How To Build A Successful eLearning Startup
A startup, as many of us know, is always a risk. And the more complex the project is, the higher this risk. Creating a new product and bringing it to the market involves solving many issues and requires expending colossal amounts of intellectual and entrepreneurial energy. Each of us strives for the success of our enterprise to the point that it becomes almost overwhelming. Our thoughts and aspirations constantly revolve around ways to make our product the most recognizable, desirable, and profitable.
So, how can you create a successful eLearning startup from scratch? Unfortunately, there is no set of well-defined rules that every entrepreneur can use as a recipe for immediate success. If humanity had such a recipe, 100% of all startups would enter the market and scale indefinitely.
Luckily, years of experience and others’ successes and failures can be an invaluable lesson to make a startup company successful from the beginning. But don’t expect miracles or overnight success. Sometimes, even hard work doesn’t produce results if you follow the wrong strategy. What is the winning strategy, then? Although there’s no one-size-fits-all solution, the core aspects remain valid for every startup.
1. Start With A Unique Idea
An undeniable responsibility when opening a startup is choosing an idea. You can never be absolutely sure which product or service will appeal to customers and which will fail to do so. Don’t expect that your primary idea will conquer the world. Instead, get ready to generate and modify dozens of them.
However, you don’t have to develop something extraordinary or superb to make a startup business successful. For instance, pick an idea from a field you have worked in or know a good deal about. Most likely, you already have some connections or at least know where to look for specialists in this particular area. If you don’t have that much working experience, that’s fine. Think about your hobbies, talents, and passions.
Next, choose an industry to start a business in and figure out how to connect your skills with the people’s needs in your chosen field. Finally, you need to find the pain spots that your future product will address.
Your task is to understand what customers want and what will be helpful for them. However, do not forget that your opinion on what might be attractive to potential buyers may differ from the actual state of affairs. So, remember to test the idea before investing all your money in its implementation. For instance, find 10–15 people in your social environment who can benefit from your product or service and measure their interest level. That’ll do the trick at this initial stage.
2. Study The Market
A valuable but overlooked tip for startup entrepreneurs is researching the market and finding a product or service that solves the people’s needs. For making well-grounded decisions for the development of the project to get profit from it in the future, market research is your reliable assistant. Without it, you won’t have enough information to ensure that anyone will want your product in the first place and will be willing to pay money for it. And profit is what distinguishes a business from a hobby.
A startup will bring in money only if it solves a problem or makes people’s lives easier. If you have no clue what customers need and base your decisions on guesswork, your startup has every chance of joining the ranks of failed projects. By the way, 42% of all startup deaths are caused by insufficient market needs. So, here’s the information you should collect before putting all your money into a startup or hunting for investors:
- What is the income in the industry in which you are going to develop your startup?
- What market share can you expect to get?
- Who are your future customers, and how important is your product to them?
- How many competitors are there in your niche?
- How much will potential customers be willing to pay for your product or service?
- What income can your startup generate, and how long will it take?
Two other essential components are customer acquisition cost (CAC) and customer lifetime value (LTV). Roughly speaking, CAC is advertising plus associated costs. These figures can determine the startup’s potential profit—although they do not give the complete picture. Finally, although you won’t be able to calculate all the metrics accurately, you can estimate the advertising costs of competitors and look at the price of their products.
You need a clear idea of your end customers’ age, gender, education, annual income, values, etc. Always ask yourself the question, “Why do they need my product? What problem will it solve?” Next, select a small group of people that fit the description of your end consumers and survey them. Listen to what they say, change or add features, and make your product more appealing to its target customers.
3. Invite Co-Founders
A co-founder isn’t a must, but inviting one or several people when starting a business will make the task easier, especially if you don’t have any other employees yet. If you have money to hire professional staff, you may not need a co-founder. Otherwise, you’ll have to work on the project with a limited workforce. So, if you have a few qualified people as partners, you’ll have an initial team to get things rolling.
You might be good at understanding the technical part of your startup but have no clue about advertising or management. You need to find other people with different skillsets who’ll spot the problems where you won’t know to look. In addition to professional qualities and talents, your partners must share the same vision as you. You should get along well and think in the same direction.
Also, your partners should be focused on the success of the project and, just like you, wake up and fall asleep thinking about improving the product. Keep in mind that you will have to spend a lot of time together and communicate, so do not take on as co-founders people who annoy you or with whom you have conflicts. A startup needs a lot of work, and often, it’s simply too much for just one person. Plus, you’ll have difficulty finding investors because they don’t fancy funding solo projects.
4. Create A Short But Informative Business Plan
Another piece of advice for startups that some of us would like to skip (sadly, it’s not always possible) is to make a business plan. But, to be honest, a preset plan never works the way we think it will since the market is constantly changing, and your company will have to adapt to these changes.
So what? If it’s just a waste of time, can you go without a plan? Well, not really, unless you have deep pockets. Why? If you don’t have a business plan, you can’t get a bank loan or persuade angel investors to give you money. A traditional business plan consists of the following:
- Executive summary
This is basically the gist of the entire document and often the only part that a potential investor will spend time on.
- Company description
Basic information about your company, name, location, business goals, mission statement, etc.
- Market analysis
The target audience, market trends, competitor research, etc.
- Company structure and management
Who will run the company? Details about the founder and CEO, their brief bios, descriptions of your departments, etc.
- Funding requirements
How much money does the startup need?
The team and their strengths.
- Financial projections
Estimated income and expenditures.
Nobody says your plan has to be a formally written document of a hundred pages. Instead, it should contain a brief description of your project (the product’s essence), basic costs, and an expense budget. If the target audience of this plan is investors, focus on the financial side. For example, you’ll need to show the investors the project’s ability to generate enough cash flow to cover the investments with an acceptable rate of return.
5. Networking Is A Must
All successful startups have a common feature—a developed network of valuable contacts. Well-built relationships with the right people (co-founders, investors, clients) will help you achieve your desired business goals. Networking is about communicating with people and establishing long-term business relationships with them. The more people you know, the higher the chances that some of them will be useful to your business. But where and how can you make these acquaintances? Here are some ways to get connections:
- Attend thematic events and professional conferences
There, you will find out the latest industry news and form significant working contacts who will be useful in the future.
- Sign up for specialized training and masterclasses
These are great places to meet with coaches and mentors who can help steer a startup in the right direction, share their entrepreneurial experience, and give tons of tips for startup success.
- Use social networks
Making business connections online is always less time-consuming than the same process in the physical world.
Remember to keep up with new acquaintances. To get started, write a follow-up letter, add them on Linkedin or Facebook, call, or make an appointment. Show that your communication will be two-way and mutually beneficial.
6. Get The Funding
Usually, after you’ve come up with a startup idea and studied the market, you need to find investors. Even if you have set aside a sufficient amount of money in your opinion, do not rush to invest it in your new business in its entirety. Firstly, these funds still may not be enough because it is impossible to calculate all the costs absolutely. To grow and stay one step ahead of the competition, you need to spend a lot of money that you may not have at the time. Secondly, it is wiser to pass some of the risks on to investors. Of course, if you do everything wisely, all investments will return with interest. But you will be much more comfortable knowing that you will not be left destitute if something goes wrong and you fail. Where to look for investors?
- Venture capitalists
- Small business administration (SBA) programs
- Startup launch platforms
- Angel networks
- Bank loans
- Family members and friends
Don’t give up if you can’t get generous offers from investors or if they refuse to work with you. People are afraid to part with money if they do not see a direct benefit. Perhaps you failed to describe the potential revenue of the future product. Learn to persuade investors. Provide some statistics and information from industry sources and explain what benefits each party will get from the transaction. If you are confident that you’ve created a first-class product, it won’t be challenging to convince the investors of its success.
7. Beware Of Too Much Competition
Underestimating competitors is fatal to a startup’s viability in 20% of cases. Many newbies believe that because their product wins in quality, it will automatically beat the competition. Unfortunately, for small business owners, the chances of winning the battle for a consumer against large companies is close to zero.
Large corporations have more resources, and if necessary, they can lower prices for products and services by reducing production costs. A small business can only compete through innovation and flexibility. The realistic field of action for them lies where industry leaders have little or no involvement. For startups, it’s all about the positioning and not about their size.
It is more effective to be in an environment that constantly generates new ideas. Large companies innovate too, but not as quickly as a startup. Whereas in a giant company the journey from idea to implementation takes from several weeks to a month, in a startup a valuable idea can find practical business application within a few days.
It’s improbable that you could beat big businesses where they are the strongest. So, don’t go straight to serving the global market, because your startup can’t compete with industry giants yet. Instead, it is better to choose areas where competitors do not work perfectly and react slower.
8. Gather The Team
At the initial stage, a team engaged in a startup is always smaller than required for the amount of work. For this reason, each team member takes on multiple roles and performs various tasks at once. But you can’t and shouldn’t do all the work yourself. Since the company’s success partly depends on the professionalism and enthusiasm of the team, you’ll need to fill key positions with professionals and get them to work together.
When hiring professionals, pay attention to their skills relevant to the company development stage, not to how the candidate excelled in the past. Often, with the proper skills and interest in the project, any person can be molded into an effective employee. Another important point: the most talented specialists are already working somewhere. So if you want to get them on your team, be prepared to pay them more. In addition to hiring employees, don’t forget about creating and maintaining a healthy microclimate in the organization. If you don’t make it a comfortable environment for employees to reach their full potential, they will leave for another company.
9. Promote And Attract Customers
A well-thought-out marketing strategy is a driving force behind your startup. In simple terms, you need to make yourself known to the people around you. Otherwise, they won’t even know how great your product or service is. Essentially, your task is twofold:
- First, attract people with your selling offer.
- Second, convert them into customers.
The easiest ways to get your startup known to the world are:
- Advertising offline and online (social networks, Google ads, etc.)
- Developing the company website
- Using email and content marketing
- Offering bonuses (e.g., “invite a friend and get $10”)
Of course, it is best to have a marketing specialist on the team if you are not personally strong in marketing strategies and promotions. They can analyze the target audience, identify competitors, find the proper promotion channels, and determine which tools to use (SMM, SEO, crowd-marketing, etc.).
10. Don’t Chase Perfection When Launching Version Zero
Most startups are built with quick implementation in mind. An example of this is the many mobile applications that solve minor tasks. The simpler the project, the faster it can be implemented. And the more additional features the product has, the more time it would take to make it work.
A widespread mistake is striving for perfection and delaying the product’s launch. With the limited time you have to outstrip competitors, it’s unwise to waste time on endless improvements and bug-fixing. So, why waste time on doubts? Instead, launch the initial version and fix the rest as you go.
One of the most valuable business tips for startups is to launch the project on time. Don’t postpone the big day only because you’re afraid no one will like your product or service. Once you’ve created an MVP, show it to the world. It will allow you to get feedback from users and find out what they like and what needs to be improved and fixed.
The MVP will help you test the effectiveness of your idea. Why expand the functionality and invest in a project that later turns out to be useless? Conversely, if you launch a business model and it turns out to be at least partially successful, you can safely continue improving your product or service.
There will always be a lot of aspects you can’t foresee or plan for. But sooner or later, you’ll have to take the first step because you can’t wait forever for better timing. So start moving forward, test your product, collect customer feedback, and improve. There is no other way.
11. Scale And Grow
After your initial strategy has yielded the first positive results and your MVP has passed all the tests, you can move on to scaling or growing. Growing is when you add new features, hire more people, add assets, etc. Scaling is increasing revenue without adding more resources. It’s up to every entrepreneur to decide how to expand after considering what is best for their business, staff, and clients. Here are some tips to help your company grow:
- Decide in which direction to expand (the niche you’re in or a new market)
- Get more funding (investments)
- Cut the features of your product that don’t convert. Instead, focus on the products or services that gained more customer interest. Have you heard of the Pareto principle (80–20 rule)? Use it to get rid of the processes that don’t work.
- Come up with new features and test them
- Hire more professionals. It’s ineffective and impossible for a few people, yourself included, to do everything alone. Delegate routine tasks to the team.
- Invest in promotion, expand your customer base, and retain existing clients by improving Customer Experience. The latter can be done by collecting and analyzing customer data. For example, you can use customer relationship management software to monitor relevant interactions.
At this point, focus on the moves that will bring in more profit and reduce risks. At the same time, continue the process of development and improvement. Always get feedback from customers and adapt to the market needs. Pay constant attention to trends in your industry. Remember, entrepreneurship is an ongoing experiment. Once you stop developing and growing, your business is doomed. So instead, try new methods, come up with alternatives, and learn to be flexible. Prompt response to market needs and flexibility are the strongest aspect of any startup and the key to its success.
It’s almost impossible to predict the success or failure of any particular startup. However, if you have a clear goal in front of you, follow the right strategy, and are not afraid to work hard, the rest is a matter of time. Yes, you’ll spend tons of hours working on your startup, stumbling, failing, and trying again. The path to your dream will likely be rocky, and you’ll have to change and improve constantly, but eventually, you’ll get to the finish and will be glad that you didn’t give up. So test your vision, learn from your mistakes, and always move forward.