Do you have an innovative idea? What to do next?

It was a typical day for Alice (name changed) at her home. She was busy doing her household chores and looked outside her window at the green field. It was then that it suddenly struck her!

I’m sure that like Alice you have had your “Eureka” moments in your life. Since we come across various incidents, people, problems daily, it’s very natural to come up with a solution for a definite problem which could be a game changer in the market. And if curated properly, might become “The Billion Dollar Idea”.

However, as common with most we have a tendency to sleep over that idea and finally forget about it. People often say that entrepreneurship is for the brave hearts and not for the faint hearted. I agree that nurturing and curating your idea requires a lot of effort, dedication, courage and will. At the same time I believe that if someone is aware of the right tools and options available at various stages of the idea development and transforming it to your business, things will become much simpler.

Idea/Seed phase

Have you ever thought of any innovative idea which (according to you) could be a groundbreaking product/service? And then you started wondering – what next? Well, there are quite a few options at this stage.

Self-start

Funding, Market Research & Product Development – Done by the founders

For the funding part, many founders depend on their own fund. In case there is a shortfall on that fund, they get help from their friends and/or family. This is one of the most common approach.

For the Market Research & Product Development, these founders will have someone among themselves who can perform the following:

  • Market Research, Competitor Analysis
  • Target customer identification
  • Development of the MVP or the Minimum Viable Product
How to use Angel Funding?

Funding – Angel Investors

Market Research & Product Development – Done by founders

This is also a common approach these days in case the founders are not able to accumulate the required fund from friends and/or family. Some organizations assist at this stage to generate the required fund (e.g. Tracxn Labs).

The market research & product development (same as the list mentioned above) is done by the founders.

What are Startup Incubators?

Funding – Arranged by Incubators or self

Market Research & Product Development – Services available from Incubators

Startup Incubators are organizations/institutions which help the startups in providing various services (e.g. office space, marketing, legal services, etc.) required for the startup to start of. For more details, see here

In return for the services, the startup incubators demand a percentage of the company equity.

How Startup Accelerators can help a startup?

Funding – Arranged by Accelerators (mostly) or self

Market Research & Product Development – Services available from Accelerators or done by self after passing out from the accelerator program.

Startup Accelerators programs that are organized by various organizations/institutions. Presence of expertise to guide the startup companies is what differentiates accelerators from incubators. The entry to such programs are generally through a selection program. Check a full list of the various accelerator programs here

 

The output of the seed/idea stage is to create the Minimum Viable Product which can be used to showcase for further rounds of funding.

Growth Stage

By now, you have converted your innovative idea to the first cut basic product (or MVP). Now you need to scale it up for sell it to the customers. Again, there are two options available.

Funding though cash inflow

This is the most sustainable option. In case you have already started selling your product to a few customers, you can use the cash generated from that to support your mass production. In case of a service startup, you can use the funds generated to hire more people (maybe a products head or more developers/analysts).

Venture Capital Funding

This is one of the most commonly used option. If you check Tracxn’s blog, you will find a lot of such funding happening for various startups. Venture capitals constitute of people from various part of the industry with experience in various aspects of running a business. Venture Capitalists typically provide not just the required funds, but also help the startup companies with the necessary expertise to be successful.

 

Still in doubt? Reach out to me or post your comments.

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