Ready to launch your business? Not sure where to begin? Connecticut inventor, entrepreneur, and angel investor Eric Knight provides a step-by-step guide.
Most ambitious entrepreneurs know the reality: Nine out of 10 startups fail. To increase odds of success, some fundamental steps must be done.
“Anyone can start a business,” says Eric. “My goal is to coach you to the highest likelihood of success.”
Eric has years of experience working with hundreds of startups—many of which don’t know where to begin. Innovation Destination Hartford asked him for some tips.
STEP 1: READ AND STRATEGIZE
Every entrepreneur needs to read The Lean Startup. “If you’re not willing to read this book, you shouldn’t be an entrepreneur,” emphasizes Eric. The book lays out key processes and strategies. You’ll learn that everything is customer-centric—and you’ll realize the importance of having the customer be actively engaged in the development of your product or service.
Eric also tells the entrepreneurs he advises to utilize a Business Model Canvas as opposed to business plan. “People get bogged down in the details they think belong in a business plan,” he notes. “With the Business Model Canvas, it’s one sheet of paper and nine boxes. Google it. It couldn’t be easier.”
Universal homework: Read The Lean Startup and complete a Business Model Canvas.
STEP 2: KNOW YOUR MARKET
As an aspiring entrepreneur, you really need to look at your market.
“For some reason, a lot of people skip this step. Everyone wants to start by building a website and getting a logo,” notes Eric. “But you can’t build a house before you have the blueprint. The key is to future-proof your business by building it right.”
Market research is critical. Find out if what you’re doing or hasn’t been done before.
“Make sure the market truly desires your product or service—and, more importantly, make sure they are willing to open their wallets and buy it,” Eric says. “Everyone may want what you’re offering, but will they pay for it? This question is fundamentally lacking,” he underscores.
“It’s important to bridge the gap—you need to make sure you have a product or service people want and will pay for. And then you need to make sure there is a large and sustainable margin so your business will thrive,” Eric explains.
STEP 3: CREATE A BRAND NAME
We live in a brand-centric society. It’s essential to know if your brand will resonate with people. The key to finding out? Brand brainstorming sessions.
Eric recommends brainstorming with people who understand your product or service. His plan of action involves pizza, beverages, and Post-its. He advises that you discuss the top three benefits of your product or service then ask everyone to spend an hour using the Post-its to free associate and jot down company names.
“Let everyone know no idea is a bad idea,” says Eric. “The goal is to fill the walls of the room with as many ideas as you can. In an hour, aim to have 1,000 names.”
His next step is to check off the group’s top 50 names and then check domain name availability. The requirements:
- The URL must end with .com (not .org, .net, etc.)
- Must be spelled how it sounds
- No hyphen can be used in the spelling
Next, whittle down your list to 10 to 15 potential dot-com-available names and then talk to your target market to see what they like. You’ve established a potential brand and you can use the market to test it.
“One of the most important steps at this stage is having a lean philosophy of building a business,” says Eric. “Remember, the overall theme is to reduce the odds of your business failing.”
STEP 4: MAKE IT VIRTUALLY
If you’re creating a product, you may need to build a prototype or a sample people can experience. For example, if you’re building an app, make screenshots and display the app’s flow in a PowerPoint. If you’re creating a product, have a 3D rendering done.
“The key is to not to spend, but to validate and iterate what you’re doing,” emphasizes Eric. “Don’t spend money until you validate. Then use Lean Startup strategies to show your product to your target audience and get feedback.”
Again, the goal is to future-proof with no cost and the least amount of risk. When you’re starting out, you need to stay lean and no-cost for as long as possible. At this point, you’re using tools to test your product or service with your target market and refine it based on their feedback.
STEP 5: MAKE IT REAL
Once you’ve created and tested your prototype, the next steps include forming a company, creating a sample website, ad testing, and performing trials and demos of your product. You need to make it real.
Even if you’re a one-person enterprise (solopreneur), there are very real and important reasons to incorporate—particularly to help separate your business activities from your personal assets. The methods and strategies for doing such are beyond the scope of this article.
Seek a business attorney who specializes in the unique needs of startups. Start at one of the many business startup support organizations around Connecticut.
Some great resources include:
- Connecticut Department of Economic and Community Development (DECD)
- Connecticut Small Business Development Center (SBDC)
- University of Hartford Entrepreneurial Center
In addition, the MetroHartford Alliance provides a comprehensive Directory of Connecticut Accelerators, Incubators, and Co-Working Spaces.
Once you’ve done some research, you can take some steps toward developing your product or service.
If you’re providing a service, it can be tested easily with pop-ups. “You don’t have to sign a lease,” Eric explains. “For instance, if you’re thinking about opening a new pizza place, find somewhere that would love to sell your product but doesn’t have the facility. Then, you can test your pizza and split the revenue. The same concept goes for a car wash. Align yourself with someone who already has the space and you can test your business concept.”
If you’re creating a product, you will need to find a company to make your product in low-volume/small-scale production. You may need a software developer or, if you’re creating a physical product, you may need to collaborate with a manufacturer. Take advantage of the many 3D printing/additive manufacturing resources available here in Connecticut.
Useful resources include:
- ACT 3D Equipment & Services — learn more in our feature story: Connecticut 3D Printing Supplier Talks Innovation, Technology & Collaboration
- Connecticut Center for Advanced Technology (CCAT) Advanced Manufacturing Center
- Stanley Black & Decker Advanced Manufacturing Center
- Stanley+Techstars Additive Manufacturing Accelerator — Learn more about applying to the accelerator
A simple online search for “Connecticut additive manufacturing” or “Connecticut 3D printing” will bring up dozens of resources with manufacturing capabilities in plastic, metal, ceramic, and advanced materials. Many of these Connecticut resources will provide low-cost prototyping and small-run production.
At this point, you’re staying nimble. You’re still iterating, but you still haven’t spent much money.
Bear in mind that it may cost more to create low volumes of your product; however, you’re better off not making as much now—ensuring you don’t have inventory you can’t sell. The goal at this stage is breaking even.
STEP 6: SCALE
Once you know people are buying your product or service, you can scale to bring costs down. That will enable you to increase your margin.
Many manufacturers and software developers in Connecticut will be more than happy to help you scale your product offering.
The Connecticut Technology Council (CTC) is a great resource for discovering top-notch Connecticut manufacturers. This statewide trade association provides wide-ranging resources that assist Connecticut manufacturers in their business missions.
And of particular note for startups, the CTC helps companies find and connect with expert manufacturers, software developers, funding sources, and a variety of other professional development services. To streamline the connection process, the CTC provides a Member Directory Search tool.
The Connecticut Center for Advanced Technology (CCAT) is another useful resource. Headquartered in East Hartford, CT, the nonprofit organization creates and implements innovative ideas for applied technologies, energy solutions, STEM education, career development and export and cyber compliance. CCAT also has an Advanced Manufacturing Center with state-of-the-art equipment. The team provides customized manufacturing solutions including prove-out prior to transitioning to production and on-site implementation support.
For service businesses, apply contemporary marketing techniques—particularly targeted online marketing—to rapidly ramp up your clientele. Search online for “Connecticut digital marketing agencies” for an excellent selection of firms—both large and small—that can help your business grow.
STEP 7: CONTINUOUS ITERATION
“Don’t rest on your laurels—even if you’re making money and growing,” warns Eric. “Smart companies are always listening. Be attuned to your market; it will give you ideas for new products and services to grow your business. The key is to listen.”
Paying attention to your market’s needs and continuously iterating will help you create ideas for new, profitable products and/or services. Continue to use the Lean Startup methodology to iterate and grow. Once you have a proven formula that works, keep at it. As Eric says, “Lather. Rinse. And repeat.”
About Eric Knight
Eric is President of Remarkable Technologies, Inc., a company he founded 24 years ago. Through the support of CTNext, he also serves as a mentor for many companies throughout the Greater Hartford region. Learn more about Eric and book an appointment with him.
CTNext, a subsidiary of Connecticut Innovations, is a Connecticut-based resource for entrepreneurial support. The goal of the program is to build a more robust community of entrepreneurs and to accelerate startup growth by providing access to talent, space, industry expertise, services, skill development, and capital to foster innovation and create jobs for people in Connecticut. CTNext launched in 2012 and has more than 1,500 members in its network.