Millennials are creating more startups than any generation in history. Findings from the Global Entrepreneurship Center point to a figure of 133 million startups forming each year. Of those, somewhere in the region of 0.05% will reach the basic funding stage with just a tiny percentage making it to a VC round. Let’s face it; the odds are stacked against you. Having a solid idea is the starting point and growing from there takes a combination of luck, hard work, and technical expertise. Here are five elements that will set your business apart.
The Two P’s
If your startup can become profitable in the short term, you stand a chance. The business costs at the beginning may be nothing more than storage, packaging, and other utilities, but you will be surprised how these multiple suddenly. As the business grows you take on staff and increase your marketing expenditure, and before you know your small profit margin has evaporated. You double down and spend even more on marketing to get your brand out there. You are shocked when your bank manager calls you with the bad news. If at the beginning you cannot chart a course to profitability, forget about it.
So you have shipped your first package. Congratulations. Now, what’s to stop Joe Bloggs doing the same thing that you did? This leads us to the second P: protect-able. Entrance into the market needs to be difficult. Whether that is through regulations, the cost of market entry, patents, or the market share of existing players. Perhaps you have amazingly invented something or have a novel way of doing something, in this case, get a patent as soon as you possibly can.
Build the best team
You need the best talent to execute your ideas. That is easier said than done. The top people have high demands, and usually, that means a generous remuneration package. Having said that, if you hire ambitious young people there is potential to build a high performing team. Paying close attention to recent graduates who desperately need experience is the ticket to hiring at a low cost. If you can capture their imagination, you might have a chance to entice them to join. Millennials don’t just care about money, though, more than any previous generation what is important to them is that they are happy to come to work; whether that is because they feel connected to your mission or simply because your workplace has a buzz.
$15,000 from mom and dad, $200,000 from an angel investor, and with your fingers firmly crossed, that magic million from a venture capitalist (VC), is how you plan it in your mind. The reality may be something very different. It might be a case of getting multiple medium-term loans from the bank and other financial institutions. You will quickly learn who and when to ask for cash. In most countries, governments offer many support packages for startups; ranging from interest-free loans to once-off grants.