Turning an idea into a business can be one of the most fulfilling and rewarding challenges of a lifetime. It’s not easy, but the skills and experiences required to start a business are learnable.
Great entrepreneurs are made, not born. Hard work, drive, and absolute determination can make up for gaps in skills and experience. The rest is learned by doing, making mistakes, and adapting along the way.
Wilbur Labs is a startup studio turning bold ideas into market-leading companies. Since 2016 we have launched and invested in 15 technology companies, including VacationRenter, Vitabox, Joblist, and Barkbus. Today, our portfolio companies have hundreds of millions of users from around the world, and have generated billions of dollars in sales. We plan to launch several companies every year.
One question that we’re constantly asked is:
How do you turn an idea into a business?
Launching a business is typically a one-time event. At Wilbur Labs, it’s a repeatable and systematized process. Turning a bold idea into a business – over and over – is what we do. Over time, we have defined several critical steps that are key to effectively turn any idea into a business. We’re sharing that playbook with you to help you on your journey.
Note: This guide assumes that you already have an idea for a business. Coming up with an idea for a company is a separate topic covered in our How to Get Startup Ideas Blueprint.
Step 1: Research
The research stage is where you pair your initial idea with independent and external information. This should include first-hand research, speaking with industry experts, and talking with target customers to answer key questions:
- What problem are you trying to solve?
- How big is this problem?
- How would this make people's lives better?
- Why are the current solutions not optimal?
- Who are the competitors?
- What is the business model?
- How big of a business could you build?
- Are you the right person to solve this problem?
- What advantages do you have in solving this problem?
- Do you care about this enough to work on it for 5+ years?
- What are the outstanding challenges or questions?
During this stage, you should talk with as many people as possible. You will be surprised how many target customers and industry experts are receptive to cold outreach to discuss a business idea. We recommend using LinkedIn or Twitter to source experts who know the problem you are trying to solve, and ask if they’re open to having a quick chat to discuss your idea. Many people passionate about an industry or a problem love talking with others who are equally as interested.
In addition to cold outreach, you should also use your personal network to reach out to any existing industry contacts who may be helpful – or know people who might be helpful – in researching this idea.
Be cautious about asking business advice from people close to you, because it’s unlikely that you will get truly honest and critical feedback. Expect pushback because it’s unlikely that everyone will love your idea, and that’s okay. Some of our boldest ideas received mixed feedback in the beginning. The point here is that you hear multiple viewpoints and use feedback to guide your research and planning.
Make sure to go very deep on your research during this stage. Some of our ideas remain in this stage for 6 to 12 months. Ideas are easy and everyone has them. This stage helps filter out the so-so ideas to prevent you from wasting time in a later stage. Frontloading research and due diligence here can also reduce risk and expedite future stages.
The best business ideas will bring a sense of urgency and motivation, pushing you to keep moving forward. If you are able to gain significant momentum through research, it makes sense to move into the planning stage.
Step 2: Plan
In the planning stage you should focus on taking your learnings and creating an executable plan. This will require diving deeper into the areas you looked into during the research phase, as well as answering new questions.
At Wilbur Labs, we create a “Concept Evaluation” which is our own version of a business plan. Whatever format you choose, it’s important to have a written plan that organizes all your research into an actionable plan that looks at every angle of your idea.
We like to work backwards during this stage, thinking about how we want the business to look 3 to 5 years ahead and then build a roadmap to get there. In our Concept Evaluation, we answer a number of questions, including but not limited to:
- What does the product look like at launch, year 1, year 2, etc?
- How will you get customers (marketing/distribution)? How much will it cost?
- What are the sources of revenue?
- What’s the expected lifetime value of a customer?
- How will you retain customers long term to boost lifetime value?
- Where is the break-even point (cost) of this business?
- Where is the break-even point (time) of this business?
- How do you solve the challenges you identified in the research phase?
- What initial investment is required to get this off the ground?
- How much time will it take to get this off the ground?
- What investment is required over the next 3-5 years?
- What’s the optimal funding source?
- What partnership(s) will you need?
- What type of infrastructure will this company need?
- What team is needed to build and grow this business?
- What advisors could you reach out to for help?
In addition to answering the questions above, our Concept Evaluations also include a product roadmap/gantt chart, financial model, and start-up checklist.
The product roadmap and corresponding gantt chart provide a simple, but tangible way to look at the different work streams that will be a part of each phase of the business. The key here is to plan out dependencies, so you can parallel process and avoid bottlenecks.
You won’t be able to do everything on day one. The important question to ask yourself during this planning stage is: what is the Minimum Viable Product (MVP) that you can launch with and how do you build on that MVP post launch? We are believers in launching as soon as possible to collect real customer feedback and use that to evolve the product along the way.
Our financial model is built using assumptions we find on our own, or inputs from industry experts. While this model is likely to change in the real world, we want to keep a close eye on the economics and the break even point. This is used to forecast the growth plan, timing, and investment level required.
Funding is a separate topic on its own and there is no universal best practice to finance a business. As an entrepreneur, you will need to look at a number of factors, including your personal situation, business cash requirements, and long term plan. It’s worth spending time with advisors or mentors to discuss the best funding option for your situation.
We love checklists and have a checklist for everything. Checklists ensure consistency and completeness in carrying out a task. Checklists also allow you to frontload all the planning so you can focus on executing at the next stage. For our startup checklist, we include everything required to get from day zero to launch day. This includes corporate structuring and entity formation; legal and accounting prep; compliance, hiring, product building; distribution and marketing; operations, partnerships, and business development. We are extremely thorough and write out every critical task, corresponding notes, status, and owner.
Before moving on to the next stage you should ask yourself, “Do I want to spend the next 5+ years of my life building this business?”
More often than not, entrepreneurship is not a way to get rich quickly. You will likely need to work harder and longer, with higher stress and more at stake than working a regular day job. The journey is absolutely worth it for the right person, but it’s important that you go into it knowing what to expect. Many companies die early due to missed expectations on what it takes to start a company. If possible, you can start out part-time and build traction before diving in full-time.
If you want to dedicate years of your life solving this problem, and building a business along the way, then move on to the execute phase.
Step 3: Execute
Every single person has ideas, but very few take the jump and start a company. The execution stage is where you leave the planning stage and take that jump. You have spent time researching, putting together a plan, and you are now ready to dedicate time to building a business.
Depending on the type of business, this stage will look very different. In all cases, this stage involves working through your plan, roadmap, and startup checklist to begin getting your idea off the ground.
The primary focus of this stage is prioritization. Prioritizing often will allow you to manage bottlenecks and work in parallel across different areas of your business. The goal is to align your input (time & money) with the activities that will yield the highest output (progress on your plan). This is easier said than done, but it is absolutely critical to execute your plan in an efficient way.
If you need to raise money or get funding, this is the stage where that could happen. This is also the stage where you may need to start building your team by hiring contractors or employees.
Step 4: Adapt
Roughly 90% of businesses fail, and this is the stage where that usually happens. One thing’s for certain in starting a business: you will never be able to create and follow a bulletproof plan. As your business takes off, you’ll need to constantly adapt and change your plan. The best entrepreneurs are comfortable being uncomfortable, adapting as they go.
The optimal “go live” point will vary by business. At Wilbur Labs, we strongly believe that getting customers to vote for products and services with their wallet or with their time is by far the best measure of product-market fit. If customers won’t spend time or money on your business, then you either have some other issues with the product or with the problem you are targeting. Building in a silo for a long time without customer feedback or product testing rarely makes sense.
The number one indicator of success during this stage is how quickly a company iterates and adapts. The focus should be on survival, solving one challenge at a time. With each challenge you solve, you reduce risk and increase the odds of survival. At Wilbur Labs our mindset is to “build the plane as we fly it,” and this is the stage where that happens most.
During this stage, it’s also really important to surround yourself with a strong support system of advisors or mentors who have been here before. Many problems you will face have likely already been solved. If you can learn from others instead of having to reinvent the wheel yourself, you will have more time to focus on solving the problems unique to your new business.
The adapting stage technically never ends, but it is much more critical in the early years when you are fighting for survival each and every day.
Step 5: Grow
Growth is an important part of any business. However, all growth is not equal. The focus here should be on driving sustainable growth that makes sense for your business. Each business is different, and the optimal path looks different.
As you grow, you will continue experiencing short term emergencies and challenges. You absolutely must solve these to keep pushing forward. However, you also need to look ahead months and years, and plan ahead:
- What challenges are ahead? How do you prepare for them?
- What skills do you need to improve to keep growing your company?
- How is your role as an entrepreneur changing as the company grows?
- How should your team evolve as the company grows?
- How do the financials look?
- What can you do to make sure you don’t run out of money?
- How are you tracking towards break-even and then profitability?
- What are your competitors doing?
- How are your employees doing?
- What are your customers saying?
- What mistakes have you made and how can you avoid them in the future?
The ability to get super involved in solving the short term challenges, while still planning and leading into the future is a very critical – yet rare – skill. There's a common belief that someone is either good at high-level strategy or good at detail-oriented execution. This couldn't be more false. Doing both is necessary, and the best entrepreneurs do both on a daily basis.
When good news hits, you can usually just accept it. When bad news hits, you need to be prepared for it. During the growth stage, a lot of effort should be spent on mitigating future obstacles, and planning a path ahead for your business.
You will make a lot of mistakes running a business, and that’s okay. The key is to learn from the mistakes and use them to improve your process for the future. You want to avoid making the same mistake twice, or making careless mistakes that could have been avoided with smarter planning. Keep in mind that many entrepreneurs need several attempts at launching a company before they are successful. There is a reason for this: experiences and mistakes are the best teachers, and these types of lessons take years to build and compound.
At Wilbur Labs, we believe the best companies solve big problems. Startups and small businesses are the foundation of modern economies, and help build the future. I hope sharing our process will help you on your own entrepreneurial journey.
Make sure to follow Wilbur Labs on LinkedIn, Twitter, Facebook, or Instagram, as we continue to release more blueprints in the future.
Want to work with us or have an idea? We are always looking for talented people to work with and exciting projects to partner on. Feel free to check out our available openings or contact us.