So you have an idea that sounds plausible (in your mind at least), you get some funding, you rent an office and you hire a bunch of your friends. Now you have everything in place to build the next Facebook, the next Uber or the next WhatsApp. Sure, you will need to pull a few all nighters but that’s cool, because entrepreneurs do that and you are enjoying the entrepreneur lifestyle.
Unfortunately it isn’t actually that simple in real life. It may seem like that if you watch movies or even if you observe real life successful entrepreneurs, but it isn’t.
You may suddenly see someone making a big exit and think it’s easy. What you forget is that this person has most likely worked in private for years to enjoy his success. This gives the bystanders, the average Joes the false impression that building a successful startup is easy.
The real life scenario for most aspiring entrepreneurs is the following: You think up an idea that sounds plausible, you get some funding, rent an office and hire a bunch of your friends and then you quickly realise your screwed.
In order to properly validate your idea, these are 8 questions you need to ask yourself before launching a startup.
1. Are you solving a problem?
You need to be able to clearly state in no more than two sentences the exact problem you are solving. If you startup isn’t solving a specific problem you aren’t going to succeed. You need to be able to clearly define what it is you are doing. Just doing something that seems cool in your mind isn’t going to cut it. You need a proper idea that’s going to make people’s lives better.
2. Can you name ten people you personally know who would use your service/product and actually benefit from it?
As an entrepreneur yourself, it’s likely that you hang around innovative people. Early adopters that are open to new ideas and technologies. Saying that there is a huge market out there for your product is great, but can you name ten specific people that you personally know that would benefit from using your product? If the answer is no, you need to go back to the drawing board.
3. How have others attempted this idea before?
It is important to check your market and analyse not just the current competition but also other companies that tried similar ideas in the past but ended up failing. Do your research and learn from their mistakes. Did they have a funding problem? A cash flow problem? A marketing problem? Or is it the product itself that just won’t work? Don’t repeat other people’s mistakes. Understand exactly what it was that caused them to fail. Know everything there is to know and only then should you make your “go/no go” decision.
4. Does your idea already exist?
Similar to the previous question. If the product already exists, is it successful? Why is your product better? What will make a customer buy from you rather than them? Will you compete on price? Quality? Service?
Just because your idea already exists doesn’t mean you shouldn’t go ahed anyway. Look at Apple. We had mobile phones for years before the iPhone came along. Apple decided to go ahed anyway and make a better product than everyone else and that call turned out to be correct.
5. Did you receive any feedback from a third party?
Lets face it. No matter how ridicules your idea may be, chances are your mum will tell you it’s amazing. Your friends will also give the thumbs up because they don’t feel comfortable telling you are an idiot and your product sucks. You need to get a true honest opinion from an unrelated third party that doesn’t care about you and your feelings. If they also give you the green light you may be on to something.
6. Will you be able to make a profit?
Is there any business model for monitization? If for instance you want to launch a startup that makes movies and posts them on youtube, will you actually make a profit? Youtube ad revenue won’t even come close to covering your expenses. How is it going to work? Best you figure this out before you launch or things will get messy down the road.
7. Are you going at it alone or will you team up with a co-founder?
This is a big one. You can choose to be a one man show. CEO, CTO & CFO all in one, or you could start your venture with a co-founder. Going at it alone allows you to keep more equity and gives you the ultimate control. However, teaming up with a co-founder will allow you to share the workload with a partner that will (hopefully) be as motivated as you are. Furthermore, it is inevitable that every startup will hit a low rock bottom point during it’s lifespan. This will be a defining moment at which you must decide whether to throw in the towel or battle on. You are much less likely to give up if there is someone else standing there next to you – a co-founder.
Just make sure that if you do take the co-founder route, that you have a proper founders agreement.
8. Are you self motivated?
Many people overlook this key point. They wake up one day with a great idea and decide to launch a startup. Will you be able to stay motivated though? Building a startup is hard. Really really hard. We are forever seeing startups being sold for billions but many people forget this:
People are rewarded in public for what they have practiced for years in private.
What does that mean? It means you need to be motivated. Self motivated. There isn’t going to be a boss hanging over your head demanding a report on his desk by lunch. If you can’t do things without someone telling you to do them, you might want to reconsider your venture. It may seem easy when you see companies like Waze and WhatsApp being bought out, but tech news is mostly about the good high points in a companies life. Who want’s to read a story about some founder that’s having a hard time from a company no one ever heard of?
Feature Image: Ethan Lofton
