If you need to choose an IT company to develop an MVP, read our article – how to choose a software development company to not lose money.

1. The Supervisory Board is a must-have

For startups that are engaged in complex technology products, the creation of an advisory board is a must before going to a venture capitalist. If your application for processing medal analyzes or software for the development of geological deposits was created without the advice of specialized scientists (preferably from some Stanford or Berkeley), you simply will not be taken seriously.

2. Start testing hypotheses with money as early as possible

The user must vote for your hypothesis with a ruble – otherwise, it costs nothing.

Practice shows that a startup can overestimate demand up to 10 times. Therefore, it is better to test hypotheses in the only correct way – by selling. If a product is paid for, it means that there is a market and demand – there will be something to show the investor. Everything else is nothing more than fantasy.

3. Test the value proposition before the product appears

It seems that all startups have already learned that it is unnecessary and even harmful to finish a product to perfection before launching it on the market – it is enough to make an MVP and start testing demand.

But you can go even further: start testing value proposition hypotheses even before creating a product. This way you will save money on MVP development, which, in the event of a misconception about the value of the product for users, can go to the trash heap immediately after entering the market.

4. Make a Normal Financial Model

Some foundations ask you to provide them with a P&L (table of projected income and expenses) in a prescribed format. This will make it easier for their analysts to work with the data. Find out if the funds you are going to have such requirements and do P&L in the right format – this will immediately add points to you.

But most often the startup owner himself is engaged in the financial model – here they can fully reveal their creative potential. If the team does not have a single economist or financier, it is worth involving an expert in venture financing in the compilation or verification of P&L (this area has its own nuances).

5. Constantly look for a business model

Aspiring startups sometimes confuse financial and business models. Yes, these are interrelated, but still fundamentally different things.

The financial model is income and expense streams. How much will you sell the product for in the first month? In general, a financial model is a business in numbers.

And the business model is how you make money with the value proposition.

Сonclusions

Your main task is to twist your business model in different directions in order to understand in what form it is most stable and scalable. Many people forget the definition of a startup – it is a temporary venture created to find an effective business model. Once such a model is found, the startup turns into a regular business, whose task is to grow, develop and bring money to founders and investors.