The earliest phase of business development – from creating a new concept to launching it in the marketplace – is the most crucial time in the history of your business.
Just as our early childhood defines the dispositions that last a lifetime, the concept-to-launch phase is the formative period of your business. For a first-time founder of a new business, the most important success factor during this phase is total commitment.
The concept-to-launch phase entails:
Branding is the essential activity in developing a concept for launch. Your brand is everything. A vibrant brand can be expressed in a clear, concise statement. The brand must be differentiated and it must be positioned to meet a clear need.
During the concept phase, first-time founders must articulate the problem the business will solve and define its market. The business concept must not only solve a real and present problem but it must also do so in a way that is viable and that people are willing to pay for. Too many founders, particularly in tech, create solutions that are in search of a problem. If the business concept is not oriented around a clear need then it’s not yet a valid business concept – just another bright idea.
A recent study of technology startups found that successful companies pivot several times before commercial launch. Flexibility and the ability to adapt to feedback is one of several critical facet of the concept-to-launch phase. This feedback may come from an advisory board, from venture capitalists, from potential customers, or from early hires. Count on the fact that your idea will change from the napkin on which you first wrote it down, until packages are ready to ship, services provided or users are ready to click. Accepting the inevitability of change is essential for a successful launch.
Building your team is another facet of this formative phase. These early hires must have the capabilities to bring your idea to market. They establish the corporate culture and define the systems that serve the organization as it scales. These hiring and partnering decisions can be costly in terms of money, time, and reputation.
Funding a startup is an obvious necessity. Undercapitalized businesses become anemic, while an over dependence on venture capital can cede control of important decisions to investors which may erode the brand and weaken the concept.
Another activity associated with concept-to-launch is to map out a path for growth. Some companies scale too quickly and burn out, while others lose first-to-market clout by staying too small for too long. Recent research on tech startups found that 74 percent fail due to “premature scaling.” The study also found: "A startup can maximize its speed of progress by keeping the five core dimensions of a startup Customer, Product, Team, Business Model and Financials in balance. The art of high growth entrepreneurship is to master the chaos of getting each of these five dimensions to move in time and concert with one another.”
In all of these activities the first-time founder must communicate clearly to different constituencies: investors, target customers, employees and contractors, suppliers and other channel partners. You will breathe, sleep, and eat the business idea throughout this phase and must represent the brand with clarity and conviction at all times. Leadership is always important, but in the early phases the founder shoulders the greatest responsibility and commitment to success.
A majority of startups never make it to commercial launch because they underperform in one or another of these facets of early phase concept development. They fail in developing a brand, defining a need and a market, in developing operational skills, in the domain of financing, or in scaling the business after launch. Applying best practices in this phase can make the difference between a solid foundation for launching a rocket or burning out on the launch pad.