How to Build a Successful Startup From App Idea to IPO

December 2, 2016 - 10 minutes read

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When the founders of AirBnB pitched their idea to Paul Graham at Y Combinator, he wasn’t initially impressed. On top of being late, the applicants had an idea that sounded, in his Graham’s own words, “weird.”

But at the last second, he decided he saw grit in the group, and offered to help them turn their concept into a functioning business.

How did Graham turn a failing left-field idea into a multi-million dollar business in a matter of months? And how has he achieved this feat again and again with once-struggling companies like Dropbox, Reddit, and dozens of others?

Luckily for the rest of us, he details his philosophies and blueprints for startups success in a variety of essays on his personal website. In “how to start a startup,” he lays out a specific and actionable blueprint for how the think and act if you want your iPhone app idea to succeed.

For today’s post, we’ll lay out his method, and add some updated advice based on our experience in the mobile app startup arena.

1. Innovate, but don’t replicate

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This is a funny rule for starting off a startup blueprint, but it’s perhaps the most serious. Companies that succeed big in tech all have one thing in common: they made something new rather than copying something that already existed.

Sure, your app idea can be similar to an existing one (think Myspace vs Facebook), but it has to innovate in some unforeseen way.

To do this, don’t be content to imitate and replicate other businesses. Always be looking to the future, thinking about what will be commonplace in one, two, or ten years — rather than what’s commonplace today, or yesterday.

2. Solve a problem

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Above all else, NYC app developers have to solve problems. Even seemingly frivolous mobile apps solve problems for their users: games solve boredom, and Facebook solves group communication. Uber solves getting a ride when you’re not on a traditional taxi throughway.

Train yourself to always look for problems in the status quo, or things that are “missing” from the world. Any complex, convoluted consumer experience is a prime opportunity for improvement with a great app idea.

3. Write everything down

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Whether it’s Evernote, Google Keep, or an old-fashioned pocket notebook (check out Field Notes), keeping a log of your thoughts and ideas is a common feature of successful entrepreneurs. Inspiration, when it strikes, must be recorded.

4. Start with the prototype

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Making a prototype doesn’t have to take a long time, and can be an incredible tool for validating an idea, gaining investors, and conducting early user testing.

We recommend checking out the Google Sprint framework if you’re new to this idea — their method for 1-week prototyping is highly valuable for all kinds of startups, from iPhone apps to hardware products.

5. Show your prototype to at least 100 users

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Ideally, this should be a mix of friends, colleagues, and strangers. Observe how they interact with your app interface closely, and record any input they have.

Chances are the things they stumble on will surprise you. Using at least 100 test subjects will give you a broad enough sample to notice patterns in how people approach the product.

6. Iterate

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Don’t just sit on all this user data — build a new prototype or tweak the existing one to make a product that solves the recurring problems and makes users excited. You can repeat this step as many times as it takes to land on a prototype that suggests your final app will work, and be worth investing serious money in.

7. Establish a co-founder

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Virtually none of the companies Y Combinator has coached were able to succeed without a co-founder. Single founders run into problems on many levels of the app development process.

First, they’re more likely to quit when the going gets tough. Second, they’re less likely to be taken seriously be venture capitalists. Third, they’re less likely to consider visions and ideas outside their own, which can be a detriment. Finding a co-founder who share your vision can be tricky, but it’s worth it in the long run. Paul Graham described failing to find a co-founder as one of the top 18 startup killers.

8. Register your company and consult with a lawyer

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It’s important to make sure everything your app idea is doing is square with local regulations, as well as ensure that early team members have everything they will receive so far as equity and salary clearly in writing.

Consulting with a lawyer looks expensive on the surface, but it’ll save you from legal headaches that could literally destroy your app idea.

9. Raise funding

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Raising venture capital is no easy feat, and their are a variety of ways to go about it. We’ve written on it extensively before, so go check that out for details on strategy and sourcing potential investors.

Also consider alternatives to raising capital from outside sources. Companies like Mailchimp have been able to grow sustainable software businesses by bankrolling the early development costs with outside businesses like agencies.

10. Build out your MVP

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The term “minimum viable product,” or MVP, is critical to understand for newcomers to app development. Essentially this refers to the core set of features that are absolutely required for your idea to work.

It’s easy to get caught up in adding “fluff features” or extra platforms when what ultimately matters is convincing users your app is worth downloading. The simpler it is, the more likely they’ll be to do so.

Most app ideas require complex custom code and professional design services if they are going to succeed in the app store, so this is the stage when most startups partner with an app development agency to shepard their idea from prototype to finished product.

11. Launch

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This is where your marketing skills, or your partner agency’s marketing team, come into the picture in full force. Around 1,000 apps are launched in the Apple App Store alone every single day. To rise above the masses, you’ll have to use cutting-edge growth hacking techniques and leverage your network as fully as possible. Reaching a critical mass of users isn’t easy, and just like in the app design phase, outside-the-box thinking will pay off.

12. Conduct user research

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Real-world users are even better than prototype test subjects. You should have a framework in place to monitor their activity, respond to their needs, and catalogue everything so improvements and updates can be made over the coming months.

13. Launch again, and again, and again

Iterating the product is crucial to success, and the first launch event is just the beginning. App updates should happen regularly in the first year, letting users know that you hear their input and are working to give them the best product possible.

14. Grow

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Paul Graham suggests that a startup should strive to grow 5% every week. That may not sound like much, but it puts you at 25 million users within four years. This isn’t realistic for many small app developers, but it’s a great goal and really puts in perspective the fine line between a small-time app and the “next Uber.”

15. Establish a clear vision of “success”

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Most important of all, startups founders need to have a clear vision of what “success” looks like for themselves and their team. IPO? Aquisition? Stay small and focus on team happiness?

Whatever your goal is, it must be clearly communicated within your company and driving every action you take along the way. Be realistic, but don’t be afraid to let your app dreams reach for the big leagues.

Success takes many forms in the tech world, and finding what path yours will take is even trickier than building a killer app.

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