How This Affects the Likelihood of Meeting KPIs Growth Before the Next Investment Round
Every startup knows what it’s like to develop an MVP (minimum viable product). Many startups strive to get their MVP done in order to present it to potential customers and investors, and to get as much feedback on the product or service as possible so that the team can improve it in the meanwhile. However, dozens of startups are failing before they can even approach the market. Therefore, it has become essential for startups to develop an MVP. This will have a major impact on their chances of advancing to the next round of investments and receiving all the necessary resources for developing the final product.
Who can be more experienced in building an MVP for a startup if not startups themselves? The great thing about building an MVP is that a startup can reach out for help and consult another to accelerate the whole process. All startups are in the same boat; trying to succeed and avoid early failures. In this case, companies that once were in that same position have been down the same road and are therefore the most qualified to develop MVPs for a startup. This will serve as a great foundation for future success of the startup and will give the emerging company a great chance of receiving investments in the next round.
What Is An MVP?
A minimum viable product (MVP) is a product that includes only its most basic features and functions that can still be used publicly. An MVP should be built in a short period of time, yet it should include all the essential features of the product in that early stage. It is then released to users and stakeholders in order to receive relevant feedback on it. It is then improved until it reaches the final stage. This allows a startup to realize whether their idea works without having to spend their entire budget and use up all their resources.
The MVP’s Intentions
Developing an MVP helps keep the balance between what a startup wants to offer to the public and what users actually desire. The MVP allows a startup to receive valuable feedback from users, identify the flaws/strengths of the product, and use that information in the next implementations. The whole idea behind the MVP is to start building something before building everything. The minimum viable product is a sort of a test that shows whether or not a startup is developing something that can be useful for people.
How Do (Ex-)Startups Help Other Startups?
Launching a startup is a brave thing to do that not everyone has the guts for. A startup is a venture or a company that mostly focuses on a service or product that the founder is seeking to put out into the market. Initially, startups usually don’t have a fully-developed business model and are most eager to find investors who will finance their ideas. One of the main things that startups tend to focus on in the beginning is developing an MVP. It takes time and effort to develop an MVP good enough to release to the public and to pitch to investors.
In this case, a great solution for developing an MVP quickly and with the least number of resources is to ask for help from an ex-startup, or even an existing one. Former startup companies have gone through all the same processes of developing an MVP, pitching their ideas to investors, using sufficient resources, planning, seeking feedback, etc. All these have made ex-startups successful and most importantly, experienced.
Our company, Ptolemay, is also an ex-startup that has grown over time into a great company that now develops mobile applications and consults startups in the IT field. We are a mobile development company that mainly focuses on helping startups develop apps for their product/service by using all our experience and putting a lot of effort into using said experience to help new startups resolve their problems.
What are KPI and Investment Rounds?
The Key Performance Indicator (KPI) is a metric that describes how successfully a company accomplishes their key business objectives. Startups use KPI to assess their effectiveness in reaching organizational goals. Every company chooses different metrics to track, depending on their targets and industries. When a startup chooses the right ones, they set goals for themselves over a period of time, and the KPIs evaluate how successfully the startup has been achieving its key objectives.
When KPIs are correctly established, they serve as a clear and analytical snapshot of the startup by which potential investors can understand the current state of that company. Startups are determined to track and achieve significant growth in their KPIs and show off their remarkable success to investors in the next investment rounds.
Startups do not raise much money at the beginning of their launches. Startups have to go through multiple investment rounds in order to finance their ideas. The investment rounds include pre-seed (selling just the idea), the seed round (mostly for research and product development), rounds A, B, C, and more. The investment rounds after these take place when startups have some legitimate evidence of success. Through these metrics, investors can assess how previous capital was used for further development, which is valuable information since they will be investing tens of millions of dollars in these rounds. Once a startup begins to succeed and expand, each following investment round serves as a foundation for future advances.
How Does Help from Startups Influence KPI Growth and How Will It Help in the Next Investment Rounds?
When a startup asks for help from an ex-startup, it is the same as a child asking for help from their parents. Ex-startups are more experienced, they know how the industry works, and they will be most effective in helping to develop an MVP. This will allow startups to become more integrated into the industry and allow for identification of its key objectives. Ex-startups can consult starting companies and help them set and track relevant KPIs as well as give a brief example of how to pitch their idea to investors. With all this taken into consideration, startups will gain enough experience and the appropriate amount of information to develop an MVP, establish and track correct KPIs, and be prepared for the next investment round.