Launching a tech startup

• The first step is to identify a problem. Second is to understand the gravity of the problem and a possible market for a solution.

• Next, one needs to assess the existing players, their pricing models, the features they offer, etc.

• Then comes building of the prototype or MVP (minimum viable product) i.e. a basic version of the envisioned final product to test with users and prospective customers.

• Being able to quickly gather and incorporate product feedback in the product development becomes the logical next step.

• Creating a comprehensive go to market strategy is the next step after the product is finalised. The go to market strategy needs to clearly lay out plans for customer acquisition and retention at the lowest possible cost.

• Throughout this journey, building a core team is a key step depending on the expertise required. Also, arranging for funds (either through own investments, friends and family or through institutions) is critical for any business to succeed as per the vision and the goal of the founders.

• The first step is to clearly define the problem and the scope of the proposed solution.

• Next is to define the technology and the development requirements for the solution and thereby the costs associated with it.

• Next look at the target audience and assess how big the market for the solution could be.

• Check for competing products offering solution, even partly, to the problem under discussion – understand their offerings, their price points, the size of their market. This is the first stage where the viability of the business can be assessed. With all the costs and revenue parameters, can this idea result in a viable business is the question one needs to answer.

• If the answer is yes, then create an MVP with as low an investment as possible and test it with a few customers to understand the acceptance of the solution. During the tests, get feedback on the features that could enhance the value proposition of the product and also the willingness for the customers to pay for the features.

• Lastly, basis the price and cost estimates, future cost of customer acquisition and retention, requirements for scalability in terms of investments in technology, people and infrastructure, try to work out a business case and future projections to assess if the tech start up idea has potential.

• One of the most common challenges that any businesses face is that they overestimate the revenue and underestimate the costs in the planning phase and hence end up with a negative cash flow, loss making business with no break even in sight.

• Specifically AI and ML businesses face the challenges of data acquisition and model development and the onset. As the business grows, attracting the right set of team members with the required skill set becomes a challenge.

• One unique challenge that businesses in this field face is that of data privacy and ethical considerations i.e. avoiding bias in data and algorithm is key to handle social norms, negative impact.

• Lastly, with growing businesses, monetisation to improve the lifecycle value of existing customers and being able to attract new customers at an affordable cost continue to remain big challenges for the industry.

• The most important starting point is to define the target audience in as much detail as possible.

• Next is designing the communication – what is the solution, how does it solve a particular problem, what benefit will it give to customers and so on. It also advisable to have a few testimonials from the test phase as a part of the communication.

• Then comes the actual launch of the product. Typically within the AI and ML industry, one would have an impressive website, a functioning app or plug in ready for download.

• The launch plan could also include early bird offers or free trial periods to get the initial traction.

• It should also have a good mix of digital marketing (SEO, SEM, SMM) and offline marketing (events, seminars, trade shows related to the industry) to ensure the best returns on the marketing money spent.

• There should also be robust feedback mechanisms and key performance indicators to be able to assess the effectiveness of each of the launch activities and calculate the return on investment.

• Firstly, to start any business, one needs to decide on the ownership of the company – sole proprietorship, partnership, private limited, etc. Next the company needs to be registered and documents such as company identification number, PAN, GST (if applicable), TAN need to be applied for.

• Local labour laws, PF, gratuity, ESI, daily wages need to be followed depending on the location of registration. AI, ML and tech startups also have an additional requirement of data privacy.

• One needs to align the systems and processes to adhere to laws like IT Act 2000, its amendments and other such laws that may come into existence from time to time.

• Depending on the nature of the work, one might want to file for intellectual property rights (IPRs), patents, trademarks and copyrights, etc.

• Once the business is in operation, regular filing of GST and tax documents also becomes a part of the compliance checklist.

• One should also be on the lookout for registrations like ISO, government grants, startup India events, etc. While these are not mandatory, they might help the business in various ways.

At Racehorse Business Consultation or RBC, we believe in “your customised templates for success”. We believe every business is unique and has different requirements. Here are a few things that we can help you with:

• Idea Evaluation: Assessing the business idea with it’s potential offering, impact and position, leadership team alignment

• Business Model Validation: Assessing market fit, benefit realisation and revenue potentials.

• Go-to-Market Strategy: Developing a business plan, roadmap for product launch and customer acquisition.

• Financial Parameter creation: Creating business pitch, financial projections and investment readiness.

• Fundraising Strategy: Create platform for Identifying potential investors and crafting a compelling pitch.

• Leadership Alignment & Team Building: Providing leadership support, defining roles and responsibilities for critical roles.

• Legal and Regulatory Guidance: Consultation on legal and compliance requirements.

• Technology & Business process Assessment: Evaluating business process, technology stack assessment, consult on “how to adopt/develop” and consult on infrastructure needs.