Stage 1
Stage 1 is process of turning a business idea into a
real business planning. Typically founders are
working for no salary, as paying themselves makes
little sense. The focus is market research and
gathering data that will allow founder(s) to steer
the enterprise into a differentiate market niche
where resistance to market entry will be the lowest
and sales can be achieved most easily (lowest
fruit). By going after a narrowly targeted customer
profile or specific customer list who have a visible
pain they will get companies to take the extra risk
of dealing with a startup company. With a low burn
rate you want to take your time and learn as much as
possible before taking on any expenses.
Bootstrapping and personal savings are generally
allowing the founders to work without income.
The catch-22 here is that more expertise is
needed than the small team usually has. Using
virtual team members is usually a partial solution
to this dilemma. The business design process will
lower risk and reduce time and capital needed
dramatically. Many business model options should be
explored with the idea that starting with one
business model to financing getting to another will
preserve the founders’ ownership by reducing capital
needs. |
