Ans:- key lessons about innovative entrepreneurial product development :-
Starting a new business can be a daunting task. There are myriad issues a new entrepreneur will encounter: legal issues, financing, marketing, product development, intellectual property, human resources—the list is endless. Many new entrepreneurs are simply overwhelmed by all the things they are expected to know.
Having been involved in hundreds of startups as an entrepreneur, lawyer, venture capital investor, angel investor, and Board member, I have learned a number of real-world lessons. In this article, I share 17 of the most important ones, along with references to other helpful articles that can offer you a more in-depth discussion of each topic.
1. Come Up With a Great Name for Your Business.
Finding the right name for your startup can have a significant impact on your success. The wrong name could result in insurmountable legal and business hurdles. Here are some quick tips for naming your startup:
2. Understand That Raising Financing Is Difficult.
Raising financing for your startup will likely be more difficult and more time consuming than you imagine. It takes a great deal of effort to convince angel investors or venture capitalists to invest in your company. So you need to anticipate the time delays involved.
Don’t waste your time trying to require prospective angel or venture capital investors to sign a Non-Disclosure Agreement (NDA) so that they won’t steal your idea. It’s counterproductive and will slow down your fundraising. And many investors will refuse anyway. It’s hard enough to get a meeting with an investor, so don’t put another hurdle in your way.
3. Focus on Building a Great Product—But Don’t Take Forever to Launch.
Your product or service has to be at least good, if not great, to start out with. It has to be differentiated in some meaningful and important way from your competitors’ offerings. All else follows from this principle. Don’t dawdle on getting your product out to the market, as early customer feedback is one of the best ways to help improve it. But you do want a minimally viable product to begin with.
4. Become a Strong Salesperson.
If your business is to become successful, you must become a great salesperson. You are going to have to “sell” your business not only to customers but also to prospective investors and even to potential employees.
You must practice. You must refine your pitch. You must get feedback. You must be extroverted. You need to show confidence. You must be positive. You must be trustworthy. You must follow-up. You must ask for the sale. You must listen.
5. Build a Great Website for Your Company.
You should devote time and effort to building a great company website. Prospective investors, customers, and partners are going to check out your site and you want to impress them with a professional product. Here are some tips for building a great company website:
6. Perfect Your Elevator Pitch.
An “elevator” pitch is intended to be a concise, compelling introduction to your business. Your can modify your elevator pitch depending on whether you are pitching to prospective investors, customers, employees, or partners. Here are a few tips for coming up with a great elevator pitch:
7. Nail Your Executive Summary and Pitch Deck.
An executive summary typically is a 3-4 page high-level summary of your company that can be presented to potential investors. A pitch deck is a 15-20 page PowerPoint presentation that lays out more visually the business for prospective investors. You absolutely have to nail both documents. You must clearly articulate:
Review other executive summaries and pitch decks to help you improve your own. If you have friends who are successful entrepreneurs, ask if you can see theirs. Plenty of examples are also available online. For example, check out the pitch decks used by Facebook, Airbnb, LinkedIn, Buzzfeed, YouTube, and WeWork.
8. Understand Financial Statements and Budgets.
You must keep on top of your expenses and learn how to thoroughly understand financial statements and budgeting. Many startups have failed because the entrepreneur wasn’t able to adjust spending to avoid running out of cash. Establishing a detailed, month-by-month budget is important, and this budget must be regularly reviewed.
Understanding your financial statements will also help you answer questions from prospective investors. Here are some financial statement questions you can expect to get from investors:
9. Keep Your Investors Constantly Informed With Both Good and Bad News.
It’s good practice to keep your investors updated on a monthly basis via email. The updates don’t need to be incredibly detailed, but here are some general items you want to consider including in your updates:
You want to maintain great relationships and connections with your investors. And you don’t want them to be surprised when you need to go back to them for additional financing.
10. Get All Employees and Consultants to Sign a Confidentiality & Invention Assignment Agreement.
To make sure employees and consultants keep the company’s proprietary information confidential, the company should typically require them to sign a Confidentiality and Invention Assignment Agreement. This form deals with the confidentiality issues, but also provides that the ideas, work product, and inventions that the employee or consultant creates which are related to the company business belong to the company and not to the employee or consultant.
Venture capitalists and other investors in startups expect to see that employees and consultants have signed such agreements. In an M&A transaction where the company is sold, the acquirer’s due diligence team will also be looking for these agreements.
11. Market Your Business Like Crazy.
To succeed in business, you need to continually be attracting, building, and even educating your target market. Make sure your marketing strategy includes the following:
12. Use Consultants and Freelancers to Supplement Your Team.
At the early stages of your startup, you will likely want to have a small employee team to minimize expenses. A good way to fill in for specialized expertise is to use freelancers or consultants. That way, you avoid taking on employee costs and benefits payments. And there are a variety of sites that can help you access freelancers, such as Freelancer.com, Guru.com, and Upwork.com.
13. Make the Deal Clear With Co-Founders.
If you start your company with co-founders, you must agree early on about the details of your relationship. Not doing so can potentially cause enormous problems down the road (for example, see the Zuckerberg/Winklevoss Facebook litigation). In a way, think of the founder agreement as a form of “pre-nuptial agreement.” Here are the key deal terms your written founder agreement needs to address:
14. Get the Right Business Lawyer.
In a misguided effort to save on expenses, startup businesses often hire inexperienced legal counsel. Rather than spending the money necessary to hire competent legal counsel, founders will often hire lawyers who are friends, relatives, or others who offer large fee discounts. In doing so, the founders deny themselves the advice of experienced legal counsel who could potentially help them avoid many serious legal problems. Founders should consider interviewing several lawyers or law firms and determine if the lawyers or the law firms have expertise in some, if not all, of the following legal areas:
It is not necessary that the lawyer or law firm has experience in all of these areas, because certain problems can be “farmed out” to different specialized lawyers or firms. But it is often best that you retain a firm that can handle some, if not many, of the areas of expertise listed above so as to provide continuity between you and your legal counsel.
There are a number of ways to locate competent legal counsel:
15. Take Into Account Important Tax Issues.
When starting a business, there are some key tax issues to consider. Here are some of the most common:
A good accountant or tax lawyer familiar with these issues can be a valuable partner.
16. Do These Things Before Hiring an Employee.
Before hiring an employee, do the following:
17. Expect Big Challenges and Be Prepared for Them.
The biggest challenges to starting and growing a business include:
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