Written by Jerred Ziegler.
Starting a successful company is a lot like doing a puzzle. You have individual pieces that need to fit together perfectly to make the big picture, and you can’t force pieces into places where they don’t fit. For most of us starting a puzzle, we dump out all the pieces and look for the corners, forming the foundation for the rest of the picture. Similarly, entrepreneurs need to establish their foundation before building their business, and Ohio Third Frontier is here to help through the state’s network of Entrepreneurial Signature Program (ESP) partners, incubators and accelerators. These tools provide technology entrepreneurs what they need to form successful companies. Greg Pugh is senior vice president of venture acceleration at TechColumbus, the ESP in central Ohio, and offers advice on the three things all startups need to succeed.
- Base of Customers: Entrepreneurs need to identify a group of people in the marketplace that are excited by and care about what they are creating. These customers have an interest in seeing the company succeed and will buy the product. Greg and his team at TechColumbus don’t even consider an idea a “startup” until the entrepreneurs have identified a base of customers.
- Comprehensive Team: Many entrepreneurs think they can do it all on their own, and that’s just not the case. A big part of starting a successful company is having the ability to be honest with yourself. The most successful entrepreneurs can identify their own strengths and weaknesses and fill in the holes with other team members. Without a team of people with the proper skills in place, a new startup won’t get off the ground.
- Money: According to Pugh, entrepreneurs typically underestimate the amount of money they need to start a business by 3-4 times the actual amount. It’s important to take into account things like prototyping, physical space, and wages of employees from the start so that you have a financial plan in place to allow you to grow rapidly.
One TechColumbus company that has leveraged these tips to great success is Vantage Point Logistics (VPL), a company that helps health care systems and universities manage their freight costs. Before starting to build their business, the founders of VPL did research to understand the market, how their product fit into that market, who their potential customers were and how they could attract investors. This research has paid off big time – VPL increased their revenue ten-fold in 2014 and hope to double their 2014 revenue in 2015. They’ve also added more than a dozen jobs to the central Ohio economy.
“My best piece of advice to someone hoping to create a startup is to not just start a company,” said Pugh. “Take the time first to decide if you should start the company. You should be focused on creating something that will have so much value to a potential customer that they would invest in your company based on the idea alone.”