The hardest thing about getting started is getting started. – Guy Kawasaki
Raise your hand if you’re prone to dreaming big! You’ve fantasized how the next world-changing company will be created in your garage; you’ll sell your car to gather the initial capital and your undeniable creativity and vision will carve your name in history. You’ll do good to the world, you’ll create real impact, and you’ll become a philanthropist. You’ll wear only plain T-shirts and ace that Steve-Jobs-minimalistic-style, you’ll speak meaningful words of wisdom on global conferences and inspire others to follow your footsteps. You’ll be remembered as a person who was a bit eccentric but extraordinary. A lifelong learner. A true genius. A legend.
Oh wait. Just a second…
You don’t actually own a car you can sell.
And you don’t really know how does one become a startupper. Plus, you don’t have an idea that could potentially change the world.
And you hate public speaking.
Damn. That’s a bummer.
Yet, millennials are labeled as the generation of startuppers and they often do have great ideas but lack the guidance and mentorship to bring them to life. With great fire in their hearts, they gravitate naturally towards the world of entrepreneurship. It’s not about the fame: it’s about the honest desire of doing something meaningful with their lives.
Unfortunately, while enthusiasm is a great thing, if it’s not channeled and rationalized – it leads to no significant results. Nine out of ten startups fail and there are numerous reasons for this disheartening piece of statistic. Some are the direct consequence of inexperience, others are there because nobody was kind enough to give the aspiring startupper a reality check. Who would have thought that sweet support of your loving nana and the best childhood friend can actually backfire?
This is why we here at Domain.me are starting a large serie of articles for startuppers!
A startup is a human institution designed to create a new product or service under conditions of extreme uncertainty.Eric Ries, author of The Lean Startup
Brace yourself as we’re about to cover everything: from ways you can evaluate your startup idea on the market, actual practical advice on funding and legal sides of becoming an entrepreneur, guidance regarding building the culture within your startup, distinguishing yourself from the competition, all the way to exclusive insights from successful startups and analysis of failed ones. We’ll rely on conclusions of the greatest entrepreneurs, innovators, and experts of today.
The Ugly Truth: If Everybody Could be a Startupper – They Probably Would
You might think you can read your way to becoming a startupper but it is actually a bit more complex than that. Just as one can never fully prepare for becoming a parent by reading book manuals – neither can entrepreneurs bring up their baby startup by swimming in theory.
However, this doesn’t mean you should force your hand and reject all the useful resources that are out there. Heck, you probably wouldn’t be reading this then, right? The fact is, a number of people don’t really understand how startup world functions but are really eager to become a part of it. Soak in all the knowledge out there but try treating it as an additional ingredient for the creative mix you’re going to make on your own. Materials you encounter should not be your destination but your starting point.
If you’re looking to become a startupper, you have to embrace a specific mindset that feeds on curiosity. This includes a lot of:
- Reading and analyzing
- Keeping up with the latest trends
- Asking questions
- Snooping around within the startup community
It will make you sensible for the next big thing and can provoke your first a-ha moment.
Sorry to disappoint you but there is not a full checklist you’ll ever be able to go through and say: YES, I am ready! You will certainly bump into dozens of articles explaining the desirable traits of startuppers, such as leadership skills, being able to show initiative, knowing how to communicate and negotiate, having a vision, etc. Although this can’t hurt and it definitely shows potential, it doesn’t instantly turn you into an entrepreneur. You have to invest a lot of effort. Like A LOT.
Here’s the thing: A) You never know you’re ready before you give it an actual try and B) there are a lot of factors that slip through and so you cannot put your finger on them when trying to dissect somebody’s else path to success.
Accepting you’ll never be fully ready is the first step. Not giving up despite the fact is what shows you’ve got startup spirit. But neither makes you a startupper (yet).
Look in the Mirror: What’s Your Deal?
Guy Kawasaki, the author of The Art of Start, disregarded the overly-forced list of questions one should honestly answer in order to determine the readiness to plunge into the startup world. He pointed out there is only one crucial question you need to examine:
Do I want to make meaning?
Seems like a cliche of soul searching but it’s actually rather logical and helpful. Before defining your startup idea, you should define your motivation. This requires a great deal of brainstorming as you need to step away from the vague, abstract notions. While I want to change to world is a legit and humane wish – it’s merely an empty phrase if you don’t narrow your goals. Give it a real frame. As Kawasaki suggests, think backwards: ask yourself how the world would be worse without your startup?
Shoot for doing things at least ten times better than the status quo.Guy Kawasaki, author of The Art of Start
This question beats all the checklists you may run into as it is the first step towards developing your idea and testing if it’s worth on the market and it is the center of your pre-launch phase. It is essential to keep your heart and brain in balance: being lead by your emotions shows you have passion but not rationalizing the concept of your startup and putting it in a realistic context is the recipe for failure.
Let’s see how a successful startup emerge.me handled this. Emerge.me focuses on providing insurance for medical emergencies: you can check out their explainer video to get a fuller understanding of their humane mission.
We spoke with Marc Howard, Marketing and Growth Expert from emerge.me, and asked him to share with us the way the idea for their startup was born, their first steps and challenges:
The concept for emerge.me came from the fact that even if you have health insurance, the out-of-pocket and non-medical cost can still pose a significant financial burden before your insurance kicks-in. Also most people see this pain when they find out that they have to pay thousands of dollars to cover their deductible before insurance pays.
Our story began when Wes Thompson, the founder of emerge.me worked at an insurance company where an employee’s spouse had a heart attack. The employee soon found out that their primary health insurance wasn’t enough which ended up putting the family into serious financial debt. A couple of years later, emerge.me was started and the challenge was figuring out how to help people figure out their financial gap and then provide an unbiased and transparent recommendation service to help consumers compare quotes across many different insurance providers.
Over a year was spent building up this in-house algorithm which is now the heart of the emerge.me platform where a site visitor answers a few questions then gets matched with a plan to fill in the gaps in their financial situation based on lifestyle, budget and health insurance information.
Another challenge was the fact that supplemental health insurance like critical illness and physical injury are almost exclusively sold via a traditional insurance agent or broker. The question was not just whether people would actually purchase a policy online but would people actually understand the benefits of our products. There is not a lot of trust these days in the insurance industry which is why being transparent and unbiased are two key principles that we are betting our brand on.
So, what can we learn from emerge.me?
- Sometimes, the most significant startup ideas come naturally and spontaneously as the world needs them to solve a certain problem
- Ideas need time to mature until they are ready
- Thoroughly mapping out the problem takes time too – but it pays off in the end
- Deeply analyzing challenges is the first step towards building and positioning your brand
- Honest approach and trust are important (no matter the niche, we stand by this)
A big shout out to Marc for taking the time to provide us with such a comprehensive answer! It’s awesome to see a busy startup has the time to bring back to the community.
Where is Your Idea Hiding?
Although aspiring startuppers usually have a certain business idea in mind and are just looking for a way to implement it, it’s not always the case. Sometimes, you get all fired up to make a difference but you don’t know where to start.
Learn from those who have devoted their time to studying how great ideas are generated. Steven Johnson, the author of Where Good Ideas Come From: The Natural History of Innovation, pointed out some misconceptions we have regarding the way innovations are born:
- Forget sudden epiphanies: ideas take time to evolve (sometimes, we’re talking years) and they kind of lurk in the back of your mind without you even noticing it. They are usually born out of collision between the smaller ones.
- Don’t be impatient: while brainstorming might help you proactively seek connections between different ideas you’ve reached, you cannot force great innovations to happen when you want them to.
- Listen to your hunches: letting seemingly unrelated pieces of intuition merge or clash can lead to great ideas being born.
- Mingle around: socializing with different minds can help you gain a fresh perspective. As Johnson said – borrow other people’s hunches and combine them with your own.
Your idea might emerge from your moonlighting, that is – from a side project you devote yourself to in your spare time.
Startuppers are problem-solvers and contrary to the popular belief – you don’t have to pressure yourself into initiating a global revolution from the very beginning. It usually doesn’t work that way: great ideas take time to grow. If they have that initial spark, they can gradually turn into a real flame and then spread like fire in the woods.
Does the World Need Your Startup?
Paul Graham has a thought-provoking advice for startupers who are puzzled about the way of coming up with great ideas:
Live in the future, then build what’s missing.
One should always try to assess the idea based on its actual utility: if you think building a social network for imaginary friends is exactly what the world needs, you might want to chill for a bit.
Sometimes, greatest ideas are born because innovators started thinking about what they are personally missing and what could make their own lives easier. That’s how one of the most famous car brands of today was invented: Ferdinand Porsche designed it simply because none of the existing ones quite fitted his taste. Pretty bold and pretty successful: today, Porsche is worth $8.3 billion.
Guy Kawasaki has extracted the four most frequent ways and situations people come up with their ideas:
- I want one: based on personal hunch, you glance over the market, don’t see a product or a service you like and decide to design it yourself (hence the Kawasaki’s Porsche example)
- Nobody else wants to do it: although there are people who seem more competent than you (e.g. the boss of the company you work for), nobody wants to put an effort into creating something new
- It’s something revolutionary and never seen before: but most importantly, it makes life easier or solves a problem
- There’s a better way: startups doesn’t have to launch completely new products or services. In many cases, it’s all about bettering the existing ones
He who dares wins – but how do you actually evaluate your startup idea? There are two paths and you don’t have to choose between them as they are complementary:
- Ask people if they would be interested: Researching what people think is necessary. However, expect potential problems if you’re planning to launch something that’s never been seen before. Respondents might find it difficult to imagine it.
- Prototypes: Design a first low-cost version of your product or service and follow the reactions within your target audience. Only when people get the chance to see and feel your startup’s mission can you get the feedback you need.
Let’s go back to our example of emerge.me. Marc Howards was kind enough to share his team’s path and ways of determining if there was a need for their startup on the market:
We really didn’t have anything similar to compare against since supplemental health insurance is traditionally provided by an agent or broker. We were able to look at the growth trends in critical illness insurance and physical injury insurance market to see that by 2020 the revenue for these products in the U.S. is projected at $2.7b. In terms of product-market fit the challenge now is mostly about getting traction and attracting as many potential prospects to our site as possible to try out our service and ideally to purchase a policy.
We also found that there was a major gap in the education on what health insurance covers versus what it does not. This is why we decided to create a free affordability calculator and risk calculator to help people figure out their potential out-of-pocket cost and risk. Today’s healthcare landscape is a risky place particularly with the proposed changes in the Affordable Care Act. We feel that there will always be a need for more education in healthcare and we intend to be the trusted source for helping people make sense of it all at the same time covering their gaps.
Lesson time! Here’s what we can learn from the startup:
- If you’re pushing something completely new on the market, you won’t have anything to compare it to. This means you’ll have to rely on the most relevant statistics and research and assess if there is a place for your idea.
- Defining a gap: Keep in mind that just because the world misses something doesn’t mean it needs it. Emerge.me understood the problem of undereducated health insurance users and the burden of confusion within the system.
- Offering a solution: Once you define a problem and analyze all its sides, design a solution and put it in front of your audience.
Starting a startup is risky but also incredibly rewarding. You have to be prepared on the fact you can never be prepared. In addition to all the traits that are linked to successful entrepreneurs, there is one we need to specifically point out: agility.
Next article from the Domain.me startup serie will cover everything you need to know about building your startup culture, distinguishing yourself from the competition, and positioning your startup on the market.
Keep reading us, we’ve prepared a real treat for all aspiring startuppers!