Before starting: Test your gut instinct
The success of a startup idea is based on creating something new. When considering an idea, test yourself against the following questions:
- Is the idea unique? Are you disrupting something that is going on right now?
- Do you have the unit economics? Do you have the model right to build profitably? Once you were to reach scale, is what you have got defensible?
- Is the idea immune from other people starting up the same type of offering?
If you have said ‘yes’ to all of these, then you have passed stage one and next is to consider how to arrive at scale quickly, so that you have a business to build profitably from then on.
Importantly, there should be a gut feeling that ‘this will work’. As an early-stage entrepreneur, you don’t have access to data or analytics; however, you can’t rely on your gut feeling forever. As your business grows, you must measure everything that you possibly can because you’ll become increasingly reliant on data-driven decision making. The gut feel/data-driven pendulum will swing a lot on your journey.
Building a startup: Enhance, refine, collaborate
To ensure you can identify what resonates the most and where to put your efforts, test out different enhancements of your proposition in a controlled way to refine your offering. It is essential to remain open-minded throughout the early-stage process of exploring various iterations of your business, not just for product market fit but to make sure that the commercial model works.
Building a team that works for each stage of business growth is imperative. Some employees will stay with the business as it matures, other people will move on and more will come in. That is the nature of progressing a startup as the people you need in the early stages will not necessarily be the same in the later stages. However, the immovable point is to ensure that your team maintains and prioritises the values and ethos that you want to instil in your business.
As founder or CEO of a business, your leadership stance will naturally shape the working environment of your people. For me, I have found developing a collaborative atmosphere the most successful leadership route. That doesn’t mean everyone is a decision-maker, as that responsibility still lies with you. But it does mean that everybody is expected to use their voice, share their opinions, mine for the highest quality data, review what the business is doing and analyse it critically.
Yet ultimately there is only one decision-maker – and while you listen, observe, evaluate and understand, that decision has to be explicit to all those in the business. ‘Question with Respect, Commit with Unity’ is a core value we have at TrustedHousesitters.
Scaling a startup: Modelling
Over the years, I have found there are two key areas to focus on when scaling a startup. The first is scaling your technology while the business scales as the platform and website you start off with won’t necessarily be what you need a few years later.
Although that may seem an obvious point, it can be tricky to time replatforming with business growth, and in earlier days at TrustedHousesitters we experienced issues of the platform technology and scaling taking longer than expected, so plan for that.
The second focus area when looking to scale a business in a marketplace is the balance of ‘liquidity’ – keeping the supply and demand in the right proportions so both sides of the marketplace can be successful.
When you scale a marketplace like us, knowing which side is the harder to acquire and how to keep it in balance is crucial to generate the required network effects. For TrustedHousesitters these network effects are strong – as we get bigger, there are more opportunities for both the sitters to sit and in turn for owners to find sitters.
In summary
There is no one-size-fits-all guide to building a startup, but I believe you should focus on the pendulum; ensure immunity – making sure your idea has barriers to entry at as early a stage as possible; scale your technology at the right time; grow your team to match need; and consider your leadership route and working environment carefully.
Designing a global equality strategy to help employees thrive