Thoughts On

It’s a really, really tough question that I can’t hope to answer in a short essay.  Nonetheless, something I get asked about and think about a lot – so here goes.

Research

You need to know who the competitors are, what their products look like, who the customers are, what their buying processes are, what the industry experts say, how the macro economic environment is effecting everything, how your own solution would work (roughly), who your partners would be, etc.  This is serious research.  It’s important to write out a complete business plan (and have other people read it), interview people in the industry, recruit advisers, model out your financials, pitch to everyone that will listen, begin the product design, maybe even prototype a beta version.  I think good entrepreneurs can do this quickly so hustle through this like its your job.  You can’t make good decisions without good data – it’s the assumptions that will screw you later.

“Reasonably Viable”

All of this research needs to suggest that you have a “reasonably viable” startup opportunity.

It’s You vs. The World

Deciding something is reasonably viable requires both a solid business background (know the world) and a solid understanding of yourself (know yourself).  You’re basically trying to estimate how hard something will be to do and how good you will be at doing it.  For me, the process of looking at lots of different ideas, boiling them down to their core challenges and taking the first few steps at building those businesses was very helpful.  Continuously listening to, talking to, and reading about entrepreneurs also helped.  Finally, studying business case studies and theories (innovators dilemma) has been insightful.

Get Ready to Commit

I’m a pretty non-committal type of person myself so I can sympathize if you get hung up at this stage, but (as an ex-girlfriend used to say) you’ll never have anything significant if you can’t get past this point.  I think you need to:

• be able to realistically visualize yourself going through the series of steps that ultimately lead to success
• accept that it won’t be “easy money” (if it seems too easy you need to do more research)
• accept that there is no such thing as “easy money” (lest you get distracted when the next idea comes along)

Nothing is Certain
At this point you may find yourself trying to dissect exactly HOW viable something is.  This is inevitable and worth thinking about, but at some stage it becomes pointless analysis-paralysis.  Even the most thorough research is inaccurate or will be inaccurate 6-months from now.  If your business plan is truly “reasonably viable” then this won’t matter.  Suppose it turns out the market is $1.5B instead of $2B?  It just doesn’t matter to your tiny little startup.

Trust Your Gut

If you have multiple, reasonably viable ideas or are trying to decide if you should commit to one in particular, I think it’s time to go with your instincts and ask yourself the following questions:

• Do I like the industry?   -assuming you understand it
• Does the industry move at the right pace for me?  -nuclear technology moves too slow, social media moves too fast
• Do I enjoy the sorts of people in the industry?   -if you can’t stand engineers then don’t start a tech company
• Do people in this industry value what I value/have to offer? -graphic artists probably should not start solar companies
• Does the risk/reward match my own risk/reward style?  -some ideas have binary results (either $0, or $1B) and some scale more smoothly (maybe $100K, maybe $500K, maybe $1M, maybe $5M, maybe more?)
• Do I feel like the product is a worthwhile product? -helps to feel like you’re making the world a better place – otherwise, porn is very profitable
• Will I be able to play the role I want to play?  -there are no fresh MBA’s running venture funded cleantech startups

Doing what you love in life is super important and if you try to be too analytical about your options you’ll probably end up in a job you hate.  If you hate your job, you probably won’t stick with it through the tough times.  If you can’t stick with it through the tough times then your odds of success will be diminished.  And we don’t want that…

Good luck.

Tagged: business, entrepreneurship, Startup