My Startup Process

Since August I’ve been trying to figure out my next business.  I’ve started four other companies in my life – why should it be that hard for number five?  I’ve looked at over 40 ideas. I spent anywhere from a few hours to several days researching each idea.  They all suck for some reason or another but generally because they don’t fit in my box of constraints.  (I will share some of those ideas in future posts.)

Monday I’m a guest speaker at the USAFA.  I’m going to talk to the seniors in the management major about “How to pick the right business for you.” Since I’m living that dream everyday, and I need to prepare for my speech, I thought I’d try to put some structure around my activities.  Here is how I evaluate a business:

First are the constraints; questions I ask myself – the answers may be different for each idea:

•    Skills/Team – What am I good at?  Who can I recruit and what are they good at?  Skills and team are the same – you assemble a team to augment your skillset.  You can recruit folks after founding the business but I think to start a company you need to have a meaningful amount of talent on the founding team.
•    Commitment – What is my level of commitment in terms of time, personal resources and mental stamina to make the business a success?  This seems like a simple thing for most to answer, but when you dig in and really dissect the issue by asking probative questions, you’ll uncover vast differences between team members.  Whenever you see founders with conflict between themselves and / or employees – it’s largely the level of commitment is different.
•    Funding – Can I raise money for this idea?  This needs to be examined from two perspectives.  The idea may be good but as a founder you may not be able to raise money for it; that is you have no credibility in the space.  The flip side is, you may be totally backable as an entrepreneur but the idea is weak.
•    Passion – Do I love the idea (product/service)? Do I love the business of executing on that idea?  Passion for the product I believe is largely optional - most businesses sell boring stuff (unless your Apple or Victoria’s Secret – that may get boring too, I don’t know I just like the ads).  The passion that is critical to have is for executing on that idea.  You don’t have to like all the stuff about building a company, but you have to want to achieve some goal that allows you to endure the things you don’t like.  It’s different for every business but you need to identify the key activities that will drive success.  I’ve seen many more successful companies where the CEO doesn’t really “love” the product but they are absolutely hell bent on building a company to <x> in revenue or selling it for <y> millions or some other goal. That said it’s best to be passionate about both – it makes what you do more fun.
•    Other – Other stuff that’s important like: moving, time away from home, moral constraints (some people may have a problem running a strip joint others may not), desired money in the bank when it’s over, spouse’s opinion, and whatever else…

So that’s the box I create for every idea and see if it works.  If it does, then I take it to the next step, which is to build a quick and dirty business model – I’ll talk about that in another post

Comments

[Moncler Jacket switzerland]

So cute! I already like you on FB and also get your posts on Google Reader. :)