We’ve all heard stories about major companies starting from nothing, like the founding of Facebook in Harvard, or the founding of Apple in a garage. But how does a good idea go on to become a great idea?
Well, there are a few steps in between the garage phase and the multinational company phase. For one thing, founders need capital to build a prototype product in the first place.
If you believe in an idea, then you will want to see it go as far as possible. Not all great ideas work out, but it only takes one to change everything.
The success of the Angry Birds app is a case in point. The founders made over 50 failed apps before Angry Birds came along.
So, what do examples like these teach us about startup success and where it comes from? The venture capitalists at Think10 weigh in.
1. Learn How to Recognise a Good Idea
There’s a lot of literature out there about how to recognise a good idea, but at its heart, it all comes down to having a covetable product with a point of difference.
At Think10 we say over and over that it’s not about reinventing the wheel. McDonalds didn’t invent the hamburger. Mitchell and Ness didn’t invent the jersey. Apple didn’t create the first PC. It’s your twist on an idea that matters.
But is it a good twist? Your gut has to say yes before you submit your idea against measurable tests.
Beta testing is a startups best friend, as it can help you both refine and recognise a brilliant idea.
2. Find Capital and Use it Wisely
In order to build a prototype, you need capital. In some cases, this will come from your savings or fundraising efforts, but when developing a complex product, savings or fundraising can only get you so far.
This is where venture capital or seed funding comes in, to provide you with the capital to develop and refine your idea and test out the prototype.
Beyond this, venture capital is used to get your fledgling businesses over those initial hurdles and cover key expenditures like staff hires, manufacturing and office space.
The key is to use capital wisely. Venture capital should form part of a structured development program or mentoring scheme that helps you use funds in a constructive way.
Apple put their savings into their prototypes. LinkedIn founder, Reid Hoffman, made use of his existing contacts to make slow but steady gains.
Using funds and resources wisely is nearly always part of the story of startup success.
3. Learn from Experience…or Borrow Someone Else’s
Back to Angry Birds. The founders of Angry Birds had more than 50 apps under their belt before they hit the big time. By then, they had nailed the app building process and refined their best ideas down into one addictively fun game.
Want more examples? WhatsApp came from colleagues in Yahoo. Instagram started out as an app called Burbn – before it shook off its note-sharing emphasis and became the photo sharing platform we know today.
Even where founders had no prior experience on paper, you’ll often find they were inventors long before their prize invention came along.
But if you don’t have any prior startup experience, don’t let that stop you.
Within the scope of seed funding and venture capital, you have the opportunity to access the minds of those who have gone before you. You don’t have to just learn from your mistakes; you can learn from others’.
The Keys to Success
Think10 partners promising entrepreneurs with capital and co-investment opportunities, established business networks and valuable mentoring opportunities. Talk to us today to make the first step.