The vision for startups
Every startup begins with an idea but idea is NOT enough. Entrepreneurs need to have vision for their business. It means that the idea must be developed and formulated into a vision for the startup. A vision is something that you can share with others. If you cannot explain it in a clear and logical manner, how do you convince others to work with you?
A vision statement is a “Total picture of your company in the future”. It captures your idea, your inspirations, and your passions about what you want to do. Do not confuse a vision with a business plan; a vision does not tell you how to do it but only the direction for your startup.
First, you must identify the business that you want to do base on your idea. For example: Do you want to develop a product (i.e.., a mobile app, or a software to be used in a private company); or a service (i.e., software outsourcing services; cloud computing services); or consulting business (i.e., installation, integration, and training). Second, you need to know who could be your customers. For example: Who are willing to pay for your products or services? You may have several types of customers (i.e., Individuals, companies, government etc.). From these customers, who do you want to start with since you cannot approach every customer at the same time? You must determine who are the most important customers that you can sell your product or service now? Why do they want to buy from you and not others? What do you have that others do not? What kind of problems that you can solve and the other cannot? These are strategic questions that you must have answers because it will determine whether you are going to be successful or not.
Basically, the development of a vision forces you to have enough details about your idea. It includes all important factors that you must have when starting a business. Your vision also captures your dream and your hope for the future. Many entrepreneurs often hurry to start a company based only on the idea but never fully develop it into a vision with enough details to ensure the success. By having the vision, you can set the business goals on “what” you want to achieve before you determine “how” to implement it. By having all the details established, you can turn your vision into a reality.
The vision statement is the first step in the process to build startup. But it is still a guess based on your own idea. It does not have any value yet because it has not been validated, or has data to support it. The next step is to conduct market research to validate your vision.
The market research begins with the question: “How much could I make in this startup?” Should I start in the local market or national market? Or the global market? This step requires entrepreneur to investigate the business market to determine how much money he could get from customers; how much he could sell the product for; how much he could charge customers for his services. Before setting the price, entrepreneur must know if there is any competitor? How many of them? How much they are charging their customers. Today, with Internet, it is easy to conduct a market research because most companies have websites about their products and services, as well as their customers etc.
By understand the market demand; entrepreneurs can estimate income (Revenue, cost, profit etc.) that they need for their startups. By understand competitors, entrepreneurs can determine marketing methods they need to get customers; business process to keep customers, and how to increase number of customers as well as what kind of relationships they need to have with their customers. Only by having market details, they can validate their startup vision to determine whether they can achieve their business goals or not. These details also help them to modify the vision statement to make it more robust and consistent with the market demand.
Sources
- Blogs of Prof. John Vu, Carnegie Mellon University
