LaunchPad Insights: How to take your idea on an adventure this semester

At the beginning of each semester, we love meeting students who have new ideas and want help getting started.  “Where do I begin?” is a common question.  There is no straight path to launching a startup.  It is a process of discovery along the way, which makes it both fun and challenging. For those who take the journey, it’s like no other adventure.  Like any road trip, you need a good map.  We’ve created one just for you. It’s called “The 30 Steps to Success” and here’s your ticket to ride.

Planning for the trip:

Just like any road trip, read up and do some research on where you’re going.  It helps give you the lay of the landscape, prepares you for what to look out for, where to find help and how to get information along the way.  Think of this first part as stopping at the visitor’s center.  Talk to some helpful local guides to get you started.  Bookmark some resources so you’ll have them handy as you journey through uncharted territory. 

Take these simple steps to get you ready for the trip:

• Join the LaunchPad.
• Request a peer mentor to work with you.
• Stay up to date on opportunities @LaunchPadSYR by following these links:
  • Instagram
  • Linked In
• Look over our website.
• Check out our LaunchPad Toolkit, which can help you bring your idea to life.  You’ll find easy to use worksheets and checklists to guide you on your journey from concept to market, and great tools to help you pitch and raise funds for your idea.
• Check out the Techstars Toolkit, an online educational resource with the fundamentals of entrepreneurship to accelerate success.
• Bookmark your calendar to hear great speakers and participate in events where you can win money for your idea! Our events calendar is here.
• Make an appointment with the LaunchPad team to get you ready for the journey.

Get started on the trip:

• See the problem.  Is this really a problem that needs to be solved? Is this a problem worth solving?  Who else besides you cares? Have you jumped to creating a solution without really understanding the problem?
• Find solutions.  Does your solution make sense?  Be brutally honest. Have you tested all the assumptions behind the solution you are contemplating? Do you really know there is a market for this?  Do you know that customers be willing to pay for it? Could you make enough money with this idea to pay yourself and others a salary?
• Do customer discovery and research.  Talk to as many people as you can who represent your target audience.  It’s important that your research is not simply friends who will happily validate your idea.  Talk to people you don’t know.  Conduct surveys.  Get on affinity groups and post questions.  Reach out to people beyond your personal networks.  Visit the SU Library entrepreneurship research librarian to dig into industry trends and market size.  Understand the competitive landscape and who else is solving this problem.  This research is critical to validating your idea and helping you understand your value proposition.
• Create a business model canvas.  Start work on your business model canvas. Use a whiteboard, or some worksheets to sketch out your business.  Start building a volunteer team of people who share your passion to brainstorm with you.  Ask a LaunchPad peer mentor to help you with this part.  Techstars has a great learning module on the lean canvas and there are plenty of other free on-line tools such as Business Models, Inc. and more. Here is a downloadable version from Canvanizer that can help you scope out:
  • Key partners
  • Key activities
  • Value proposition
  • Customer relationships
  • Customer segments
  • Key resources
  • Distribution channel
  • Cost structure
  • Revenue streams
• Develop an executive summary.  Write a one-page description of your business idea.  This will help you to think about the details of your business. You’ll need this to apply to business plan competitions and to share as you recruit team members, mentors and subject matter experts. Here is a link to the LaunchPad’s Executive Summary template which we think is a handy way to organize your idea.
• Name your idea and start building your brand.  Create a name for your idea.  Conduct a trademark search, and a domain, website and URL search to be sure they are available.  You don’t want to establish a brand, only to find out that it has been taken, or that it will be costly or impossible to buy back the domain name or URL.  Develop a simple logo (check our LaunchPad free resources page to look for logo generator tools you can use).  Start building your brand identity by setting up social media accounts.  It’s never too early to start building a following for your idea and establishing yourself as a thought leader.  Early traction will help you attract team members and will be invaluable for early investors in your idea.
• Protect your name.  Consider registering a “Doing Business As” DBA Name after you have done a corporate name search.  It signals your intent to build a business, and is simple and inexpensive.  You can do this before you legally incorporate.  It can help make your idea real. 
• Start building a team.  Find people who share your passion and who will be willing to devote volunteer time to what you are building.  Think about the skills sets you need to complement your own expertise.  Early team members will come on board because they recognize the intrinsic value of building together.  They will not come in requesting equity or C-suite titles.  They will join because they want to be on this journey with you.  They will be your most loyal assets.  Agree on goals. Discuss roles.  What skills will they contribute?  How can they help you build something to test?  As you work together over time, the team synergy will start to become apparent.  At that point, you can start thinking about formal roles and potential compensation as you begin to monetize and raise funds.  Don’t give away equity or key titles too early.  These are common mistakes by young startups, and they become very costly to untangle down the road.
• Build an advisory group. This is not a legal board, but people with the subject matter expertise, industry skill sets, and experience you need to create your venture.  Invite them to become advisors and mentors.  Use them wisely.  They will become more important to you than you can imagine.
• Get professional help. Build your BAIL team (Banker, Accountant, Insurance, and Legal professional service providers).  While you are student, take advantage of pro bono attorneys and CPAs who are willing to advise student startups.
• Take advantage of ecosystem resources.  Understand all of the research resources, databases and tools offered by SU Libraries.  Demonstrating that you have done this important work will make you much more compelling when you pitch your idea for funding.  Make appointments to get personalized help with all of this by sending an e-mail to launchpad@syr.edu
• Consider if idea needs protection. Do you need a patent to protect your intellectual property? Do you need to copyright your work, or trademark your brand name, logo symbol, and tagline?  Should you protect confidential information through a trade secret?  Start by doing a patent search of what is out there to be sure you are not infringing on another business to ensure that your solution is unique.  Make an appointment with the Innovation Law Center at SU, which hosts regular office hours at the LaunchPad by sending an e-mail to launchpad@syr.edu.
• Start building.  Ideas are just ideas until you execute on them.  While you are working through the steps above, your team should get to work building something to start testing.  Your goal is an iterative build process, based on UX design principles.  Whether it is a product, service or technology, there are basically five stages you will need to work through:
  • Proof of concept (POC):  These can be as simple as design sketches, wire frames, flow charts, or simple visual renderings.  Just get started and start testing it with people.
  • Minimally Viable Product (MVP):  Build out one piece of it that actually works.  It doesn’t need to be complete or perfect, and you can even represent some aspect of its functionality without fully building it out.  It’s essentially a working prototype that you can try out and test.  It will quickly help you discover what users think and how they use it.  And it will help you figure out how to design a more robust version in the most efficient way.
  • Alpha release:  This is an advanced variation on your MVP, but fully testable.  This is not a public release.  Share it with test users who will give you honest and frank feedback.  It will help define your beta release.  You want to work all the road bumps out before a public release.
  • Beta release:  This is a more advanced version of your alpha release.  It is a semi-public, usually by invite only or by early signups of enthusiasts who want to part of a first user group.  It’s the final step to finalize your launch-ready app where you will lock down your product features and stop iterating. The product should be stable by now and working as promised.
  • Launch ready release:  This is what you have been working toward.  It’s time for the full public rollout.
• Pitch at business plan competitions. You are going to need funding to get through the five steps of product development.  Start pitching your idea at the POC and MVP stage to raise early non-dilutive funding.  Work with the LaunchPad to learn how to identify your real value proposition, and how to craft a compelling pitch.  There is an art and science to this.  Practice it.  Then, start pitching.  Iterate with feedback.  Follow the LaunchPad to learn about campus, regional, state, national and global competitions.  Pitch at every chance you get.
• Incorporate a business and raise funds.  As you get to the alpha, beta and launch phase, you will need to start raising external capital and perhaps even close some first sales.  At this point, you need to form a legal entity.  It’s important to determine what kind is right for you because that is a strategy decision about how you will fund your idea, how your will raise funds, and what your ownership and governance structure will be like.  Will you be a Sole Proprietorship, Partnership, LLC, LLP, C-Corp, or S-Corp. B-Corp or Nonprofit? It is essential to engage a paid attorney and accountant because all of these decisions also have tax implications.  Do not make this decision yourself.  Most importantly, do not engage in DIY legal by downloading boilerplate templates and filing online.  Work with professionals.  This is worth repeating.  Do not do this yourself.  Hire a professional because it is essential that you are set up properly.
• Create company documents.  This is getting real now. Get professional help from an attorney to draft internal documents for the business. These include by-laws, founders agreements, operating agreements, policies, confidentiality or non-disclosure agreements, and perhaps even do not compete agreements.  Now you are protecting the business over team members who will eventually come and go (because that is the nature of life and business.)  When you start publicly pitching your idea, be judicious about how you disclose.  If you are contracting out work, consider mutual NDA agreements if needed.  Be aware that many people you speak with may not be willing to sign an NDA. Before you have your idea protected, use common sense and caution about what you share, and with whom, and in what context.  Talk about “what” you are doing, but the not the details or “secret sauce” of “how” are doing it.  If team members are building it, be sure that the business owns the work, not the individual and that the business has access to all code that is created.  You want to avoid the situation of “people” owning and controlling the assets that have been created.  Those assets belong to the “company” now.  Be sure the company has possession of them.
• Get your financial house in order.  Open a business banking bank account and obtain an EIN. You will need an EIN for payments and tax filings. It will also be required for opening business checking accounts and establishing accounts with vendors.  Consult with an accountant to do this correctly, and how to set up bookkeeping, accounting, and mandatory tax reporting.
• Prepare for taxes.  Be thinking ahead about tax obligations to avoid surprises down the road.  Register for state and local taxes and get a TIN (tax identification number). Know when you need to buy workers compensation, unemployment and disability insurance, and when you need to buy a general business/commercial liability policy.  Plan ahead for what you will owe in taxes, and know when they are due so you avoid penalties.  Consult with an accountant, insurance broker, and HR subject matter expert.
• Set up good bookkeeping.  Establish proper accounting procedures. Learn what GAAP is. Get a business credit card.  Hire someone to set up bookkeeping, payroll, and other back-end office functions.  Many accounting firms will do this for startups.  Consider a fractional CFO relationship with a professional bookkeeping or accounting firm.  The LaunchPad can help connect you to professional resources or find an accountant in the community where you will be doing business.  At this point, having an accountant to guide you on the journey is essential.
• Know the rules of the road.  If you are operating in a regulatory environment, understand potential business licensing and permit requirements.  If you are in a highly regulated health or safety sector, understand what is required for FDA compliance, independent third-party testing and certification (UL or ETL, etc.) or other consumer product safety regulations.  If you are developing software, understand privacy and cyber-security requirements.  Hire a consultant, if needed, to help you navigate these complex landscapes.
• Figure out your startup capital needs.  Focus on what you will need to fully build and launch.  Then plan ahead for your “burn rate.”  Understand when you will expect to hit sales, at what you will break even, and what your cash “burn” rate looks like so you stay solvent.  Create a funding roadmap, with sources and uses – all tied to key product development and sales milestones.  Review this frequently.
• Know your cost structure.  Start with the expense side of the ledger.  Get real price quotes.  Don’t guess. Build a trusted supply chain and work with reputable partners.  Plan on the side of error.  It will always cost more than you think, especially if you are building a product.  Hardware is hard.  Software has more bugs than you think. Plan for it. 
• Get ready to sell.  Think hard about every way you can make revenue at this venture.  Explore multi-sales and distribution channels.  Think about the marketing and sales team you are developing to launch.  Create a carefully crafted marketing plan.  Social media is not a strategy.  It is just a tool.  Developing your brand is not the same as developing your business.  Understand the difference.  While you step up your brand identity, create a robust website along with your social media presence.   Develop business collateral and sales materials.  Write blog posts.  Establish yourself as a presence in the space you are looking to enter.  As you build interest that will lead to customer demand, be sure you are integrating best sales practices into what you are doing.  Bring on a SEO and SEM expert.  Be absolutely serious about a marketing strategy to drive sales or you will have done all this work and taken such a long journey only to come to a stop in the road.
• Develop and secure your IT platform.  As you are getting ready to sell, particularly if you are selling directly online to consumers, investigate the best platforms to utilize to assure efficiency, reliability and security.  Think about how you will handle logistics and customer service.  Review best options:  build it yourself or work with a third-party vendor who can handle transactions for you.  Assess the pros and cons and costs of both approaches.
• Understand how you customers make purchase decisions.  If you are selling wholesale or retail, learn who makes decisions and what factors into those decisions.  What are margins for each channel?   If you are selling through a dealer or distributor, understand how that pricing structure typically works in your industry.
• Develop a detailed sales and business development plan.  Social media is not a sales plan.  You need a solid business development plan that involves building prospect lists, sales calls, engagement and customer relationship management.  You and “what army” will bring this to market?  Where?  How?  Through what channels?  Identify a few first beta users, and get your first MVP out.  Iterate from customer feedback.  But start building an experienced and motivated sales team now.  Explore CRM models.  Learn all you can about effective sales strategy.
• Attract investors.  Now that you have first key customers, get serious about attracting equity investors to help you launch and scale.  Understand what you need to be considered “investment ready.”  Read the LaunchPad’s toolkit to understand what goes into an “Investment Ready Checklist.”  Start working on it and checking off the boxes for your venture.
• While you raise money, keep chasing sales.  Sales are always the most capital efficient way to grow.  Build a wait list to demonstrate market interest.  Then close sales and scale.  Be ready to grow your team and add capacity if your idea blows up, and there is consumer demand.  Focus on sales as much, or even more than chasing venture capital.  Understand that investors are keenly focused customer acquisition and traction in the market.  It drives investment decisions.
• Be ready to pivot.  Be ready to re-trench and re-think when you discover something isn’t working.  It’s a journey.  You will take detours and wrong turns.  Sometimes you’ll need to take a short rest stop.  You will hit road bumps.  You’ll drive blind into a blizzard.  It’s okay.  Keep your hands on the wheel, and keep focused on the road ahead.
• Keep at it.  In the end, entrepreneurship is about the hustle, bootstrapping, resilience and grit – as much as the vision and passion.  If you have the drive and determination, you’ll reach your destination. If it turns out to be a different place than what you originally imagined, that’s okay too. The best entrepreneurs know that taking detours, and making changes along the way are part of the road. It’s about getting there in the end, and what you discover along the way. And the trip will be so worth it, especially if you keeping learning and remember to have fun on the journey. 

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