When Sarah Prevette founded Upinion, her first startup company, she admits that she “got caught up” in what she thought was an amazing idea: a pop culture opinion-sharing website for teens. “I thought it was going to be the next big thing,” she says. “I thought people would just flock to it, and that certainly wasn’t the case.”
When you’re excited about your venture and want to hit the ground running, it’s often hard to slow down and analyze your business model. But as Prevette—now on to her second startup venture—and other entrepreneurs will tell you, an innovative concept is only the first step to startup success. The process of strategic planning is what distinguishes a great idea from a sound and sustainable business.
Do Your Research
Extensive research into your business, market, and opportunities for clients, investors, and success is essential. “It amazes me how many people get an idea for a business and then go hog wild without doing any research to see whether or not it’s viable,” says Maren Kate, founder of Escaping the 9 to 5. “A year later they’ll be $50k in debt and crying about it on a forum, saying that starting a business doesn’t work and is only for ‘lucky’ people. [But] luck has nothing to do with it. Success depends on your savvy and your diligence – doing your research encompasses both areas.”
A key component of the research process is to get feedback—a lot of it—early on. “Everyone has a tendency to guard their ideas, but it’s such a wrong intuition,” explains Prevette. “You need to get out there and find people to give you insight and feedback and constantly evolve your idea right from the get go.”
Solve a Need
Whether you’re looking to create an online community or a cupcake shop, make sure that your company will address an unmet need in the marketplace. “A lot of tech startups aren’t answering a need, they’re just being built because it seems cool,” says Prevette. “I think the difference between those [businesses] that will succeed and those that will fail is the ones that are providing a truly valuable service.”
Sprouter, for example, grew out of a need Prevette recognized through her personal experience: not being able to get advice from fellow business owners. As a young entrepreneur, she wanted to connect and interact with her peers and experts in the field. Her online platform became the solution to that void.
A similar idea applies for more traditional businesses, such as consulting or graphic design firms. There may be dozens of companies doing the same thing in the same area, so in order to succeed, you must distinguish yourself in the marketplace.
Nicole Myden, founder of NMPR, a boutique public relations firm in Los Angeles, is one of countless agencies in the area. “A few years ago, there was this trend of people starting their own companies, and it got very competitive,” she says. “I knew that the way I was going to stay successful as a small boutique company in L.A. was to create a niche.”
Her company focuses on local boutiques, spas, and salons that are starting up or promoting new products or events. By narrowing in on her client base and her services, she has become the go-to agency in the area for L.A. lifestyle and beauty clients.
If you’re ready to run with your idea, the research process might seem daunting. But don’t be afraid to start small, recommends Morgan First, co-founder of online wine community Second Glass.“People think you have to quit your job and immediately have this huge following.” She advises aspiring entrepreneurs to take small steps in the right direction while testing the feasibility of an idea. For example, “start with a blog you can do while you’re still at your current job…and you start building your following and learning your voice.” You’re then better prepared to shift that into the next phase.