you figure out how your startup idea will solve a problem, you need to investigate who your product will benefit from.
Describe them based on demographics, psychology, geography, observed behavior, and other relevant aspects.
Identifying your stakeholders will help you build the ideal user experience by providing crucial information.
It is time to look at your competition after analyzing the stakeholders involved in your startup.
Bringing your startup idea to life requires looking at existing companies in your market that solve your target stakeholder’s problem.
Direct, indirect, and potential competitors are all things to consider here.
Starting with a list of all your competitors is a good idea. Become familiar with them by identifying their:
Here are some tools our product team recommends to help you get started:
Crunchbase and Statista are good resources for finding out what competitors are raising in terms of revenue and capital.
SimilarWeb can be used to find out how many users your competitors have.
The following questions can be answered alongside the above list to gather even more information:
Identify the main strengths and weaknesses of your competitors based on this information.
As a result, you can figure out where your startup fits into your competitive market. As a final step, you should determine the size of your market.
Three simple factors can help you determine your market size:
It is recommended that you use tools such as Statista and Google Trends to find statistics on the above.
Remember that SOM is calculated mainly based on your estimated market penetration potential. Therefore, during the early stages of your startup journey, you will likely have no precise value for that category.
That said, it is imperative to start thinking about how much market share you believe your startup idea can eventually achieve.
Now that you have conducted stakeholder analysis and competitor benchmarking, it is time to move forward:
Now that you have completed your market research, it is time to assess its financial viability. First, create a financial model focusing on how your product or service is designed, marketed, and sold to an individual user. This will provide deeper insight into the functioning of your business. To validate your projections, create a top-down financial model that examines the size of your market and the goals required to achieve profitability.
Once you are satisfied with your financial model, move on to planning the first phase of your business. This phase should bring your ideas to life by mapping out your mission, objectives, keys to success, target market, competitive advantage, and basic strategies, ensuring that all team members and mentors are on the same page.
Now that it looks financially viable, it is time to secure funds because entrepreneurship is not solely driven by financial gain. Some funding sources include self-funding, money from friends and family, credit cards, loans, angel investors, and venture capitalists willing to invest in your mission for a share of the profits and decision-making power.
It is important to remember that each funding source has its own set of rewards and risks.
Now focus on creating an elevator pitch to highlight your value proposition. Craft a Value Proposition by combining:
Use this template to get started:
____ (product name) is perceived for ____ (your stakeholders) who ____ (describe their problem). ____ (product name) is a_____ (list its key benefit or solution). Unlike ____ (the current solution) ____ (explain what segregates your product from the competition or existing solutions).
Ensure your value proposition is clear from the elevator pitch. If not, re-examine the target market, competition, or problem to be solved.
If clear, focus on assumptions surrounding the pitch.
Assumptions behind your value proposition include assumptions about user satisfaction with current solutions and the potential for your startup idea to address this.
Examine the statements in your pitch or proposition to determine relevant assumptions, then check if your research supports these assumptions with stakeholder and competitor validation.
An MVP can also help you validate some of the assumptions. But you must first identify those assumptions and then use KPIs to measure them. Then, you can focus on testing hypotheses before adding extras through iterations. And avoid wasting time and resources on non-essential features.
At DFY SaaS, we recommend entrepreneurs take the minimum viable product (MVP) route. Why?
The next move to turn your startup idea into a reality is to make a list of essential features for MVP. Because having a clear list of MVP features can benefit the founder in several ways: But to list out important minimum viable product (MVP) features of a SaaS solution, you need to:
For your idea to become an MVP, you will need a team of technical experts, such as a user interface (UI)/user experience (UX) designer, a front-end developer, a back-end developer, and a dedicated project manager. Your vision cannot be realized without this ensemble.
Unfortunately, many entrepreneurs are of the view they just need a cheap freelance developer to develop a digital product. But in reality, it takes more than two to tango.
Choosing freelancers from various freelance platforms and asking them to design, build, and launch SaaS solutions has also become quite the norm. But, many projects never get off the ground because freelancers often fail to work as a team. Why?
They all want to enforce their views because they lack the flexibility to embrace someone’s idea and adapt their code or design accordingly. As a result, they always struggle to achieve a common goal – building a successful SaaS solution.
Thus, as a non-technical founder, locating assistance in building your product can be a major obstacle. Countless founding teams have faced this challenge, and the problem has only worsened over time. Thanks to fake profiles, insufficient skills, and experience to build a SaaS solution.
This led to the creation of DFY SaaS to help entrepreneurs bring their startup ideas to life without the difficulties of finding technical teams or experts that have worked together on several projects.
Generally speaking, there are three options for building a startup product:
We advise you to prioritize finding a suitable CTO or technical co-founder, as they have technical expertise, leadership, and management skills, are passionate about your startup, and can communicate and align with you effectively. However, this can be a challenging search, especially when you are short on time.
If you opt for freelance developers, be prepared to manage them on your own. This may not be suitable unless you have prior experience leading tech teams. Working with a software development company may have project management support, but it also comes with challenges.
When choosing a software development partner, thoroughly research and select a company that has extensive experience in developing SaaS solutions, so you can also seek guidance when needed.
Building an MVP alone is not enough. You need to have a test plan to validate your MVP model. While a company may think its product will satisfy its customers’ needs, it cannot be certain until and unless it runs an MVP test and is thriving.
Taking the time to test and validate your MVP ensures you are not wasting time and resources developing a product that is not technically feasible or does not target a viable market.
Testing the usability of a product requires starting at one level and moving to the next to gain customers’ trust. Basic functional rudiments such as user integration and functionality must be tested to deliver a sound minimum viable product while still adhering to cost constraints.
Do not expect this to go smoothly. Understanding your markets and customers’ pain points is essential, but now you need to get into specifics.
In 42% of reported cases, it is found that most startups failed because they could not find a market. So, validating your MVP is a crucial step toward finding the truth. To solve a problem, you have to go beyond showing people how you solved it; you have to explain why it was a problem and why they wanted it to be solved.
Here’s how to know if your tech startup idea has what it takes to succeed.
It is also common for first-time entrepreneurs to try to tackle a large market from scratch. This significantly reduces your MVP’s success chances. It results in an overstretching of resources, and when significant problems arise, you may be unable to pivot.
The niche market for a startup’s product must therefore be defined. If your target audience is smaller, you can use more resources to meet their needs better than your competitors. However, it does not mean you should target a small audience; you must solve a small problem.
Any MVP’s success depends on identifying the subset of ideal users whose needs should drive its development.
You might target the following three audiences with your MVP:
HOW TO TURN YOUR IDEA INTO A TECH STARTUP?
February 27, 2023
DFY SaaS Team Set to Inspire and Connect at STEP Conference 2023
February 17, 2023
Guide to Determine Custom Software Development Pricing
February 3, 2023
Single-Tenant Vs Multi-Tenant Pros and Cons
January 30, 2023
DFY SaaS can help you avoid costly pitfalls by building in the right way from the start, so you can go the extra mile and increase your chances for success.
Never Miss A Post!
Sign up for free and be the first to get
notified about updates.
Thank you for subscribing! Awesome content is on its way.
Something went wrong.