Two of the most iconic founders in the world, Mark Zuckerberg (Facebook) and Bill Gates (Microsoft), launched their startups in college. In fact, many of today’s tech leaders built their very first projects while they were still college students.
If you have a great idea, a viable market and the passion to drive you forward, you, too, can transform your student project into a multi-million-dollar startup.
It’s easy to let your passion take over and develop grand plans for project-turned-startup, but it’s important to start small. Starting small gives you an opportunity to get validation from the market and your customers that you have a viable startup.
Once your customers start demanding more, you can start working on scaling up your operations. Demand is a great indicator of whether there’s room in the market for your products.
If you find that there isn’t sufficient demand, you can go back and re-evaluate your idea with minimal loss. But if you invest substantial capital and time into a failed project, the loss can be devastating both financially and emotionally.
So, test the waters. See if people want to buy your product, and if so, whether they enjoy using it. Scaling up as much you can helps ensure that you’re meeting market demands while keeping costs down.
Just get started
Starting small not only gives you a chance to test the market, but it also ensures that you get started. Far too many entrepreneurs suffer from analysis paralysis. They get so hung up on all of the details or strive for perfection that they never actually get anywhere.
Products are constantly evolving and changing, and your product will be no different. If you’re serious about turning your student project into a startup, then you have to take action.
Create a basic version of your product and launch it. Get feedback from your customers on your basic version and make improvements from there. Taking this route ensures that you’re building a product your customers actually want and need.
Don’t waste time building out a product when you have no validation whether you’re on the right path. Start with the basics and evolve your product based on market and customer feedback.
Treat it like a real business
If your goal is to transform your side project into a multi-million-dollar startup, then you have to treat it like a real business. Commit yourself to the business. Startups don’t build themselves.
Yes, school will keep you busy, but find time to commit to your business at least 4-5 times a week. If there are multiple people working on your project and your subsequent startup, make sure that everyone can participate in these meetings.
Organization and planning are the keys to success with any business, so make sure that everyone has a job. Assign leaders for meetings, and make sure that you have plans of topics you want to cover during each session. Plan your route to success together, and stick to the plan.
If you don’t take your project seriously, how can anyone else take your startup seriously?
Outsource to professionals
One of the biggest challenges startups face (aside from funding) is finding the right talent to get the startup off the ground.
You may have a group of talented people working on your student project together, but your group may be lacking in some vital skills that you need to make your startup a success. Outsourcing to professionals is a practical way to accomplish tasks when your team is lacking certain skills.
If your startup needs software, working with a company like Redwerk, which offers software development for startups, can help you move forward with your project without wasting valuable time. One advantage of outsourcing is that you’re handing the task over to an experienced professional who can get the job done typically faster and more efficiently than an in-house team might achieve.
Work with school programs and offerings
Student projects have led to some of the biggest businesses in the world. Google and Facebook were both projects that the founders of these companies started in school. Google started at Stanford.
When you start a student project, you can rely on many colleges or universities to offer assistance.
Professors in the school often have networks of people that they work with that are waiting for the next big startup to form. Schools may also have incubators that allow projects to receive some funding and a lot of additional resources that can help them grow.
The key is to keep your project growing and to bring the attention of the project to your professors.
If you’re not using the resources available, no one will simply provide them to you without you asking. A few of the many resources that may or may not be available for student projects are:
- Education on starting the business and all of the legal aspects of the business that must be considered. Professors that understand law, contracts and business can assist with the creation and running of the business.
- Funding is available to students that can help them gain traction through funding. Accelerator programs often offer funding and can help a startup grow into an organized, robust business. These programs often end with investors that want to invest in one of the school’s startups.
- Resources that can help with everything from writing a business plan to developing a marketing plan or applying for loans. Ask your school what resources they offer and how you can begin using them.
Schools are full of resources that can help a small student project grow into a million-dollar startup. Speak to your school’s head of business to learn about the programs that may be available to you.
Accelerator programs are growing rapidly across the world and are responsible for some of the biggest businesses on the stock market today. Through accelerator programs, it’s possible to grow your network and meet individuals that will help your business grow.
It’s equally as important to keep an open mind and work with your classmates that show interest in your business. A lot of people have talent and skills that you can use to grow your business, but you need to let them be a part of your growth.
You’ll eventually come to a point when you’ll need to decide whether or not you’re willing to allow an investor to purchase equity in your company. There’s also the option of securing funding using a multitude of resources (most resources here are USA specific but general concepts apply for the UK).
Traditional loans and lenders
If you have a solid revenue history and plan, you may be able to seek funding from your bank. The loan will have to be repaid, but you’ll not give up any equity or control in your business. A solid business plan and revenue projections may be required to secure a loan.
The Small Business Association also offers micro loans, which have great rates, are backed by the government and provide financing of up to $50,000.
Private investors may want to invest in your business, but they will have lower capital to do so. Investments from angel investors are usually between $25,000 and $100,000, but this figure may vary depending on your needs.
When working with an angel investor, the investor will often play a larger role in your business and may also want to have a seat on your board of directors.
The right angel investor will offer invaluable experience that can help your business grow.
If your business is rapidly growing, venture capitalists may be willing to provide investments to help your idea grow to fruition. Funding can be as high as $10 million, but this level of financing will require repayment in the form of interest or a percentage of equity in your startup.
It’s integral that you sit down and determine whether the equity given up matches the potential investment in the business.
Friend and family
A lot of the world’s largest businesses have been financed by someone’s friend or family. Now, there are a lot of examples of companies in the startup phase that match this description, but there are very few companies as massive as Amazon that have been funded this way.
Jeff Bezos was running Amazon out of his garage when he started to run out of money.
What did he do? He chose to ask his parents for the money. His mother and father invested $245,573 into the company. In 2018, that investment would be worth $30 billion. And today, with the company’s stock soaring in recent years, this value is much higher.
The only downside is that you might lose your friends’ and families’ investment. It’s important to make it abundantly clear that the money invested is not likely to be returned – there’s a major risk of failure.
Launching a startup is difficult, especially when it’s a student project. You’ll need time, patience and a great idea that has the potential to be worth millions of dollars. While there’s no guarantee of success, the above points will help you grow your student project into a viable business.