My first blog post about starting a new company was about my thoughts on the need to DESIGN your startup in such a way that the main forces driving your business are as much aligned as possible. I called it "Don't swim downstream, swim upstream" principle. In other words, don't run with any cool idea, pick a business where "the stars are aligned".
My second blog post is about the first few critical steps forward. This is the phase where wild ideas are being explored and your business is being born.
ASSESS YOUR OWN FINANCIAL AND PERSONAL CIRCUMSTANCES.
- Can you afford to be without an income for at least a year?
- Do you understand your decision's impact on your family?
CONTROL RISK BY CREATING A FEW KEY MILESTONES THAT YOU NEED TO MEET TO BE COMFORTABLE TO CONTINUE.
- When would you like to complete your due diligence?
- When do you want to find a business partner?
- When do you want to have a mockup of your idea?
- When do you want to have investors' presentation and a website?
- When do you want to form an advisory team?
- When do you want to raise seed capital?
ASSESS YOUR OWN MENTAL READINESS. REMEMBER THAT MOST SKILLS CAN BE SELF-TAUGHT AS LONG AS YOU PERSEVERE.
- Are you passionate about your business?
- Can you deal with financial uncertainty?
- Can you deal with setbacks?
- Can you deal with pressures that will come from clients, investors, employees?
- Can you motivate people?
- Can you be assertive and yet maintain trust?
- Can you fail and still maintain positive attitude?
TAKE TIME TO EXPLORE MULTIPLE BUSINESS IDEAS. LOOK FOR INDUSTRIES THAT YOU OR YOUR POTENTIAL BUSINESS PARTNER UNDERSTAND WELL.
MAP OUT (AT A HIGH LEVEL) HOW TECHNOLOGY, COMPETITION AND REGULATION EFFECT THESE INDUSTRIES.
- Is new technology disrupting these industries? Do you know how?
- Is your idea competing with these disruptive technologies?
- What is the unique thing that your idea brings to the table?
- Will strong regulation slow down your sales process?
- Is the industry dominated by large corporate players?
- Can you market your product online effectively?
- Are you selling to corporations or consumers? Do you know the difference?
ASSESS CAPITAL REQUIREMENTS TO START YOUR BUSINESS.
Note that there is an extensive research that shows negative correlation between the amount of money raised in early rounds and the likelihood of success.
- Do you have to raise seed capital?
- Can you and your business partner fund the early stage?
- How much capital would you need?
- What can you do yourself?
ASSESS YOUR STRENGTH AND WEAKNESSES.
- The more you can do yourself, the less capital you need to raise.
- Don't be afraid to roll up your sleeves and learn new skills (i.e. building your own website). It is liberating.
LOOK FOR A PARTNER THAT HAS THE CRITICAL SKILLS THAT YOU DO NOT HAVE.
CREATE A PRESENTATION TO EXPLAIN YOUR IDEA TO YOUR FRIENDS. TEST THEIR RESPONSES. ITERATE AND TEST MORE. USE THE PRESENTATION TO SEEK A BUSINESS PARTNER
. . . . . and most importantly, GOOD LUCK!