The path to creating a startup can be filled with obstacles, from securing funding to forming the right team. Jesse Bardo, an executive director in Startup Banking at J.P. Morgan, also founded a fundraising app for higher education, and understands these challenges firsthand.

“As a founder, make sure you want to go down this path, which can be incredibly difficult,” he said. “What is the problem keeping you up at night? Are you unable to do what you need to because a solution doesn’t exist?” 

“Why are you the one who has to create a solution? That’s the existential question that you need to answer,” he said. 

Once you answer those questions, you can focus on 10 key steps for how to start a startup.

1. Identify a problem or need

Before you create a startup, you need to identify a problem that needs solving or a gap in the market. 

For example, Grant Lee co-founded Gamma to fill the gap of traditional slides and presentations after spending significant time and effort designing slide presentations—something his tech and financial experience made him uniquely qualified to do.

Just because the potential founder faces an individual problem doesn’t mean it’s a widespread market concern. “There’s always somebody who can't get a certain type of food delivered to their dorm or wants get their laundry folded," Bardo said. “When you look deeper into that, the problem is very much solved or the potential founder is an outlier.”

2. Conduct market research

Conduct thorough market research to identify your potential customers and their preferences, and ways to differentiate your startup. 

Market research often starts with the founder. “With market research, not only are you going out to talk customers, but you’re also understanding the competitive landscape—who around you is already trying to fight this fight,” Bardo said. “It helps to be a domain expert, so that when you identify that problem, you recognize the landscape and you’ve got the network to go and conduct the research.” 

Market research should also involve many potential clients. If you have a consumer product, talking to 100 potential clients is ideal, Bardo said. That’s not always practical for business-to-business (B2B) startups, which should aim for at least 15 potential clients. “People think of ‘traction’ as somebody who’s actually purchasing,” he said. “But it actually happens even earlier. It’s when you talk to people and you get signals from those people that there could be some buyer intent, depending on what you’re trying to sell.”

3. Develop a business plan

Your business plan acts as a roadmap for your startup and should outline your objectives, target market, products and services, and competitive landscape among other elements. 

“Ultimately, your business plan is a thought exercise to show people that you know what you’re building and where you’re trying to take it,” Bardo said. “The business plan should articulate your directional path to others.” 

“A lot of startups are great in the founder’s head,” he said. “Socializing the business plan is an important step to determining the product’s—and startup’s—viability.”

4. Establish a legal structure

Creating a startup may involve several legal steps, but one of the most important is incorporating your startup. Before your startup becomes an C corp or other legal entity, consider how the structure will impact your ability to raise capital, manage operations and protect personal assets. You should also determine where to incorporate your startup.

You should also establish a legal structure early in your startup journey. “You can’t effectively hire a team or secure significant funding if you don’t have a legal structure for your startup,” Bardo said.

5. Build a minimum viable product

Based on your market research, you can develop a prototype to test your concept. Be sure to prioritize efficiency, with a focus on building a basic version that can solve the core problem. From there, test the prototype with real users to gather feedback on usability and functionality. Use this feedback to refine the product’s design and functionality to better meet user needs and expectations. From there, you can develop your minimum viable product.

6. Secure funding

There are multiple funding types available to early-stage startups. Some startups secure seed funding by raising an unpriced round—usually in the form of a convertible security—or a simple agreement for future equity (SAFE) note, which gives the holder the right to obtain equity at a later time. 

Other early-stage startups can avoid equity dilution and bootstrap using early profits, crowdfunding or personal savings, credit cards and loans to fund their company or obtain funding from family and friends. Founders can also explore angel financing, which involves someone who invests money in the business in exchange for equity or convertible debt. 

7. Assemble a team

“The best founders are the ones who are smart enough to recognize that they’re not going to be the ones doing everything,” Bardo said. “They hire folks who are smarter for the positions around them.” 

“Especially early on, the first 10 hires are so important,” he said. “In the past, a lot of those positions needed to be technical ones. With tech advancements, the first positions are more likely to include someone knowledgeable about the product and industry.”   

For example, a healthcare startup will need someone who knows the healthcare system, such as a doctor or administrator. A startup developing a marketplace for lacrosse equipment, however, may hire a former athlete or someone with knowledge of trade magazines and conferences. 

“At my company, the first hire we made outside of our startup team was a head of customer success,” Bardo said. The startup hired someone from one of the universities on the platform who was knowledgeable about the schools. “She really it gave us a lot of validity within the market,” he said. “That hire also helped us tell their story internally and build the right products.”

8. Develop a brand and marketing strategy

When building a startup, it’s critical to execute a brand and marketing strategy to generate awareness and attracts customers. Using market research and other data, identify the most appropriate marketing channels for your target audience and create clear, compelling messaging that addresses the audience’s needs and interests.

There are a variety of marketing approaches a startup may take, depending on the industry. For example, a skincare startup may find success working with social media influencers to promote the product, whereas a SaaS startup may benefit from sponsoring trade shows and other industry events. 

9. Launch your product

Before launching your product, determine what success looks like. That can look different for B2B and consumer product startups. “Where should you spend your time, energy, efforts and dollars?” Bardo asked.

A B2B healthcare startup, in particular, may want to focus on its early clients, weighing the pros and cons of working with midsize hospital systems versus a major health system. Relationships with smaller organizations may take more time to develop, while working with larger organizations could establish the business as an extension of the hospital system and limit growth options.

Alternatively, a startup selling consumer products may want to focus its efforts on its social media following and influencer relationships to build brand and product awareness and ultimately gain customers.

10. Gather feedback and iterate

Throughout the process of building your startup, but especially after launch, you should gather feedback from customers and make improvements to your product or service. 

Perhaps more importantly, your customers’ needs will likely evolve over time.

“The best founders, the best startups are constantly iterating,” Bardo said. “These companies work to understand changes in their customer preferences and stay ahead of those shifts."