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From year to year, we read spectacular news about startups that appeared out of nowhere and conquered the digital market in a matter of days. Sounds fascinating, doesn’t it? However, the reality check says that achieving success in the digital landscape is impossible without a well-thought-out strategic approach. It takes many failed attempts to launch an average startup successfully, and the development phase is often the last thing you should be concerned about. Many ambitious teams simply skip the discovery and digital landscaping stage, losing unnecessary amounts of money and gaining nothing in return. Well, we know how to prevent this.
What’s Wrong With Skipping the Discovery Phase?
Before we get down to exploring our recommendations on what works in the discovery phase for a successful startup, let’s make it more clear why skipping this stage might be your biggest mistake.
The thing is that you should never be in a hurry — startup development is a long-lasting procedure that requires time, effort, money, patience, and market knowledge Imagine, you have 20-40k USD for your project. You can either get in touch with the development company or look for freelance developers on Upwork or elsewhere. What’s wrong with that decision? The answer is prosaic — you don’t have enough market knowledge yet to start the development itself.
The reason is that no matter how professional and talented those developers are, the startup isn’t only about the digital solution itself, it’s all about efficient marketing investments. On average, we calculate that the startup development budget should be 50% for development and 50% for marketing. That’s why we don’t get to the development phase unless we’re sure that the customer has secured funds, which can be used later for the sake of the product’s promotion. Without it, your startup has zero chance of reaching the desired success.
How much money do you need to secure both the development and marketing phases? There’s no simple answer to this question because everything is up to your project. For instance, the average cost for no-code apps might vary between 5-15k USD, while MVP development might be as cheap as 30-70k USD. It’s all up to the scale of your future startup, its target audience, expected revenue, etc. We don’t recommend getting into this if your start capital is lower than 100k USD.
So what’s wrong with skipping the discovery phase? The answer is that you cannot manage your budget efficiently unless you gain enough knowledge about your target audience and market in general.
What Should You Know and Do to Avoid Those Mistakes?
Getting down to the project development when you have zero idea how it will reach your target audience, how the customers and users will learn about it, whether it will be able to generate valid returns, and so on is one of the silliest steps you can take when working on your startup. Actually, 35% of all startups fail because their teams simply have no clear goals on how they would work in the market conditions. The discovery and digital landscaping phases can help avoid these pitfalls in the future. Here’s what you need to know about this process in short:
Assess Your Hypotheses
Let’s put it simply — would you invest in a company’s shares if you knew nothing about the company’s plans and its market competition? If not, then why should you invest in your own IT startup if you know nothing about the relationship between your hypothesis and reality?
Validate your hypotheses before investing money in a startup. You should know what your customers need and what they might expect from the potential launch of your startup. Learn about your target audience, interview customers, and pay attention to what they are actually looking for.
There are numerous means by which you can test your hypotheses in real market conditions and we can even dedicate a whole article to them if you’d like to read one. Take, for example, the launch of a simple landing page and collection of primary registrations. There are even simple ways such as working with communities on Reddit or other social networks. If a certain medium helps you reach your target audience — use it to gather data and not waste your investments into thin air.
Learn About Resource Management
No matter how many marvelous tales you hear, in many cases, the success of your startup lies in the available resources but not in the idea. The amount of 100k USD sounds quite scary for many beginning projects. Despite that, you still need to somehow find this money to be able to take your startup to the desired level.
At first, you can start with the FFF (Friends, Fools, Family) but if that doesn’t bring you 100k USD, you have no choice but to rely on fundraising. A successful fundraising campaign is a very complex process that requires a long time of preparation, especially in periods of digital landscape turbulence. Here’s a minimum you need to conduct a successful fundraising campaign:
- Financial model: People won’t invest in anything if they realize that they have no chance to get a return on that investment (ROI). This is actually a reason why 19% of startups never reach their goals. Present the financial model of your startup so that investors can realize the way their funds will return to them.
- Pitch deck: A pitch deck is not merely a set of slides; it is the encapsulation of a startup’s vision, potential, and viability condensed into a visually compelling narrative.
First and foremost, a pitch deck serves as the entrepreneurial handshake, an introduction to potential investors or partners. It distills complex ideas into a concise and persuasive story, providing a snapshot of the startup’s purpose, problem-solving capability, and market opportunity. In a world where attention spans are fleeting, a well-crafted pitch deck captivates, leaving a lasting impression.
Although the pitch deck of each product should be unique, there’s one universal feature to all pitch decks we’ve ever seen — all of them repeat the same mistakes.
- Prototype: In the dynamic realm of startup prototyping, where agility and speed are paramount, a no-code solution emerges as the undisputed champion. No longer confined by the intricacies of coding languages, a startup armed with a no-code platform can swiftly transform ideas into tangible prototypes, unleashing a rapid cycle of innovation.
The beauty of a no-code solution lies in its democratizing power. It empowers non-technical founders and teams to articulate their visions seamlessly, eliminating the barriers traditionally associated with coding. This accessibility ensures that the entire spectrum of creative minds within a startup can actively contribute to the prototyping process, fostering a collaborative environment where ideas flourish.
- Budget assessment: Budget and pricing issues are the reasons why 15% of startups never manage to reach success. Take off pink glasses and start calculating the real costs of your project. How much will the tech stack cost? What amount should you invest in the marketing and promotion campaign? Where will you get money and how will that money return to your investors? These are just a few questions that have to be answered.
All this seems pretty complicated even though this is just a fundraising stage, which is only a part of the whole startup. That’s the reason why the Discovery phase is a necessity for your project. From that perspective, it’s better to count on professional assistance.
Make a Proper Discovery
Now that you have outlined your budget, you can get to the actual discovery phase, which lasts around 2-4 weeks or more, depending on the scale of your project. At this stage, specialists assess your available budget and analyze whether it can fulfill the stated goals and objectives of the project. During the discovery, it’s also important to spot the limitations and constraints of your startup in terms of market exposure, trends, and current requirements. This will help to avoid potential pitfalls on your way.
The discovery phase aims to bring the hypotheses you have validated before to a clearer vision based on the budget you managed to acquire in the second stage. Basically, all the processes from hypothesizing to this point might be called a discovery phase, but an actual discovery starts only when the basic visions and budgets are assessed, validated, and accepted.
Proceed to the Development Phase
At this point, the discovery and digital landscaping stage is finally over. Only when you know the needs of your target audience, raise the necessary investments, and find valid and efficient resources, you can start the development phase. But before you get there, you still have to consult with specialists about which development strategies and tools will be the most efficient for your software solution type. All these nuances determine how much money you spend and what can you expect to get in return.
All this should be based on educated and well-thought-out decisions not just on bald assumptions without any clear base. Even though the initial investment of 10k USD in the preparation phase might seem like a big expenditure, you can trust our expertise that it’s a worthy investment. In any case, it’s better not to save 10k USD on the discovery phase than completely fail your startup because nobody will need it.
