Nowadays, the theory of a concept is applicable everywhere. What is basically “an abstract idea” is also what helps many entrepreneurs to move forward with their plans and bring their ideas to reality.
There are concepts to everything.
From apps to business models, there are so many startup concepts that are followed by entrepreneurs and founders. However, just like every market and with every product or service, not every concept works all the time.
The core of a business concept is to obviously work and help you make decisions, solve problems and see your business succeed. From Elon Musk to Charlie Munger to Richard Branson, a lot of celebrities and famous founders follow concepts to make their brain more useful.
In fact, Charlie Munger once said that you have to have a collection of latticework or concepts in your head in order to make sense of the world around you. Building something new requires you to follow your gut, instincts – but also your main concept.
In the business landscape, there are thousands and thousands of concepts that people write about. However, instead of making it exhaustive and listing all of them – today we are reviewing the most vital ones that every entrepreneur or founder should be aware of.
1. Make most of your market research
The first theory or concept in our list revolves around the need for market research. Most of the times, founders lack the time or expertise to do market research – which shows off (as poorly) in their business plans and ideas.
The truth is, if you don’t have true and deep domain expertise in your space, you are probably struggling with surface and superficial insights. The goal, however, is to understand your market and how bad it wants your product.
2. Funding is not your target – money is
Startup founders should always know that getting funded is not the final destination. Essentially, there are many different ways of finding the money for your company. They could come from loans, re-mortgages etc.
However, what truly matters is to help clarify the different options. The best option, according to many, is to bootstrap your company until you have found your product/market fit. Only this way, your valuation can prosper.
3. Give yourself 24 months to get to a minimum sellable product
If you are struggling to see what’s the optimal timeframe for building a sellable product, you should know that twelve months (a year) is never enough to get to a great product – especially in the digital sphere. Similarly, eighteen months are rarely enough to succeed either.
According to experts, you have to budget 24 months in order to get to the first base, an MSP and any material revenue to begin with. If you cannot afford this – find a way.
4. The three aspects investors care for
Believe it or not, there are three core things that investors care for nowadays. The traction of your company, your team’s profile and the market that you are trying to dominate.
After the startup, you will likely pivot many times and end up with a totally different concept that the one you envisioned. What should not change during all of this is your market and your team. If it changes, your company will probably not survive.
Remember – traction, team and market.
5. Know when to pitch
Pitching your business idea to someone is not as easy as A-B-C. Especially when it comes to founders and startup owners. If you are that type, you need to know the exact phase in which an investor gets involved.
Be approachable, spread the word and always make sure to pitch when you have a product/market fit – instead of just a blurb or an idea.
6. Don’t hire staff too quickly (unless you are scaling rapidly)
More people are never the answer – especially not if your core business is not productive. So, it is only wise to hire when it feels like you are bursting at the seems or missing a critical skill in your existing team.
If you are scaling and expanding, hiring is okay. However, you should always know how to scale growth.
7. Don’t over-network
They say that networking is crucial when you are a founder, startup owner or entrepreneur. And while that is certainly true, networking relationships are only fine when done moderately. If you are addicted to being out of the office – that (or your employees) should definitely tell you something.
The best way to balance is simple – spend most of the time with your teams and only network when you have opportunities for it.
In the end, you should remember that starting (or growing) a business is supposed to be hard. Most of the times, it is really, really hard. If you haven’t done it before, know that being a founder is a hundred times harder than being a VP.
So, following the concepts listed above can help you seek the best advice, know when to scale and what to expect in each of the phases of your business or startup.
Our advice, however, is to get the best investors, best advisers, best team members and best mentors. In most of the cases, it is the people and their passion that can really accelerate your business and add value to it.