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A few months ago, a friend called me excitedly to share a startup idea. He was an investor’s dream entrepreneur: engineering undergrad with an MBA from MIT, worked at Google, and literally wrote a book on the core tech behind his startup. He launched a product, was getting a little attention, and was at an inflection point. He probably could have raised funding based on this traction and asked me, “Should I take the plunge and do this full time? I think I’m ready.”
I’ll let you know what I told him in a moment, but first, these are the questions I suggested he ask himself before leaving a cushy gig for a high-risk venture:
What is your motivation? Are you motivated by the prospect of getting rich? Are you irritated seeing less-skilled former colleagues getting famous by founding companies? These are perfectly normal human emotions but horrible reasons on their own to start a business. Survivorship bias is real, and for every Mark Zuckerberg there are thousands of founders who do not make it.
Is this idea worth your time? The risk-adjusted return of his current career path was much greater than spending half a decade pursuing a startup. If he wasn’t passionate about solving this problem, he should pass on the idea. Passion doesn’t mean excitement for the product per se, but if you’re not enthusiastically jumping out of bed to remake, say, ERP tools, it doesn’t make sense to do a startup.
What have you done to validate this idea? Do you have a functional product? Any users? Have you run a successful Kickstarter campaign? Have you built up recognition as a thought leader in your industry through social channels?
The reality is that, in today’s ecosystem, you can prove quite a bit with nothing beyond a personal investment in time. My friend had a skeleton product but was far from product/market fit.
Are there real customers for this? It’s one thing to have a working product, it’s quite another to have paying customers. If you don’t have customers, what are…