In the last 2 years we've helped kick off 11 startups, 6 of which have raised funding, 7 of which are generating revenue, and 2 of which are profitable (amazing!). I want to share how our founders are doing it.
If you've read around this website, you may know DQventures's focus: to support working professionals who would dearly love to launch their own venture but can't escape the need to earn a salary.
You perhaps won't know that we started off with the goal of launching 50 companies, but that quickly became 100.
Now that we've started 11, we think we can do thousands.
But still, that's barely scratching the surface of what's possible...
- How many potential founders are out there?
- How many professionals go to work every day wishing they could start their own business?
- How many great ideas are there not being worked on?
We think there are millions...
So we've been asking ourselves, "how do we make a dent?"
Right now, the best we can come up with is to keep sharing, as transparently as possible, everything we do.
No matter how many startups we can actively help as co-founders, our hope is that we can help thousands more people de-risk their entrepreneurial journeys, leading to more great businesses, more freedom for the people that run them, and more innovation for the rest of us to benefit from.
It may sound lofty, but that's the goal.
So for starters, here's a summary of how we go about helping our DQ portfolio companies to get started...
How to launch a startup in 15 steps
Here's a basic outline of how we think about launching startups, which is broken down into four sections. We hope it can help you de-risk your own entrepreneurial journey:
Step 1: Fall in love with the problem, not the solution.
Most of our founders are at idea-stage. Many don't have a deck or business plan. We ask them to complete a "lean canvas" to map out the problem, solution, distribution and other core elements of the business.
Step 2: Ask "why is this problem worth solving?"
How big is this problem? Why will someone pay to solve it? How much will they pay? How are people solving this currently (not just with technology)? Finally, why don't existing solutions cut the mustard?
Step 3: Identify jobs-to-be-done and ideal customer profile.
There are different ways to think about users, but we like a combination of personas or "ideal customer profile" (ICP) and jobs-to-be-done (if you haven't read Clayton Christensen's book, "Competing Against Luck" we couldn't recommend it more highly.
Here's what to think about: who suffers most from the problem you've identified? What job are they trying to get done? How will they overcome the inertia of adopting and paying for a new tool or solution?
Step 4: Focus on distribution before product.
If there is one factor that separates successful startups from unsuccessful ones, it's distribution, A.K.A. sales. How are you going to get your solution out there? How do you know this will work? What's your unique insight or advantage that will enable you to do this?
Step 5: Get out there and talk to people.
This is the part many founders skip. (Perhaps they're reluctant to share their idea before it's "ready" or afraid of being told it won't work.) Don't skip this.
Talk to between 30 and 50 people who match your ICP. Don't ask leading questions. Learn how they behave and experience the problem. More user interview tips here.
Step 6: Define a business objective and what's needed to get there.
Once you're sure this problem is worth solving, you need a plan. What's the goal? Validation? First revenue? Covering overheads? Paying a salary? Hiring a team? Raising money? Define what you need to produce (products, proof, revenue, etc) and what metrics to track.
Step 7: Map out the first few months of operation.
How much time do you have for this and what resources are available? Can you keep working? Can you supplement your income another way? How can you cut corners or automate? Who else can help and how?
Step 8: Define how to capitalise the business.
How will you cover initial costs? Self-fund? Raise from friends and family? Get sponsored by your employer? Access non-dilutive capital?
Is there room for a blended model, where you can earn-as-you-learn, perhaps by selling a service, like consulting or something else?
Step 9: Create your story: either for raising money or for sales.
If you need capital to get started, forget VCs. It's all about you, your story and your network. You have no traction so raise small from friends and family, based on reputation and narrative. This will be core to your initial sales pitch too.
Step 10: Advance user interviews into a sales pipeline.
Never stop interviewing potential customers. Capture names and email addresses of people who match your ICP. Write to them, interview them, involve them, make them "advisors". These are likely to be your first customers, so keep notes.
Step 11: Build out awareness, audience and community.
How do you reach more ICPs? Where do they hang out, what problems do they have, and what questions can you help them answer?
This is your content strategy. Be helpful. Post on social media. Contribute to online forums, groups and media publications.
Step 12: Define and build towards "minimum viable traction".
We think less about product and more about traction: how do we get to revenue? The goal is proof and momentum. It could be registrations, pre-sales, signing LOIs, building clickable demos, an MVP or a waitlist, but it has to lead to income.
Step 13: Start building an investor community.
Connect with investors who engage with you online or are active in your space. Ask if you can add them to your email list, keep them updated and invite feedback. These are the people you'll start with if you decide to raise capital.
Step 14: Create a deck, business plan, investor list and data room.
Raising a funding round is a full-time job, so work out how you can keep the business moving while you're raising.
Build relationships but also build a list. Don't be afraid to reach out cold. Fundraising is sales - it's a numbers game that relies on a good hook.
Step 15: Find your first investor then close quickly.
Be ready with documents and data room. Meanwhile, keep talking to customers and keep building momentum. Funding can take >6 months, if it happens at all. Plan to bootstrap and think of funding as an accelerant.
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P.S. I've tried to keep this digestible and not too long, so I hope it's useful. Let me know if I've missed something. I'm easy to find on LinkedIn.
Featured image: Midjourney