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Five questions you should ask yourself as an early-stage startup

June 27, 2024
in Technology
Five questions you should ask yourself as an early-stage startup
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This article was contributed to TechCabal by Meike Neitz.

What an incredible and wild rollercoaster ride to found your startup! You have an idea; you formulate a problem statement, validate the problem, and develop the solution. And the often bumpy, often exciting journey continues!

When working with startups on pitching or storytelling, I often found that one central question word they don’t usually mention enough, especially in the early stages of the adventure — the “why?”

In this article, I suggest five questions that could help you formulate a strong value proposition, convince investors or partners and steer your startup in the right direction. American author and productivity consultant David Allen writes: “To know and be clear about the purpose of any activity are prime directives for appropriate focus, creative development and cooperation.”

Let’s get started:

WHY do we do what we do?

You probably know what it is that you do; you also know how you (want to) do it. But have you thought about the why? What is the overarching purpose of your business? What’s your vision for the future you want to be part of? Is your vision to bridge the digital divide? Ensure fair and balanced work conditions for care workers? Is your purpose of existence to achieve a decarbonised aviation sector? Create a circular economy in the shoe industry? 

Everyone who’s been to any of my workshops knows that I’m the biggest fan of Simon Sinek’s Start with a Why: I love the magical effect that takes place when indeed startup founders begin their intro or pitch with their purpose instead of telling people what it is they do. Try it for yourself, and you’ll see! 

Here’s an example: A startup that has developed an organic alternative to microplastics. When asked what they do, they could start with the what: “We’re a team of Max-Planck researchers and have developed a green alternative to microplastics by turning food waste in a unique fermentation process into sustainable bio-ingredients for chemistry.” That’s a sentence that’s not so easy to digest. 

Now let us turn this around:

“We believe that the chemicals sector, being one of the biggest polluters on earth, can become green! We are excited to go to work every morning to stop the industry from harming our climate through microplastics. We’re a team of Max-Planck researchers and have developed a green alternative to microplastics by turning food waste in a unique fermentation process into sustainable bio-ingredients for chemistry.” Made a difference?

You will see that starting with the why helps people understand what you do a lot better. Formulating your mission clearly will also help you onboard people who want to be part of the journey; they won’t follow you for the how—they will follow you for your why. 

A strong “why we do this” also guides you through setting priorities and not losing focus – one could say that the why is like a star that helps you steer the way towards the right destination. 

WHY now?

One of the most underrated questions for any type of startup looking to succeed is, why now? In his widely popular Ted-Talk, Bill Gross argues that timing is the most widespread reason startups fail. Therefore, being able to answer the “why now?” question is crucial: What are market developments, societal and cultural trends, movements, new laws and regulations or other defining factors that make your business valuable at this moment in time? 

Investors would also be looking for examples. It could be anything from plastic bags being forbidden in your country to a new sustainability directive of the African Union, the rise of a certain technology in the agricultural sector, a new revolutionary cancer treatment method that has just been approved by the Health Ministry, or a new cybersecurity law that just passed parliament. Being able to implement the “why now” answer in your business model will unravel the most important component of success: relevance. 

WHY we?

Especially when you pitch before investors, they’ll wonder why you should succeed over other competitors in the market. And please note, there’s not a single startup without competition! Even if no other companies are working on what you’re working on (which may not necessarily be regarded as something good), there is always the old way of doing things. Hence, with the “why we” question, you can verify that you know exactly what your value proposition is; you know the ingredients that make your startup better than the rest or simply the old, traditional customer route — they can be tech-based or other product-related features, it can be your first-mover advantage, your geographical reach, key partners or your pricing. 

Having an immediate answer to why clients in the future would want to solve their problems with you and not with any other company will go a long way. 

WHY us?

When I’m doing pitch training, and we get to the team slide, I always ask the attending startups to think about superpowers: What makes your startup team stand out and equipped to succeed? Why should only your startup make it and not a competing team? Single out three superpowers for each person — at best, they’re complimentary. 

All too often, I see whole bios of co-founders in a deck or, even worse, a group picture of the entire team—that’s it. This won’t tell the person you’re talking to anything because they want to know what skill or experience matches precisely with your business! Why should they choose you? Thinking about the features of your team like you’re doing it with your product features is priceless!

WHY you?

Imagine you’re going to an interview for a new job. One of the most common questions from the interviewer would be: “Why did you apply for this particular company? What makes you think you’re a good fit?” Interestingly, though, many startups, whether they’re going into talks with potential partners or investors, do not take the time to prepare a precise answer to that question. Why DHL and not DB Schenker or UPS? Why LaunchAfrica and not Norrsken22 or Partech?

The more research you’ve done on the companies or the funds, their business and investment strategies, and their portfolio, the more nuanced you can answer why you should be in their portfolio or become a business partner. The reasons can be manifold, ranging from business to cultural, geographical, tech-reasons, long-term strategies and vision of the company that align.

To sum up, thinking in “whys” can help you a great deal in strategising better, being more convincing, more precise, and on point in your startup life!

I invite you to try it out for yourself. Here are the 5 Whys again:

1 – Why do we do what we do?

2- Why now?

3 – Why we?

4 – Why us?

5 – Why you? 

What are your answers?

—

Meike is the founder of the cross-continental startup consultancy embassidy, founded in early 2024. Prior, she worked for Germany Trade & Invest in charge of international affairs of the Digital Hub Initiative (de:hub) of the German Ministry of Economic Affairs & Climate Action. From 2020 – 2022, Meike was appointed Digital Ambassador for GIZ,  based in Namibia. 

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Copyright for syndicated content belongs to the linked Source : TechCabal – https://techcabal.com/2024/06/26/questions-for-early-stage-startups/

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