How to Launch a Startup: From an Idea to Fundraising

1. How to Launch a Startup: From an Idea to Fundraising

2. An introduction to launching a startup The startup world is a hotbed of activity at the moment. Startups are popping up across all industries, from healthcare to transportation or anything else you can think of. More and more people are wondering how to start a startup. Here we’ll try to answer this question but first, let’s just kick things off by saying the average survival rate for a startup is around10%. That’s right — 90% of startups are shuttered before they grow enough to sustain themselves. What are the common reasons for startup failure? 42% NO MARKET NEED 29% Ran Out of cash 23% Not the right team 19% GET OUTCOMPETED 18% PRICING/COST ISSUES 17% POOR PRODUCT 17% NEED/LACK BUSINESS MODEL 14% POOR MARKETING 14% IGNORE CUSTOMERS 13% PRODUCT MIS-TIMED 13% LOSE FOCUS 13% DISHARMONY ON TEAM/INVESTORS 10% PIVOT GONE BAD 9% LACK PASSION 9% BAD LOCATION 8% NO FINANCING/INVESTOR INTEREST While the stats paint a bleak picture, knowledge is on your side. By having a strong plan and the drive to see it through, your startup has all chances for survival. So where should you start? In this guide, we’ll cover the followingquestions: 1. Idea generation and validation 2. Hiring a skilled and unified founding team 3. Building an MVP 4. Product-market fit 5. Fundraising 2

3. How to generate and validate an idea? Do you already have a killer product idea? If so, congratulations! You can proceed to the next section. If not, there are a ton of ways to start brainstorming for a viable idea. How to generate an Idea? Analyze what your team is especially good at; Start with a problem personally encountered; Think of things you personally wish existed; Look for things in the world that have changed recently; Look for new variants of successful companies; Talk to people and ask what problems they have; Look for big industries with little competition. How to validate an Idea? Once you’ve accumulated a few promising business ideas, it’s time to start evaluating them critically for viability. Identify your target group; Reach people from your target group and talk to them; Analyze you competitors; Pitch and discuss your idea; Combine your idea with what you learned; Make a proof of concept; Get users and collect feedback; Iterate and prepare to build an MVP. Results of idea validation Close the first sale; Cancel inviable product idea; Do a pivot; Develop or Continue MVP Development. 3

4. How to Hire Developers for a Startup? A strong team is the backbone of any startup. Failing to find the appropriate people for the job can result in unwanted consequences. At the same time, the right team who shares your values and has industry-related skills, can make your product stand out. Which team roles might you need when hiring for a startup? Project manager; Back-end developer; UX/UI designer; QA engineer. Front-end developer; Tech lead and/or software architect; How to find them? ? Assemble an in-house team - You’re the one to hunt talent: post job openings on local boards, browse LinkedIn, look for candidates, and hold interviews? ? Find individual freelancers - You can opt for freelance startup developers. This path supposes turning to platforms like Toptal or Upwork to find individuals to work on your project? ? Outsource the development part - This outsourcing model is about turnkey projects you pass on to a third-party outsourcing provider. Tips for hiring the right team: Be open about the value you’re offering; Don’t be too slow with hiring; Don’t rush with the process of hiring Be realistic about your expectations developers; and think about value; Mind the timing and stage; Look for diligent and self-organized problem-solvers; Don’t skimp on proper candidate evaluation; Prioritize efficient communication. Pssss...looking for a team? CONTACT US! 4

5. How to Build an MVP in 8 steps? It makes sense to start the product development lifecycle by building an MVP. This way, you'll ensure the project is worth it and learn how to proceed with it effectively. The process of developing an MVP can be broken down into several milestones. 1 Conduct market research — analyze the audience’s needs, product demand, customer behavior, major market trends, price level, and return rate. Narrow down the target audience — define the age, gender, paying capacity, preferred 2 gadgets, and what problem your MVP will be solving to get a portrait of your average product consumer. 3 Define the project vision — decide how your product will stand out, what makes it unique, and how it'll bring value to your users. This will allow for prioritizing features. 4 Study your competitors — browse existing similar solutions to evaluate how your product can outperform them. Look at your rivals' websites, social media, and other online activity. 5 Shortlist the MVP features — choose a few main features that'll serve as your minimum viable product's backbone. Put together a list of must-have functionality and prioritize it. Map out the user flow — using a map or diagram, demonstrate how a user will interact with 6 your solution. Create wireframes, mockups, and clickable prototypes to ensure impeccable usability. 7 Develop and test the MVP — now it's time to move on to actual development work. Set up sprints and make sure to test the created features thoroughly to avoid glitches. 8 Continue improving the MVP — once the MVP is launched, analyze the early adopters' feedback. Keep an eye on your analytics, make tweaks, and work on other features. 4

6. How do you know that people are enjoying your product? Product-market fit indicates that a company has delivered a quality product that is relevant to the market and is accepted by the target audience because it brings value, satisfies their needs, and is affordable. Finding product-market fit is crucial because it can fuel you to success. The two can’t exist apart from each other, and PMF should be your primary objective, as its absence is one of the most widespread reasons for startup failure. How to find product-market fit? 1 2 3 4 5 Find your target audience Study the market Define your value proposition Build an MVP Launch and analyze the product How to measure product-market fit? Qualitative ways Quantitative ? Hold in-depth interviews with your users? Analyze the key metrics? ? Run surveys (via email send-outs or ? Daily Active Users (DAU) and Monthly specially-designed tools that help to embed Active Users (MAU)? questionnaires and forms straight into the ? Conversion rate? product)? ? NPS? ? Browse the reviews that your customers ? Retention? write on the Internet? ? Lifetime value (LTV)? ? Analyze data from heat maps, click maps, ? Customer acquisition cost (CAC). etc. Signals that you lack product-market fit ? The target audience doesn’t gain value from the product? ? The sales cycle is extensive, and the lead conversions are not impressive? ? You don’t have many customers, and their number isn’t growing at the expected rate? ? You often see cases of page abandonment or people leaving after the free trial period? ? No one is talking about the product or there are many negative user reviews. 6

7. Fundraising Funding should not be your first step. It should come later in the startup journey. When getting funding, investors will ask for some data analytics because they want to know whether the product has gained any traction or not. It means that first, you need to establish product- market fit, get early adopters, and iterate fast before implementing a large-scale go-to market strategy. How does startup funding work? Startup founders Potential investors trying to get funding for their support the business and help company. As the businesses it achieve its aims, as they grow, they move to different usually have partial ownership startup funding rounds. of the company. Sources for fundraising Funding option How it works Crowdfunding It means getting money from actual users. Services that can help crowdfund your startup include Kickstarter, IndieGogo, and Fundable - the options available are either pre-selling an MVP, or selling percentages of company stock to investors. Angel investors Angel investors are often ex-founders that have a combination of startup experience and tons of cash from their last big exit. Accelerators Startup accelerators don’t just offer money. They offer connections, mentoring, and opportunities that would otherwise be out of reach for most startups. 7

8. Major takeaways It is a matter of fact that starting a tech company is no walk in the park. There are many pitfalls when building something as complex as software but following our guide you’re set with a battle-tested framework that will help you on the way to success. Summing up: Look not for a brilliant idea, but for a viable one; Find people who share your values and have industry-related skills to bring your idea to life; Start with an MVP and then go for a full-fledged product; Make sure that you’re building what people need by achieving product-market fit; Get funding after you gain traction. Let's Talk If you have any questions regarding the MVP development process, feel free to get in touch with Upsilon's team of professionals. We'll happily provide you with our expertise during a consultation and discuss your business needs. Email Website hi@upsilonit.com upsilonit.com 8