BEIRUT: Entrepreneurship is more celebrated, studied, and desirable than ever.
Business school students who flock to courses on entrepreneurship, and managers who are fearful of losing their step on the corporate ladder, yearn to step off on their own. Policymakers pin their hopes for job creation and economic growth on startups rather than on the once-pre-eminent corporate giants.
Belief in a “big money” model of entrepreneurship often accompanies this enthusiasm.
Books and courses on new ventures emphasize fundraising: how to approach investors, negotiate deals, and design optimal capital structures. The media focuses on companies which raise millions in venture capital years before any expectation of shipping actual products.
Lawmakers who favor entrepreneurship focus on tax incentives for venture capital and loan guarantees for startups.
This big-money model has little in common with the traditional low-budget startup.
Raising large money requires market research, well-thought-out business plans, top-notch founding teams, sagacious boards, quarterly performance reviews, and devilishly complex financial structures.
It is an environment in which analytical, buttoned-down professionals can make a seamless transition from the corporate world to the world of entrepreneurship.
It is not the real world of the entrepreneur.
The common man’s answer to building a real startup is bootstrapping.
Building a startup is always messy, at first; entrepreneurs are required to play many roles throughout the different stages of their company to make ends meet and then only hope that everything sticks together.
Below is a modest guide to how entrepreneurs can bootstrap their startup:
PICK YOUR CO-FOUNDER WISELY
A clash of minds could be devastating to a startup in the early stages.
While bootstrapping, most of the work is done internally, so co-founders need to compliment each other’s skill sets.
“If you’re good at different things, you have a better shot at being able to do everything between the two of you, which translates into lower expenses,” Garrett Camp, co-founder of StumbleUpon said.
According to Camp, entrepreneurs need to know exactly what they’re looking for in a co-founder. “Skills, personality traits, and experience are important factors to consider, you need to find someone that you can work very effectively and efficiently with,” he added.
There are many skills required to build a successful business: from management to product design, recruiting to financing, all the way down to logistics, “but even if you're experienced in most aspects of starting a company, there are not enough hours in the day to do everything,” he said.
OUTSOURCE WHAT’S NECESSARY
Outsourcing is a common practice many startups use to complete a myriad of tasks that can’t be done in-house, but entrepreneurs need to thoroughly analyze what tasks should be exported, in order to dodge avoidable expenses and solid learning experience.
What startups outsource depends on is the nature of their business and your goals, of course. But co-founders have to approach outsourcing the right way or they will risk losing money, according to Adam Kanso, CEO of Mama’s Apron, and a local startup that delivers home-cooked meals.
“For example, at the beginning, we started delivering the food ourselves until we outsourced that aspect of our business to another startup, to grant us more time to enhance the products, creating a better marketing strategy, or just dealing with the logistics,” Kanso told Annahar.
This will help the startup remain focused in the early stages to tackle the many hurdles a nascent company faces when just hitting the market.
VALIDATE YOUR PRODUCT/SERVICE
Validate the idea to others, build a "pitch deck" to introduce people to it and start pitching to friends and family, Mark Haidar, founder and Chairman of Dialexa, a U.S. based incubator, said.
“When you build this pitch deck, try to tell a story about it and then pitch it to people close to you, see if they actually like it, see if your friends would invest their own personal money in it while encouraging them to criticize and poke holes in it,” the Lebanese entrepreneur said, emphasizing that criticism will help in perfecting the pitching technique.
The most important part of this step is to run the idea by potential customers and incorporate their opinion to see if the product offers a solution.
Do this before building the product to lower the chances of wasting valuable time and money.
Creating startups is a difficult endeavor, as is the case of turning an idea into reality, but it’s a little bit easier when a great team is formed around the idea for execution.
“Ask yourself, can you convince someone else to leave their job or take that risk and join your company,” Haidar explained, noting that this validation can be done without building the initial product or taking any risks.
BUILD AN MVP/MLP
Don’t go and implement your vision, which might cost valuable time and money, before finding the Minimum Viable Product or what Haidar calls the “Minimal Lovable Product.”
He noted that 80 percent of users will use 20 percent of the features that the product has to offer, so “find the core feature set in your product and build it in a great way and make sure people love it.”
Test it in a closed environment where people aren’t going to talk, share, Tweet or post about it to others and get feedback while not getting offended by criticism since a lot of “entrepreneurs are very passionate about this product and it’s their baby and no one likes calling their baby ugly.”
Listen closely to feedback while having empathy toward customers, since their true and honest feedback is what will make the product succeed and soften out the rough edges.
MENTORS AND PROGRAMS
The most valuable advice any entrepreneur can stumble upon is when asking a mentor; they will provide priceless on-the-go counseling from an outside and technical view that would help fill any gaps the company is suffering from.
“If you think your idea or startup is viable, has potential, and collects traction with people, then reach out to incubator and accelerator programs that are more than willing to help out any struggling entrepreneur, or maybe enroll in one of their programs,” according to Dave McClure, founder of 500 startups.
Technology reigns for supreme in this area.
Thanks to the dominance of social media and widely spread smartphone penetration, entrepreneurs have an arsenal of weapons to use to market themselves and gain customer traction across different demographics.
“Entrepreneurs no longer need to break the bank to afford a proper marketing strategy but can learn toward learning a number of tips and tricks they could use to efficiently set up a professional strategy for their startups,” Lara Noujaim, Director of Publishing at Game Cooks.
Noujaim highlighted that nascent companies can experiment with different methods and approaches to marketing themselves, while using app analytics to determine their target market and audience to cater to their needs and wants.
“Startups can take advantage of content marketing to help tell the story of their company or fresh information that could attract potential customers,” she added.
Entrepreneurs should roll up their sleeves and attend a number of networking events to mingle with influencers, journalists, and media figures to help them spread the word of their startup or services to the right crowd.
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