Face it, entrepreneurship is not sexy. It’s the classic story, the genius coder at 20 years old launches a website, and millions of users later they exit for billions to a fortune 500 company. At only 25 years old they are driving fancy sports cars and living in a mansion. In reality, entrepreneurship is customer interviews, revenue models, marketing strategies, product validation, MVPs, low job security, late nights, grit, hundreds of hours with no pay, and a very, very small chance of success. Most companies are driven by the ego of the founders who ultimately make minimal progress towards their goals. The good news is that there are some things that you can do to significantly increase your chances of success.
Make sure that it doesn’t already exist
Awesome! You are going to change the world with your new app that allows dog owners in the same neighborhood to share dog walking responsibilities. Before you do anything please spend at least 20 minutes on Google searching for what already exists. Oftentimes you will find someone who has already built your idea in a way that is 10 times better than you could ever imagine.
Make sure that you are solving a problem
People are 10 times more likely to move away from pain than they are towards pleasure. Eventually, someone is going to have to hand you their hard earned cash to pay for your product or service. It is easy to start a company because of a cool piece of technology. Make sure that your product solves a major pain point for your customer. The good news is that there a couple of really good ways to make sure people will click buy:
– Set up a landing page and drive traffic to it using Google Adwords. Compared to running a business into the ground, it is low cost to spend $200 driving roughly 1000 people to your site. Have a short description of your product, a nice looking cover photo, and a “Sign Up For Updates” box that lets users leave their email if they are interested. If you have 100 people leave their emails and you assume that 40% of those people would buy your product, you can do the basic math on a product that rakes in $20 per unit $20 * 40 -$200 (in marketing) = $600 in profit. Now you know you have found a good pain point.
– Conduct customer interviews. Do at least 30 customer interviews with people who you think might actually buy your product. Preferably people who are not your friends. These people will help you identify potential areas of improvement and fatal flaws.
Have an exit plan
What is your end goal? Do you want to IPO in 10 years or have a $20 million exit in three? Maybe you want to run a lifestyle business that supports your family or start a R&D company that employs 30 engineers and churns out world changing ideas on a daily basis. It is up to you, but make sure your vision is clear so that your supporters and partners know what you are working towards.
If you have already started a company and are looking at these items, remember that there are many paths to success. If you are thinking of starting a business, make sure that you do your homework first. Read a couple of books and take it slow to start. Talk to as many experienced people as you can, and never be afraid of failure.