Creating a startup requires equal parts ambition, strategy, and luck. Finding a great idea is only one of several steps in the process. Seasoned entrepreneurs know each startup presents its own challenges, so it’s important to understand the essentials to stay on course. From validating your concept and understanding the market to securing funding and building a strong team, the early stages will set the tone for everything that follows.

Startups are forming constantly and attracting global seed investments, which are the first stage of series funding for startups. These investments totaled $8.3 billion in the second quarter of 2024. In this guide, we’ll explain the steps in launching a startup and common missteps and ways to avoid them.

What’s in this article?

• What makes a startup different from a traditional business?
  
• How to validate a startup idea before launching
  
• How to build your startup from idea to launch
  
• How to secure funding for your startup
  
• How to build a team that matches your startup’s vision
  
• Common startup pitfalls to avoid
  
• How to market your startup to gain early traction
  

What makes a startup different from a traditional business?

The difference between a startup and a traditional business is in the mindset and approach to growth and innovation. Startups are designed to scale quickly, often focus on creating solutions for a widespread market, and frequently experiment with new technologies or business models. They operate in high-risk, high-reward environments in which the goal is often to disrupt an industry or create one.

Traditional business models tend to focus on more stable, established markets with proven demand and aim for steady growth over fast expansion. They’re typically less willing to take risks that could destabilize their business models, prioritizing reliability and efficiency over the ability to scale. In short, startups chase quick growth with a focus on innovation, while traditional businesses focus on sustainability and predictable profit.

How to validate a startup idea before launching

Validating a startup idea before you commit to it helps you avoid wasting resources and refine your concept. Here’s how to ensure your idea is worth your time and effort.

Know whom you’re building for

• Specify your customer profile: Determine who your customers are by considering their challenges and motivations. Instead of doing broad surveys, have conversations with potential users. What do they think of your idea? Are they excited, confused, or already loyal to another business?

• Research the competition: Observe what similar businesses are doing. Where do they succeed, and where do they fall short? Your advantage might be found in the gaps they’re leaving open.

Do your market research

• Find the pulse in online spaces: Check Reddit threads, Quora, and niche communities where your potential users are already talking. Look for problems that keep appearing. If you can solve one that’s not already addressed, your idea might meet a need.

• Use keyword tools to see demand: Google Keyword Planner, Ahrefs, and other tools can tell you whether people are searching for a solution such as yours. It’s a simple but effective litmus test—if there’s interest, it’ll show up in the search data.

Build a minimum viable product (MVP) that gets straight to the point

• Create a basic version: You don’t need a perfect product here; you need an MVP that focuses on your core value. This lets you test before you commit to the idea.

• Implement a landing page: Think of it as your concept’s storefront. Outline what you’re offering and include a call to action, such as “Sign up for updates” or “Get early access.” It’s a straightforward way to gauge interest.

Test interest with ads and presales

• Run a small ad campaign: Use Google or Facebook ads to drive targeted traffic to your landing page. Even a small budget can offer insight into whether people care enough to click.

• Offer presales or early discounts: If you can get customers to contribute even a small deposit, you’re onto something. People don’t often part with their money easily, so presales can be a strong indicator of product-market fit.

Pay attention to metrics and feedback

• Measure engagement: Did users sign up? Did they stay on your MVP, or were they in and out? Every click, view, and bounce provides insight. Engagement metrics are valuable data points.

• Improve based on feedback: What’s the general sentiment from early users? This real data offers a chance to tweak and refine areas including features and price points.

Gather hard evidence that your idea has merit so you’re not wasting time and effort. Get feedback from real users, learn, change course if needed, and let the market guide you forward.

How to build your startup from idea to launch

Building your startup requires a strong vision and plan. Here’s a road map to taking a startup from idea to launch.

Start with validation

• Clarify the problem you’re solving: Think about your idea from your future users’ perspective. What problem do they have, and does your idea offer a real solution?

• Talk to potential users: Before investing, gather feedback. Join relevant forums, conduct interviews, or run surveys to see whether people are interested enough in your idea to pay for it.

• Run a small pretest: A simple landing page with a call to action or an interest survey can reveal a lot. Drive traffic to it with ads, and see whether people click. This can save you months if your concept isn’t attracting customers.

Map out your business model

• Define the revenue streams: Will you rely on subscriptions, one-time purchases, ads, or another model? Answering this early will help guide your expansion plan.

• Outline costs and funding needs: Estimate how much you’ll need for product development, marketing, and any other key expenses. Decide whether you’ll bootstrap or need outside funding, and ensure your choice suits your timeline.

• Set measurable goals: Arrange your big goals and set smaller milestones to maintain growth. This helps you check your progress and stay on track.

Create an MVP

• Focus on the core functionality: First, build only the core functionality—just enough for users to experience the value of your product. You’ll enhance it later, but right now, it’s all about proving your concept.

• Gather feedback as you go: If you can, involve some early users while you’re building. Their input on what’s working (or not) can help you fine-tune the MVP, strengthening the product by the time it’s ready.

Develop your brand and go-to-market plan

• Build your brand identity: Design a logo, pick colors, and set the tone of your brand. Every detail should speak to your target audience, creating an identity that feels authentic to them.

• Outline your marketing strategy: Decide how you’ll reach people. Social media, content marketing, email, and partnerships can all play a role, but focus on a few channels to start. It’s better to commit to one or two than to stretch yourself too thin.

Launch and promote your MVP

• Announce your product: Begin with a launch on social media, forums, or via an email list. Highlight what problem your product solves, and encourage people to try it.

• Focus on the first users: These early adopters are invaluable for feedback and word of mouth. Make it easy for them to provide feedback so you can improve quickly.

Refine based on real feedback

• Analyze what’s working and what’s not: Look at usage data, conversion rates, and customer feedback. Use this insight to guide any changes or improvements.

• Improve and update: Release new features or adjustments to your MVP based on what you’ve learned. Every improvement brings you closer to a full-fledged product that resonates with your users.

Scale the product and operations

• Expand the team: Once you have traction, start looking for people who can help your business grow, whether through development, marketing, or customer support.

• Enhance your marketing efforts: With a working product and an engaged audience, expand to new channels and consider spending more on ads to keep growing.

Taking a startup from idea to launch requires a step-by-step approach. This way, you can build a product that’s resilient and useful to your target audience.

How to secure funding for your startup

Securing funding is an important part of any startup’s lifecycle. Here’s a quick guide to acquiring funding.

Bootstrap

If you have the cash on hand, you can invest a little to keep control of the startup. This might require saving, working a side job, or using credit. Bootstrapping lets you prove your concept before bringing in outside investors.

It could also help to start with a lean team that believes in your vision. Offer equity in exchange for work if cash is tight. The more of your time and effort you put in, the more equity you can hold on to.

Ask friends and family

Treat your startup as you would any business pitch. Explain to friends and family how you will use their money and when they might see a return. But don’t ask anyone who’d be financially stressed by investing. Outline the terms carefully so everyone knows the risk.

Apply for grants and competitions

Many industries have grants available, especially for areas such as tech, sustainability, and social issues. Consider government grants, accelerator programs, or corporate initiatives. Business competitions, pitch contests, and hackathons are also great opportunities for networking and a cash infusion. Even if you don’t win, you’ll gain visibility and be able to fine-tune your pitch.

Find an angel investor

Angel investors are individuals who fund early-stage startups, often in exchange for equity. Seek those who understand your industry and can provide cash and mentorship or industry connections. These investors consider the idea and the person behind it. Be ready to tell them why you care about the idea and why it’s unique. The best ones will care about the vision as much as your business plan.

Crowdfund

Crowdfunding through platforms such as Kickstarter and Indiegogo can help you raise funds and validate your idea. Success there can show future investors that people are willing to pay for your product and believe in what you’re building. A strong story and visual content can make the difference in attracting backers. Offering compelling rewards or perks can also help you gain early supporters.

Approach venture capital (VC) firms

VCs usually look for startups with traction, so you should approach them in the startup’s later stages. Ensure you have a working product, some revenue, or strong growth in your user base first. Find firms that specialize in your industry. You can boost your chances of getting an audience by having mutual connections do the introductions. Then, prepare a pitch deck that covers the essentials—market opportunity, competitors, financial projections, and your team’s expertise. It should tell a story and make the case for how a VC’s capital will drive growth.

Explore startup incubators and accelerators

Programs such as Y Combinator, Techstars, or smaller regional incubators and accelerators offer mentorship and resources in exchange for equity. They can fast-track your expansion while providing a strong network. But accelerators can require a 5%–10% stake of your business for their expertise and funding, so consider whether the benefits are worth the cost at this stage.

Use revenue-based financing or loans

Revenue-based financing lets you pay back investors with a percentage of revenue instead of equity. This suits your startup if you have cash flow and prefer to keep control. Because banks often require personal guarantees or collateral, you might also consider alternative lenders that specialize in startups and don’t demand equity. This works particularly if you have a clear repayment plan.

Raising funds means balancing your need for cash with your long-term goals. Whether it’s a loan, an angel investment, or VC money, consider what each funding type offers and costs before you decide.

How to build a team that matches your startup’s vision

Building a team that understands your startup’s vision involves finding skilled people who align with it. Here’s how to find them.

Define the vision and share it

• Clarify your mission: Explain the vision behind your startup—what drives it, what sets it apart, and why it’s worth your team’s energy. Think about your core values, culture, and long-term goals.

• Share it early and often: Make your vision a central part of your hiring materials, interviews, and onboarding. You want potential team members to feel as though they’re joining something with meaning and direction.

Hire for culture and attitude, not just skills

• Identify values you want in the team: Traits such as adaptability, problem-solving, and a sense of ownership can be more important in a startup environment than extensive experience alone.

• Ask the right questions: During interviews, discuss situations in which candidates faced uncertainty or solved problems creatively. Find examples that show they’ll thrive in a startup’s fast-paced, often ambiguous environment.

Start with a small, committed team

• Take quality over quantity: In the early stages, every hire matters. Instead of simply filling a seat, hire people who can fill multiple roles and are excited about the impact they can make from Day 1.

• Offer incentives to foster ownership: Consider equity or profit-sharing if possible. When employees have a personal stake, they’re more invested in the startup’s success.

Prioritize diversity of thought and experience

• Hire people with different backgrounds: Diversity is a huge advantage, especially when improving and finding creative solutions. Look for individuals with unique experiences who provide fresh perspectives.

• Avoid “yes” people: Find people who are willing to challenge assumptions. They should respect the vision but feel comfortable questioning it when needed—that’s where improvement can happen.

Build a collaborative culture from Day 1

• Encourage open communication: A startup needs constant feedback and collaboration to stay agile. Create an environment in which team members feel comfortable sharing ideas, raising concerns, and contributing openly.

• Lead by example: Demonstrate collaboration and transparency in your work. Whether you’re working in person or remotely, establish regular check-ins, encourage idea-sharing, and ask for input on key decisions.

Invest in team development and growth

• Encourage learning: Startups develop quickly, so your team needs to as well. Support continuous learning, whether through access to courses, industry events, or time to experiment.

• Give people room to grow: Recognize that people joining early will want career growth. Set clear expectations and pathways for advancement as the startup scales so they can envision a future with the business.

Foster accountability and resilience

• Create a sense of ownership: Give team members responsibility over their roles without micromanaging. This builds trust and encourages them to treat their roles like their own mini-startups.

• Encourage resilience in the face of challenges: Startups are unpredictable. Find people who are resilient and who see setbacks as learning opportunities rather than defeats.

In short, building a team that matches your vision is about finding people who are talented and committed to what you’re building.

Common startup pitfalls to avoid

Many entrepreneurs make missteps while building a startup, which can throw them off course. Here are some of the common pitfalls and how to avoid them.

Skipping market research

Launching a product without checking whether there’s a need for it will likely waste your time and resources. Talk to your target audience to gauge demand. Research competitors, run small tests, and validate your idea with real users before committing to it.

Overbuilding the product

Building too many features early can complicate and bloat a product, making it harder to market and test. Plus, more features mean more bugs and longer development. Start with an MVP. This lets you test your core functionality, gather feedback, and add features only when there’s demand for them.

Mismanaging cash flow

Running out of money is the top reason startups fail. You must watch your expenses and avoid scaling until you have the necessary revenue. Create a cash cushion as a precaution.

Hiring too fast or too slow

Hiring too many people early can deplete resources, while hiring too few can stall progress. Hire based on need rather than potential roles. Start lean and hire only people who fill skill gaps or provide necessary experience.

Lacking a clear marketing strategy

If you wait too long to market your product, you can miss opportunities. Build your marketing strategy as you build the product. Establish a presence on the platforms where your audience spends time, and let people know early—even if you do so through a landing page or social media.

Ignoring feedback

Ignoring what users are telling you about your idea can lead to a product that doesn’t fulfill its intended need. Talk with customers regularly, track feedback, and make changes as you go. Staying flexible and listening to users are important for long-term growth.

Spreading yourself too thin

Spreading yourself across too many areas without delegating can lead to burnout and mistakes. Prioritize tasks and learn to divide them up as the team expands. Focus on the areas in which you can bring the most value and let others handle the rest.

Neglecting company culture

A toxic or mismatched company culture can lower morale and lead to high turnover, especially in a fast-moving startup where the team needs to be nimble and collaborative. Invest time and care into building a culture that reflects your values from the start. Encourage open communication, and ensure team members feel valued and heard.

Underestimating the competition

Even if you think your idea is groundbreaking, competitors are likely working on similar concepts. Stay aware of your competitors, monitor market shifts, and remain vigilant. Focus on what makes your idea different, and keep improving it to stay ahead.

Lacking a clear exit or growth plan

A startup without a road map might not have a clear direction, which can deter investors and confuse team priorities. Set short-term and long-term goals. Define metrics for success, whether that’s a potential acquisition, expansion plans, or specific revenue targets.

How to market your startup to gain early traction

Marketing is a key part of launching a product, and a successful marketing plan involves tapping into your networks and finding creative ways to build hype. Here’s an overview.

Know your message and whom you’re talking to

• Define what makes your product unique: Answer why people should care about your product. What problem are you solving, and what makes your solution unique?

• Find your early adopters: Not everyone’s going to be your customer right away, so focus on the ones who really need what you’re building. These people are likely to try it and might spread the word.

Create a simple landing page to capture interest

• Implement a landing page: You don’t need a full website yet—just a clean page that explains what you’re offering and why people should be interested. Add a call to action, such as “Sign up for early access,” to start building an email list.

• Drive traffic with ads: Run a small, targeted ad campaign on Google or social media to see who clicks. A tiny budget can tell you whether people are interested enough to sign up for updates, and you’ll start building a waitlist.

Use social media, and build a presence

• Pick your platforms: Find out where your target audience hangs out online, and focus on creating great content there. Whether it’s LinkedIn, Twitter, or Instagram, go where your potential users already are.

• Show the behind-the-scenes work: Share updates on your product development, any “Aha!” moments, or the challenges you’re tackling. Letting people see the process can get them invested and keep them checking back in.

Do content marketing and search engine optimization (SEO) from the beginning

• Create useful, shareable content: Start a blog or write articles that relate to the problem you’re solving. This positions you as an expert and helps attract users who are actively looking for insight in your field.

• Do basic SEO: Research a few relevant keywords and work them into your content naturally. SEO takes time, so start early to build a steady flow of organic traffic later.

Network and contact industry influencers

• Contact key people in your niche: Find bloggers, content creators, or thought leaders who’d be interested in what you’re building. Offer early access or a demo—remember to keep it authentic and personal.

• Engage in online communities: Look for industry-specific forums, Reddit threads, or LinkedIn groups. Join the conversation in a meaningful way rather than self-promoting immediately; people will check out your profile naturally if they’re curious.

Establish a referral program

• Reward early users for spreading the word: A referral program incentivizes your first users to bring in more people. Offer a small discount, free month, or exclusive perk for every successful referral.

• Make it easy to share: People love sharing, but only if it’s straightforward to do so. Send out referral links, and simplify the process—the fewer steps involved, the better.

Create hype with early access or a beta launch

• Build buzz with exclusivity: Customers love feeling like insiders, so consider offering early access or a beta launch to a select group. This builds excitement and helps you gather feedback before a full launch.

• Use the fear of missing out (FOMO): Adding a “limited spots” message can encourage people to act fast and sign up early. A sense of urgency can help get attention.

Contact niche press and blogs

• Start small with niche publications: Instead of going for big media players right away, look at smaller, more focused publications in your industry. They’re often eager to cover a new startup, especially if it’s relevant to their readers.

• Share your story, not just your product: Journalists love a good narrative. Talk about why you started this business, the unique challenges you’re facing, or what makes your journey different—something that’ll make people curious about what you’re building.

Gather early testimonials and social proof

• Display good feedback: If your early users praise your product, highlight those comments on your site, social media, and email newsletters. People trust the unbiased opinions of others.

• Use small case studies: If you have a user whose story illustrates your product’s value, share it. Real-life examples help potential customers see the practical benefits of what you’re offering.

Keep your early users engaged and involved

• Stay connected with your first users: These are your most valuable advocates. Thank them for their feedback, keep them informed about product updates, and ensure they feel like a part of your journey.

• Build community: Whether it’s a private Slack channel, Facebook group, or forum, creating a space where your early users can connect with each other builds loyalty. Engaged users are more likely to spread the word and stick around.