Got a cool idea you want to turn into tons of money? You’re in luck—this giant article will help you get started, A to Z.
So you’ve got an idea and you want to get started. Enter analysis paralysis! So much stuff to memorize write down, plan, build…yeah, well, we’ve all been there. The journey begins with the first step, and the first step is a piece of paper you write a plan, a plan that begins today. This big-boy article will help you discover the steps you need to take, from a general approach to handling the MVP stage well and choosing the tools & the jurisdiction to register in.
Disclaimer: the insights in this article are provided purely for informational purposes only. Do not construe any such information as legal, tax, trading, investment, financial, or other advice.
Phfew, legal spiel out of the way, let’s get cooking.
Launching an MVP—your product stripped to its essentials—is a defining moment for any tech startup. It's the point where the rubber meets the road, turning your vision into something real, something testable.
The nature of MVPs defies one-size-fits-all examples. The form it takes could range from a simple mobile app to a more complex SaaS platform, targeting either niche user groups or broad demographics. Focus on its central mission: to serve as a skeletal version of your product, good enough to go live and collect user feedback for future iterations.
Once upon a time, Slack and Dropbox too were mere MVPs—basic, unadorned, yet functional. The same holds true for juggernauts like Amazon and Facebook. They all started as MVPs, hence the general perception that an MVP is a sort of "humble beginning," a launchpad that catapulted these companies into unicorn status.
The startup landscape is more packed than a subway at rush hour, especially given the recent startup surge across the globe. For instance, in the UK alone, there was a 14% uptick in new businesses in 2020. So, you're not just throwing your MVP into the wild; you're tossing it into a teeming jungle. This density increases the pressure on early-stage founders to think critically before making their splash in an already overcrowded pond.
Using an MVP is like running your idea through a stress test. It crystallizes your core concept and allows you to spot hitches in a controlled environment, which is far less risky than a full-blown product launch.
Why are MVPs the go-to strategy for today’s startups?
Because they dovetail perfectly with the prevailing startup ethos of lean and agile operations. In a world where "fail fast" is the mantra, MVPs offer a way to quickly vet your product ideas across diverse conditions without burning through your capital or time. You get the insights you need without going all in, and that's smart business.
Central to the lean startup methodology—a philosophy highly compatible with the no-code movement—is the drive to swiftly deliver a product into the consumer's hands, curbing resource drain and optimizing efficiency.
In-house feedback loops can then be rapidly shifted to the back burner, freeing up organizational bandwidth for building. This enables startups to validate their concept's worth and pitch a compelling case for its viability to potential investors.
So, let's get straight to the point.
Founders need to think long and hard about what their MVP—often built using no-code platforms—aims to accomplish and what insights they want to extract from it.
Typically, an MVP takes the form of a prototype, a boiled-down version containing only essential features. This strategic move helps startups dodge the bullet of investing in a full-fledged product that may flop or includes redundant features. The more you test with real users, the earlier you do it, the better the final product you'll end up with.
On the less elaborate side, some startups might launch a basic landing page or roll out a demo video to showcase the product's potential—techniques frequently utilized in the no-coding community. These approaches are budget-friendly and serve as interest gauges but fall short on thorough user testing. For even more bang for their buck, startups can explore creating a free YouTube intro to add a touch of polish to their videos, further enhancing their initial outreach efforts.
The choice between a landing page, a demo video, or a more intricate prototype will depend on your specific scenario.
For instance, a Web3 application leveraging emerging tech like AI might find a landing page useful only for initial marketing traction, not for user testing. A demo video, however, could more effectively communicate the app's value proposition.
If you're entering a saturated market with a novel twist on an existing product—like a groundbreaking e-commerce platform—a full prototype might be necessary to make your uniqueness clear.
Startups must be laser-focused on the data they intend to mine from their MVP.
You're not just throwing something against the wall to see what sticks. Metrics like user engagement, the practical utility of the product, and its actual value to end-users should be at the forefront of your strategy. And yes, with MVPs, you can also validate your revenue model. If users aren't willing to shell out for your core offerings, you'll find out soon enough to pivot.
While user registration and retention may be imperfect indicators in the MVP stage—given the absence of comprehensive marketing and CRM tools—they can still provide valuable glimpses into your product's trajectory.
MVP failures can be a gut punch for founders and developers. You've invested blood, sweat, and tears, only for your minimal viable product to fall flat. Failure is baked into the very concept of an MVP. It's not a bug; it's a feature.
Gleaning value from your MVP is about diving deep into your losses. You've got to dissect user data like it's an open-heart surgery, constructing a roadmap for future development based on what you uncover. Whether your MVP met its pre-launch objectives or crashed and burned, understanding the 'why' behind user behavior is gold for refining your final product.
Let's ponder the big question: is there such a thing as a 'bad' failure for an MVP?
If you've set realistic targets and milestones beforehand, it's unlikely that the exercise will yield zero insights. Sure, there are exceptions, like launching a product that's ahead of its time, leaving its "minimum viability" open to question. When users can't grasp the product's value, either through hands-on experience or through demonstrations, then the feedback you get could be next to useless.
From my own experience in navigating the choppy waters of startup product launches, the trick to turning an MVP from a dud to a stud lies in its intent. Going to market to merely "test the waters" is one thing, but having a clear objective is another altogether. Whether it's determining market fit or nailing down essential features, your MVP becomes a Swiss Army knife for informed decision-making when done right.
So, let's put a pin in the idea that MVPs have to be 'minimal' in their impact. With solid testing criteria and adaptability to pivot based on fresh insights, these lean launches can provide an ongoing direction for startups.
In today's saturated market, where consumers are spoiled for choice across software, services, and apps, you better have a really good reason for launching yet another product. You think you've got something hot? Good for you. But beware, there are still traps aplenty.
Before your MVP sees the light of day, ask yourself three simple questions:
If it's a 'yes' across the board, dig deeper. Start grappling with the following:
OMTM, or the One Metric that Matters the Most, can act as your guiding light. Whether it's Cost of Acquisition, the number of new installs, or the ratio of installs to reviews, these metrics are especially valuable in the MVP phase. They help you gauge the pulse of your product's viability early on.
Let's say you're kicking off an eCommerce venture. Initially, CAC might be your go-to OMTM. But two years down the line, if you've managed to snag a loyal customer base, switch gears. Now, focus on metrics like average cart size or monthly recurring revenue.
For social media apps, the OMTM might start as the daily rate of new signups. As your app matures, you might pivot towards metrics like user engagement or content creation percentages.
The point is, an OMTM isn't a static beast. It evolves as your business matures, offering a consistent anchor amidst the chaos of early-stage development. This metric helps keep everyone aligned, ensuring you don't lose sight of what's vital as you navigate the labyrinthine journey from MVP to full-fledged product.
In truth, one of the cruxes of pre-development is ensuring your team is on the same wavelength about what actually matters. Consider the following aspects:
MVPs aren't about hitting a home run on your first swing. Far from it. They're your quick, low-stakes avenue to either validate or rethink an idea. This may be a bitter pill for those accustomed to the plodding pace of big enterprises as opposed to the scrappy hustle of startups. The raison d'être of an MVP is to release a stripped-down version of your product to quickly assess its viability, sans the financial sinkhole.
Companies often miss the memo on the 'Minimum' in MVP. Forget the daydream features and the 'wouldn't it be nice' extras. Your objective is to hammer out a product that’s lean but not lame. It needs to pique the interest of your target audience without a high budget or eternal development cycles. The best MVPs are ever-evolving beasts that start simple and expand in complexity over time.
Whether it's the hotshot CEO or just an intern, every last member of your team should be on the same frequency. There needs to be collective agreement on what the MVP is aiming to achieve and the roles everyone will play in bringing it to life.
It’s all about data from the get-go, even before you sketch out your MVP. Here, you're navigating through a mix of qualitative insights. These are mostly derived from market intel and a good, hard look at your competition.
Think of market research as your compass. It does the following for you:
Gather this data two ways: primary research and secondary research.
This type involves first-hand info, perfect for market segmentation and crafting user personas. You're talking surveys, one-on-ones, or focus groups. These are gold mines for evaluating if your product has legs to stand on or if it's a dud.
Even if you’re confident your product should exist, primary research is your second layer of validation. It demands effort, sure, but it could save you from pouring time and resources into a dead-end.
Here's where you go Sherlock Holmes, piecing together data from:
Don’t turn this into an endless scavenger hunt, though. Avoid analysis paralysis but aim for a well-rounded understanding of your market landscape.
As you dive into market research, you're bound to stumble upon intel about your rivals. Sure, you may think you know who your competition is, but formalizing this knowledge through competitive set analysis is quite smart.
Kick things off by identifying businesses with similar offerings. Shell out for market reports or take advantage of review platforms like G2 to pinpoint the top dogs in your niche. Don't underestimate the power of social platforms as business directories. LinkedIn, with its industry filters, is a pretty nifty tool for rounding up your 'Most Wanted' list of competitors.
Got your list? Good. Now it's dissection time.
For analyzing competitors, the SWOT framework is a favorite. Yep, that's Strengths, Weaknesses, Opportunities, and Threats. Use SWOT to zero in on:
This foundational research is your roadmap for MVP development.
Before you go down the development rabbit hole, there's one more item on the pre-game checklist: Financing. Make sure you know what you’re diving into, financially speaking.
Running out of cash is the second leading cause of startup death, right after "no market need." Seriously, about 30% of startups underestimate the financial grease they need to slide their MVP into the market.
Here are three monetary considerations that can make or break you:
Great developers come at a cost. The word "startup" might evoke images of bootstrapping techies willing to work for next to nothing, but let's not kid ourselves. People have rent and Netflix subscriptions to pay. While you might not be able to match corporate salaries, a killer company culture can offset lower pay. But remember, culture isn't free. Whether it's annual retreats or a well-stocked snack bar, budget for it upfront.
Also, get savvy about who you bring on board. Sometimes a green but go-getter newbie can outperform a seasoned pro. Keep your radar tuned for rising stars; being a startup doesn’t give you a pass on quality hiring from the get-go.
The cost of crafting your MVP is not the final bill for the whole shebang. Don’t bet on post-launch revenues to finance your full-fledged product. You'll likely iterate your MVP, adding features you hadn't even dreamed of initially. The trick is to have a roadmap of your final product and to slap price tags on incremental features. This gives you a more realistic projection of your financial outlay.
The landscape of your finances will shift like sand dunes. Initially, you may boot up with founder contributions or angel investments, but your financial landscape can change. Maybe it's scope creep or additional features, but know this: the final product will almost certainly cost more than your MVP. Plan for that eventuality.
So, about external funding—plant those seeds early.
Pre-seed funding: generally comes from founders. While it's possible to seek external financing pre-MVP, remember, investors are eyeing you as much as your product. A solid MVP proves your product’s viability and also your team's competency.
Seed funding: This phase opens the door to a broader pool—think friends, family, venture capitalists, and angels willing to gamble on you even without a proven track record. Seed funds can range from $10,000 to a couple of million, and you'll have to decide if you want to go after more.
Series A funding: In the $2-15 million ballpark, you're now pitching to traditional venture capital firms. At this level, angel investors still play, but their influence is dwindling. Equity crowdfunding is also a viable path here.
Series B, C, and so on exist, but let’s not put the cart before the horse. Your immediate focus should be getting your MVP funded and out the door. Start laying out your financial blueprint sooner rather than later.
Whether you've been cooking up a startup idea for ages or were hit with a "Eureka!" moment in the middle of the night, you've got to legally anchor that business. After validating your startup idea with no-code MVPs and confirming its market viability, the next essential step is business registration.
The jurisdiction you opt for can significantly influence your startup's fate, especially when it comes to customer acquisition and raising venture capital. Underrating jurisdictional choice could backfire, leading to complexities you didn't sign up for.
Avoid DIY legal advice culled from your buddies or Reddit threads. Consult a legal pro well-versed in startup ecosystems.
For no-code startups looking to incorporate, ponder these considerations:
You can essentially incorporate your startup wherever you fancy and scatter its elements—founders, team, and operational HQ—across various global points. However, align these key components in strategically advantageous locations. Fail to do so, and your no-code startup could risk crumbling due to fragmented foundational pillars. To avoid this pitfall, keep these pivotal questions in mind as you select the optimal jurisdiction for incorporation.
Here’s what you need to consider.
Customers and partners often have predefined notions or even formal requirements concerning the jurisdiction where your business resides. Shaky or inadequate legal frameworks, like those concerning Know Your Customer or Anti-Money Laundering, can be a deal-breaker for them.
Need to operate in multiple regions? For instance, if your primary customer base lies in the EU, consider incorporating there to avoid GDPR-related headaches that can surface if you're US-based. You might even need dual companies: one in the U.S., one in the EU. Basically, align your jurisdiction with your primary and available market to sidestep legal roadblocks.
Investment is a trust game, entwined with calculated risks and mutual interests between investors and startups. Before casting your fundraising net, get clear about the investor species you're angling for.
Each investor has a niche—be it smartech, healthtech, or traveltech—and geographical leanings. Consider also the legal protections and tax implications investors will scrutinize, from Singapore to Silicon Valley. So, know your investor's habitat and habits.
Pinpoint where your startup's core human assets will operate. Founders, where are you planting yourselves? Where should the operational HQ sprout? What's the prime soil for attracting a top-tier team?
Consider quality of life and regulatory landscape, because team cohesion correlates with the jurisdiction's governance and lifestyle perks. Whether your crew is geographically scattered or rooted in a single location, think through elements like tax benefits and compensation structures for everyone involved.
No two startups are cut from the same cloth. What are your non-negotiables? Start with intellectual property protection and tax-optimization schemes.
Examine if your preferred jurisdiction will smooth your path or set up hurdles. Does it offer IP box regimes? Is it tax-friendly? And importantly, will it legally safeguard your offerings, both in digital storefronts and the courtroom?
Only the good stuff, I promise.
Does the jurisdiction make share transactions—like issuing shares or executing secondary sales—a cakewalk? In the UK, you can manage your shares online, with changes reflected in official records within days. In contrast, some European nations force you to submit physical documents in their native language.
Is the jurisdiction cost-effective, and does it offer tax perks? Cyprus stands out in this regard. Here, your business can meet "substance" criteria fairly easily, unlocking various tax advantages. Other European countries offer similar perks like virtual offices and accounting services.
How straightforward is it to open and maintain a business bank account? The rise of fintech in the UK, for instance, means quick access to e-banking solutions. Look for jurisdictions that don't make banking a years-long ordeal.
If you're a tech company, does the jurisdiction offer any sweeteners like special tax and IP schemes? From Cyprus's IP box regime to the UK's R&D tax relief, different countries offer varied incentives that could make your tech startup's life easier.
Any additional candies for the founders themselves? Estonia offers an e-residency program, enabling quick company registration and even potentially facilitating Schengen Area access.
Below is a comparative table that throws light on popular jurisdictions for startup incorporation.
If you're a startup hustling to build your MVP and the deadline is yesterday, you need tools that get you where you're going, fast. Directual can be (and should be! Hard sell right there) your go-to. Let me explain how it works.
Directual is a full-stack app development platform that can help you create complex logic for your app, without writing a single line of code. You can even speed up the process with D-GPT and conjure your app into existence with a prompt. Yeah!
Directual is actually integrated with OpenAI, so you can harness the power of ChatGPT and Dall-E 2 for your projects. You're not choosing between Directual and AI; you're leveraging both to amplify your capabilities.
With just using AI like ChatGPT for coding purposes, you need to learn how to phrase your prompts just right, and there's always a risk the answer might not be what you're looking for. Directual, on the other hand, gives you pre-built "construction blocks" and a visual interface that speeds up the learning curve.
ChatGPT has limitations, especially when it comes to the memory and size of the response. Directual, on the flip side, is built to scale. As your project grows, you don't hit the same walls you would if you were relying solely on AI-generated code snippets.
Use Directual to build your MVP faster, and use AI to refine specific advanced tasks. It's a symbiotic relationship that can make your development process a lot smoother.
Want to see how it’s done? There you go, the best hour of your life in terms of ROI:
With MVPs and starting a business in general, there so many headaches involved. You will feel like the people of the world itself have banded together just to make you fall. Not true! In fact, the closest allegory to launching an MVP is how park rangers prepare for a long trek. 90% of their survival depends on how well they chart their course through (often) unknown territory, and what they bring with them. Pick the best tools for the job—Directual is one of them.
Want to learn more? Send us a message at hello@directual.com or better yet, head into one of our communities and chat with us directly—the links are in the footer below.
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