You only get to be a “first time entrepreneur” once. First time entrepreneurs are always special. An old friend used to say:
First time entrepreneurs have a major advantage – they don’t question everything before they leap into the business
First time entrepreneurs have a major disadvantage – they don’t question everything before they leap into the business
If you are a “first time entrepreneur” cooking up your new business, try (honestly) answering these questions.
Disclaimer: The list of questions is more applicable to those that are planning to bootstrap their business. The list of questions, of course, is not complete. It’s meant to be a starter list.
1. What exactly is your idea?
Can you clearly articulate your idea? How compelling is your idea? Is it an idea whose time has come? Are you early into the game or are your late into the game?
2. Who will pay?
Chances are that your idea will be to create a new product or a service. Who exactly will pay for this product or service? Why? How much will they pay? Why do you think they will pay that price?
3. Why should someone care?
Yes, I am sure you have already identified a market segment. Whoever is your target, the key question is “Why should they care?”
The other way to look at this is to imagine that once you explain your complete idea, someone says “So What?”
What would be your response for the “So What?” question.
4. Why do you think you are the RIGHT person to execute on this idea?
While the idea may be brilliant and flawless, most often, the idea is only a tip of the iceberg. The bulk happens in the execution. What makes you think that you have everything it takes to execute brilliantly on this idea?
5. What are the roles of your team members once the business gets off the ground?
If you think of a startup group as crewmembers in a movie production unit, sometimes they tend to be stuck by a “Everybody is a Director” syndrome. Are the future roles for your team members identified? Are your team members comfortable with these roles? Are your team members willing to change (or step aside) when the time is right?
6. How are you going to split the equity?
One issue you have to deal with is the roles and responsibilities and the other one is how to split the pie amongst yourselves. Who is getting how much? What is the rationale behind this decision? Why do you think this is fair distribution? Do all of your team members think it’s fair?
This is an important question. I have seen instances where people work for more than a year without discussing this and at the end of the year, everyone wants to own more than 60% of the company.
7. How much money are you investing in the business?
Sometimes there is also a fantasy that just by working nights and weekends the business can be born. It may be possible but it is definitely not something that you can bank on. So, the question is “How much money are you and your team members investing in this new business?”
I have told this before but it is worth repeating – typically people are willing to squander their time but not their money (although time=money) So if you are just willing to put in your time and not a single penny of your own money – think again about your seriousness about this project.
8. Is anybody else doing it now?
If not, why not? Is there a reason why someone MIGHT have passed on this idea?
If someone is already working on a similar idea, how different will your company be as compared to the incumbents?
9. When are you planning to get into the business full time?
Yes, you have worked hard during nights and weekends to get the business off the ground? When will you leave your present job and join the business full time? What is the criteria used to determine this transition?
10. Do you have a mentor?
It all seems easy at the planning stage and if everything works according to the plan on the paper, then you don’t need to have anyone or worry. Unfortunately, the paper plan and real life are different and any new venture will be filled with surprises – good and bad. You need a mentor, a sounding board to work with. The questions you are reading are a small sample of questions a good mentor will ask and hold you accountable. It is worth your investment.
11. Why do you want to do this?
Each entrepreneur has a different reason to be an entrepreneur. What is yours? Once you answer this think whether becoming an entrepreneur is the only way to get what you want or become what you want to become.
12. How much does it cost?
It is our tendency to think only about the hard costs that are associated with the project. “Time away from family” is sometimes not counted as cost but IT IS A COST. Have you thought of all the costs (or “investments” for those with positive mental attitude) associated with this adventure? Is it all worth it?
13. What is success for you?
How do you know when you are successful? As you grow in this business several things happen – your dreams will grow, your opportunities will expand, problems will change and your needs will change. The key question therefore is “What should happen that will make you feel that you succeeded in this venture?”
Please answer this question with hard numbers rather than “something big” or “something remarkable” kind of answsers.