Prior To Becoming an Entrepreneur, here is a checklist to ask of yourself:
1. What is the problem I’m looking to solve?
All startups begin with this.
Is it a lack of opportunity to easily speak with classmates (Facebook)?
Don’t like the inaccuracy of search results (Google )?
Photos taken with a mobile phone looked boring (Instagram)?
Keep it simple!
2. Do I have the same problem?
Having the problem yourself allows insight into almost all areas of the business and an idea about what potential customers want.
If you don’t personally have the problem, it’s a major warning sign.
3. Is it already in the market?
If you’re looking to create small squares of paper that you can stick anywhere, that solution (Post-Its) is already available.
No amount of repackaging will disrupt the existing product.
If someone is already doing it in the way you’ve thought about, rather come up with another idea.
4. What’s the opportunity?
Business is about balancing risk and reward.
So what’s the upside to starting this business?
If the opportunity is not significant, make sure your risk is very low.
5. What is my risk to test?
A startup is nothing more than a idea, and the first phase of every startup is testing that idea.
How difficult (costly, labor intensive, time intensive) will the test be to conduct?
How many idea adjustments (pivots) should we reasonably make based on the opportunity?
6. Who is going to buy and why?
Getting people to part with money is incredibly difficult, and outside of your own family and friends, no one cares what you’re doing.
Get very specific about the type of buyers you’re trying to reach, their motives, and your ability to reach them.
What concepts are you going to use to get customers, and what is the cost to do so?
7. Can the concept be easily described and easily understood?
Nothing really complicated succeeds.
If your potential customers, employees, or partners can’t easily understand exactly what you’re doing, stop before you’re in big trouble.
8. How many gatekeepers are there to my success?
Business hierarchy, middlemen, and single-source suppliers all all hurdles to making a success.
Try to have the least amount of reliance on multi-layer sales situations, re-seller arrangements, or a single data source.
9. Am I offering a vitamin or a medicine?
While valuable, no one wakes up in the morning craving a vitamin.
Conversely, medicines address an immediate and important need.
Selling vitamins requires establishing the need first.
Selling medicine merely requires the presentation of a solution.
Which category does your product/service fall into?
10. What’s my cash requirement?
How much money will I need to be successful?
Whatever you just estimated, triple it.
How long will it take to start bringing in significant turnover?
Whatever you just said, quadruple it.
11. What’s my burn rate and runway?
Burn rate is the amount of cash you need every month to keep going.
Runway is the amount of cash on hand divided by your burn rate, which is usually stated in months.
A frequent mistake is underestimating the amount of cash you will need and overestimating sales.
Together, they end more than their fair share of startups.
12. Where can I turn for mentorship and advice?
There are lots of people who have done some aspect of what you’re trying to achieve.
They have the experience (and scars and stories) to prove it.
Learning from their mistakes and getting sound outside advise will be an important part to your success.
Where are those people, and can you access them easily?
13. Do you have the two most important skills?
You will need a combination of technical expertise and marketing.
While you don’t have to be a master at either, your company needs to have both skill sets.
If you don’t have these skill sets, how are you going to get them?
14. Who is going to handle accounting, taxation, finance, and operations?
This is the most often overlooked aspect of entrepreneurship and creates massive headaches very quickly.
Not having a good answer for who’s handling these necessary functions is not acceptable.
15. What are my real motives?
There’s a great chance you won’t make money, get famous, or accrue significant power in a short space of time.
If any of these motives is the primary driver, rather exit immediately.
Startups require passion and persistence, which flow from purpose.
Find your own purpose.
16. How comfortable am I with failure?
Startups are notoriously hard, and failure along the way is guaranteed.
The fear of failure is paralyzing and will lead you to make poor, shortsighted decisions.
Even if the startup succeeds, there will be plenty of broken promises, expectations which are not met, and disappointment.
Can you handle it with determination and grace?
17. Which of my responsibilities will be disrupted by starting this?
You don’t live in a vacuum.
You have responsibilities to your family, your friends, your community, and perhaps your current employer.
What will be disrupted by this endeavor?
Is it worth it?
Note: Your answers are just for you.
These are tough but necessary questions.
We all have flashes of what’s possible and sometimes delusions of grandeur, but startups don’t occur in theory.
Remember to be honest with yourself, and while you might paint a rosy picture publicly, never buy your own B.S.
These questions help you address the rubber and the road, ensuring you don’t get caught in a sexy dream that turns into a living nightmare.