· Product, check.
· Team, check.
· Customer's first time, check.
· Repeat revenue, three-year plan, and business strategy for customers-loading...
When it has worn out the initial excitement of becoming a bootstrapped start-up working to address societal problems, it is time for the entrepreneur to answer some difficult questions - was the market defined? Are consumers prepared to welcome this new item? Is there a match for the product market?
For a start-up, it is never too early to plan out its go-to-market strategy. Strategy, practices, turnover, profits-for start-ups with fast-growing social effect, buzzwords historically associated with large corporations and consulting companies are equally relevant.
Where to Begin?
Start-ups begin their (ad)venture universally, addressing a perceived void in the market. Start-ups with social effect have optimistic goal statements to enrich billions of lives. A lack of foresight about how start-ups can scale, however can contribute to mission drift. First of all, start-ups need to develop a deep understanding of the market, put their product on the market, and iterate on growth strategies. When a start-up with repeat customers has reached a positive cash flow, it can concentrate on developing technology and chasing market share.
If a start-up does not get the formula right the first time around, is it game over? It's time to pivot - either the product can be adapted by another sector for use, or it can solve a latent need for a different segment of customers.
The Customer vs End-user Conundrum
How do start-ups identify the value proposition for all parties when the client is different from the ultimate consumer? For example, state government schemes may buy water pumps en masse at low or no cost to smallholder farmers for distribution, but the purchasing department and the ultimate farmer may differ on what makes a "efficient" water pump.
An exercise in market sizing will help see the market is greater for the two porous consumer segments-the customer or the ultimate customer-and identify the costs needed to meet it. Concentrating on key cost efficiency competencies helps to destroy business imperfections.
For young start-ups, the availability of funding will determine when and how start-ups scale up with undefined goods and markets. Start-ups in the growth process need to be mindful of the available resources in order to prevent failure fueled by uncontrolled cash burn. Income and profitability, two fundamental truths of good business models, should be the priority of social enterprises. Also e-commerce behemoths are required by their investors to produce turnover and income, if not profits.
Early-stage financing availability may create or break a start-up, especially one with proprietary hardware technology that needs several prototypes. Access to equipment and testing labs will take start-ups a long way on their lab-to-market path through the thriving Technology Business Incubator ecosystem.
Partnerships for Promotion
In a rural/semi-urban sector, collaborating with a company that has already made inroads and developed distribution networks may seem like an easy solution for any new entrant. This might, however, expose the start-up to the partner organization's inefficiencies, which might not be financially or philosophically incentivized, to place the start-goals up's on a par with their own. It is important to weigh the costs and advantages of mobilising the start-own up's sales force.
Scaling up does not necessarily mean that operations are multiplied by a factor of ten. It means being aware of additional economic costs that complement growth and the maturation of a company: working capital, production, sales, operation. Scaling up often involves a change from human-resource-oriented approaches to autonomous operations procedures and processes. Such processes should remain true to the ethos and purpose of the start-up.
It must continually reinforce its choices as the start-up grows, as it moves smoothly from concept to venture to market. Consumer thought and value proposition helps to create clarity around customer strategy, synergetic relationships and roadmaps for goods.