Originally Published 2008-01-10 22:30:59
- Know your competitors. Great ideas are usually not original. You might have a brilliant innovation, a giant leap forward in productivity at your fingertips, and be overflowing with creativity. Thereâ€™s still someone out there with the same idea. Thatâ€™s ok; donâ€™t panic. In fact, it probably even be a good thing because it validates your business model. Nevertheless, you need to know who they are so when youâ€™re pitching your vision of a web-based photo sharing application to Uncle Warbucks youâ€™re not thrown off when he asks how itâ€™s different from shutterfly or flickr.
- Have a grasp on your time to market. If youâ€™re starting a consulting business, youâ€™re time to market is probably somewhere right around zero. If youâ€™re trying to do commercial space flight like good olâ€™ Richard Branson, itâ€™s an awful lot longer. This is another way of asking, â€œwhen will I, as an investor, get my money back?â€ â€“ a question you better darn well have thought about. Youâ€™re an investor too.
- Figure out how much capital youâ€™re really going to need. Then line up multiple sources and ask for enough to handle your worst case scenario. If you ask for $500K and then come back every quarter for $250K more, youâ€™re going to be looked upon with skepticism and possibly even disdain, success notwithstanding. Ask for a couple million up front and nothing more, and even if you fail, you were the brilliant nephew (or niece) that made some mistakes. Remember your basic psychology.
- Get used to the idea that youâ€™re going to give away most of your company. Would you rather have 100% of pdrater.com or 0.1% of Google? If you want to go big and you donâ€™t happen to be Jim Clark or Marc Andreessen, youâ€™re first tentative attempts at entrepreneurship are mostly going to be channeled into creating a really really good job for yourself (CEOs get a pretty good salary last time I checked), not in creating a legacy. Give away the equity you need to so that youâ€™re not undercapitalized. And yes, youâ€™re still working for the man. Get over it.
- Sort out your pitches. I recall Guy Kawasaki saying (years ago) that a budding entrepreneur needs to have their three angel pitches down pat: elevator (5-15 seconds verbally), napkin (3-5 minutes with a simple diagram), and formal (powerpoint). I get emails almost every day from folks asking me my opinion on an idea. The truth is that most of them are good, but the pitch is so unrefined that Iâ€™m immediately skeptical. Thatâ€™s fine in this case â€“ I love picking apart business models, aftar all â€“ but the lesson is clear. If you canâ€™t, via only a concise, 3-4 sentence summary, explain the gist of your business plan and get me interested enough to engage, itâ€™s time for a rewrite.
- Know your customers. Who will buy your product, how much will they spend on it, and how hard will it be to reach them? The old adage that one should always go into business in a field they know well is largely based on this. If you can name your first five probable customers off the top of your head (even if one of them is your mom, as long as she is representative of your customer demographic), youâ€™re halfway there already.
- Be passionate. This doesnâ€™t mean you have to change the world. It does mean you have to believe in the business model so much that youâ€™ll fight passionately for its success. When Uncle Warbucks tells you no (and he will the first time, guaranteed), you have to feel in your gut that heâ€™s making the biggest mistake in his life. And heâ€™s already a rich guy!
On 2008-09-03 05:43:50 PDRater.com » New Retroactive Benefits Calculator Launched!!! said:
[...] Launch your idea, get feedback, make it better, keep doing it! As a friend of mine has delicately suggested, I’m no Google. This doesn’t mean I can’t learn from Google, [...]