Every entrepreneur who has just started his own business is dreaming about having the most successful startup. However, there is a long way to find the right path to realize the idea in the best way.
Cloudways has recently provided the best startups in 2020 and represented spheres at which startups have developed successful ideas and strategies. Here you can also find thorough examples of the most successful startups in 2020.
There is still the question: “How to become the most successful startup? How and where to launch it?”
For European companies, Ukraine serves the best country for setting a startup. Ukraine is being a home to some successful companies which have gone international. Ukraine takes place in the tech startup ecosystem in Europe. Incubators, VC investment, accelerators help to promote startups in Ukraine at the early stage and increase global competitiveness.
There are some of the best conditions for setting a startup. Ukraine is very famous for its talented IT people. Every day the number of developers and IT engineers is growing regarding the increasing demand. University programs are conducting training in different IT fields.
Ukraine is considered to be one of the best places to have an R&D center. European companies prefer to set them in Ukraine at a remote base. Ukrainian remote R&D centers have many advantages. There are no legal restrictions, the rapid growth of the software market, ever-growing talented fund, thorough English studying, perfect time zone, and minimal cultural difference.
Every R&D center is trying to hire a team in Ukraine instead of attracting a team from abroad. However, every case is very special. For European companies, Ukraine is one of the best countries to gain an offshore development team. Ukraine is highlighted in Gartner’s top 30 countries for offshore services.
Even when you find a suitable geographical place to set and develop your startup, it is necessary to understand the whole process of idea validation before you build a startup and how not to make it fail.
Every business starts with an idea. This idea needs to get through experimentations, acceptance by people. Coming up with excellent ideas can be hard. However, their validation is an even harder process, much more serious than anyone can realize. It does not matter how world-changing the idea is, if the product comes out before its validation, there is a high possibility that it will fail.
The great question coming to our mind is “Why do startups fail?”. Is it because the product was that bad? Or was it influenced by internal and external factors?
CB Insights did great research on the most popular reasons why startups fail. Below you can find the highlighted reasons, however, they do not add up to 100 %.
- Around 42% failed as there was no real market need.
- Around 29% failed as the cash was over.
- Around 23% crashed as they did not have the right and inspired team.
- Around 19% were outperformed by competitors.
- Around 18% had issues with the price.
- Around 17% had a product which potential users found very unfriendly.
- Around 17 % had a product with an inefficient business model.
- Around 14% had bad marketing.
- Around 14% did not pay any attention to their customers.
- Around 14% were late with the introduction of their product.
From the statistics above, it is clearly seen that 7 out of 10 reasons why startups crushed is because they had to do with a product-market fit. Some reasons are considered from the growth angle, some are user experience issues. However, the bottom line is the same everywhere.
In case you do not take enough time for a product to find out the issue you are trying to solve, to discover how many people have that particular problem, to find out how many of them can pay to solve it, you are approaching the product to failure. Because you are not checking if a product is needed. The main thing is to understand if you are solving the problem which bothers users, or if you can monetize it.
Every time before releasing the product it is essential to keep in mind that validation of the product helps to save money in the long term.
Validation is always a discovery process where you should stay impartial and be able to get the scope of a problem you are addressing. Here it is essential to get what it means for the user that your product does not exist. If there are no pain points, there is no validation of the product. If the idea of the product is invalidated, the argument to pivot will take the place.
There are some essential steps on how to validate the idea.
Validate an idea with potential users.
At this stage, you should look for in(validation) idea and not search for people who would confirm the biases.
- Never should ask the leading questions. Leading questions suggest the answer in the way they are phrased. Questions should be asked in an open way so there will be freedom for your partner to answer without feeling any restrictions.
- Validate the problem and find out if and how you are fixing it. You are supposed to get to know if the issue or need you have found is taken in the same manner by potential users. It is necessary to understand the process along with the implications of the problem for a person you have a conversation with.
- Find out what people do to fix the issue, how much resources (energy, time, thoughts) they are devoting to the problem. The more serious issue you have, the more products will be in demand and it will be likely to succeed.
- Make sure that people spend money on solving their problems. As soon as you know that the need for the product is high, you need to check if potential users are spending money on solving the problem and want to spend money to solve everything fast.
- Ask potential users about past actions and not about future experiences. In fact, people do not always perform what they committed to do. It is necessary to have casual talks with potential users of your product. It is always necessary to have planned questions about the product while talking to potential users. But you must be always ready to change your plan and follow-up when your partner gives some useful insight. It is the best way to shape the product.
Having from 5 to 10 conversations with potential users is the best to validate the exact problem and all the issues generated by it. When conversations occur in the same way, where people refer to the stated problem, it means that people will be willing to pay money for dealing with the problem and you should keep the validation process. When conversations are divided, it means that potential users should be defined better than they are and more investments should be done into professional research.
Define core audience.
Having 5-10 successful conversations does not define your audience. It is necessary to identify your audience, its size. This will provide better estimations and projections.
The crucial part of this step is to identify where your audience is located and define its size.
You can apply different characteristics to divide your audience. The best suitable will be sociodemographic characteristics or by the important job that has to be done. But anyway, it should be described by at least 3 sociodemographic characteristics.
If around 10,000 people fit the audience criteria, you can make sure that it is your potential core audience. And if they are located in the same area.
Validate product with the investor.
It is necessary to keep in mind that you should look for commitment and not compliments while talking to investors. Investors will participate in the development of the product only when they see the potential.
The best way to make an investor interested is to elaborate on the problem, solution, and business model. The investor needs to see that you know and understand what you want to achieve. You should know how the problem affects people and realize how your product can solve the problem. The investor needs to see all the statistics, insights, main points from the industry reports, and understand the business model. He needs to be sure that your business is running well.
The investor is usually inspired not only by the fact of how it influences any user but also by showing in numbers how many people struggle with that problem.
When by the end of the conversation with the investor, if you meet these criteria, you can consider that you managed to reach success:
- You have got a commitment of funding and the Terms Sheet to accompany it.
- You have an offer to be guided on a regular basis.
- You are introduced to the other investor.
As soon as your idea is approved you can start building a startup!
Before building a successful startup, you need to get through the process of idea validation. Even if an investor is getting interested in your idea at the very beginning, a live MVP (minimum viable product) with potential users and figures to show their engagement and the revenue are enhancing your chances to be more attractive for investors. Also do not forget about commitment and to show the perspective of ideas. Validation work is hard. But if you have validation from potential users, know the core audience, follow to an MVP creation!