Via Forbes : In the good old days, well before the internet era, businesses moved at a glacial pace. It took decades for the most successful companies to reach $1 million in sales (Proctor & Gamble took 22 years), or receive a billion dollar valuation. (Ford Motor Company was deemed a billion dollar company after 21 years.)
But thanks to the impact of the World Wide Web, we’ve witnessed unprecedented business growth, especially in Silicon Valley. eBay got to a billion in revenue in only six years whereas it took Sotheby’s about 240 years. Twitter became a billion dollar company in a little over two years whereas CBS took 66 years. Attracting millions of customers can be done in a matter of months: Facebook reached a million users 10 months after its launch in 2004, and Instagram had a million downloads in 2.5 months in 2010.
If those large companies can reach millions in months, there’s no reason that your business can’t become viable in days. Everything is happening faster, including what was previously the slowest and most cumbersome task of starting a business: fundraising. If you think tactically, utilize new technology, and take advantage of new funding rules, your company will be off and running by the end of the week. Here’s how:
Day 1: Shrink Your Business Plan
It used to be that the tried and true method to creating a successful business was to think big: create a business plan that shows evidence of a massive consumer market or a billion dollar revenue opportunity just waiting to be tapped. Things have changed. You can still make a billion dollars, but the best way to do it is by narrowing your focus, not broadening it. Shrink your business plan into the simplest conceivable idea. Address the smallest problem or need in your space. Twitter exploited the fact that Facebook didn’t have a status update; Snapchat saw that neither Twitter nor Facebook was private, and each company swooped in with a narrow solution. Both Twitter and Snapchat started very small, with very simple ideas that met a single need.
The bonus to thinking small is that it reduces your need for capital, which is critical in the startup stage. A small upfront capital investment with the potential for big returns will always be more attractive to investors—and more feasible to raise on your own—than the billion dollar idea that will take a hundred million to fund.
Day 2: Beg And Borrow
I’m a big proponent of putting in everything you’ve got first; I hate the idea of using other people’s money without being personally vested. First put all you can afford into your startup. Then, and only after you’ve put in all you have, go to your mom, dad, grandparents, cousins, and friends to scrape up more money. And because of your day one work, you don’t need that much money anymore. The good news is that it’s cheaper than ever to start a business. You can get a computer for $200, a domain for $10, cloud storage space for less than $100. Most importantly at this stage, raise enough to buy time from a graphic designer, who you’ll need on day three.
Day 3: Make It Visual
Today is the day where you make the big pivot, from inventor (someone who has an idea) to entrepreneur (someone who has created a business). Forget a business plan or even a working prototype; what’s most important today is a visual representation of what your company will do. This could be a mock demo, a graphic prototype, or maybe just a visually appealing one-sheet. The goal here is to show how simple and obvious your business model is. Show the problem and how you plan to attack it and solve it in a way that people will pay for. Don’t overcomplicate things, don’t try to look smart, just explain things as if you were talking to your grandmother during day two.
Day 4: Fundraise
The process of funding a new company went decades with little innovation until recently. In the last five years, there has been a flurry of new activity that make raising money to start a business bearable. The last round of changes were brought about by the 2012 JOBS Act and went into effect last month, making equity crowdfunding legal. There are now three new, innovative ways to raise money worth considering. First, harness the power of the crowd through a loan from a company like Credibility Capital, Lending Club, Kabbage, OnDeck or Prosper. Second, if you have a product to sell, do so in advance through companies like Kickstarter or IndieGoGo. Third, leverage equity crowdfunding sites such as CrowdFunder or EquityNet to raise your own venture round without the burden of traditional VCs.
Use the visual you created on day three to attract the crowd to your project. But don’t forget, the name of the game is simplicity. Make the amount you raise as small as possible to get the job done. While it should be quick and easy, it’s still not free money, so raise wisely.
Day 5: Go!
While it sounds crazy at first blush, with the right idea it’s entirely possible to start a company in five days. Is it traditional? No. Will you raise billions? Probably not. But if a card game about exploding kittens can raise over $8 million in one week (yes, true story), you could raise a couple hundred grand to get your business off the ground.
Day five is, of course, only the beginning. You will have capital, an idea, and a slick glossy brochure. The real fun (and fright) comes in the next 2,000 days or so. It will be both exhilarating and exhausting, but that’s what being an entrepreneur is all about.