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Brad and I, in our roles at DevMynd, get to spend a lot of time speaking with startup founders. That bit of sage advice from our good friend, Ice Cube, applies to much of those conversations.
Starting a company is risky and you should do everything you can to mitigate the risk to a tolerable level. The following is a list of things that we ask startups to help them avoid wrecking themselves. Consequently, as a consultancy, these help us avoid the collateral damage.
Do you have any money?
Despite the fact that this question is phrased in such a way as to elicit a binary response, the answers we hear are surprisingly varied. I typically interpret the following as squarely falling into the NO camp:
- “Well, we’re seeking funding right now”
- “We are currently bootstrapped”
- “Would you be interested in taking equity”.
We’d prefer folks to just be honest and say, “No, we don’t have any money, but we have a killer idea and an amazing team”. We can work with that. Magical unicorn jelly bean money is harder to make payroll with ;)
What problem are you solving for people?
If you can’t clearly articulate a problem that you’re product is solving then you don’t have a product. Further, you need to validate that it’s a real problem. Too many times people approach us with an idea that seems like it might solve an issue but in reality individuals and business have already found creative solutions to the challenge and need no additional tools. You absolutely must have data to back up the problem space you’re addressing.
Who are your competitors?
Chances are, if you have an idea, someone else with more resources has had it too. There are very few completely novel and emergent business concepts out there so don’t kid yourself into thinking you have one. That said, one of the best ways to know if your idea has legs is to take a good look at the successes and failures of businesses in your sector. Are your competitors crushing it? If not, then why. It could be that they just suck at it, or it could also be that the business model just doesn’t work. If you find that you have no competitors, you should consider that to be an opportunity AND a red flag.
Do you know your customers?
When I say “do you know” I mean “have you talked to them…lots of them”. Customer development does not require a product, it doesn’t even require a landing page. Customer development requires Google, an email address, a phone, and persistence. Go out and meet people, share your idea with them, gather feedback, hear horror stories, and then re-evaluate your idea. When we talk to a founder we want actual concrete stories and data, not just “I’ve talked to a few people and they seem to like the idea”, give me data. People will generally lie to you when they think they may offend so be very observant of their impressions.
Do you need massive numbers of users to be successful?
If you use the phrase “social network” in your elevator pitch, I translate that to “I won’t make any money until at least a million people are regularly using my app”. If you need tons of users to be successful, then tell me how you’re going to get them. What is your marketing strategy? What is your user retention strategy? What’s sticky about your product? What strategic partnerships and alliances are you pursuing to gain exposure? This situation becomes even more daunting when you have a product that is built around a dual-network - now you have TWO marketing and retention strategies you need to develop and align.
Have you defined a truly minimum viable product?
“Minimum viable” doesn’t mean that you took out a few of the difficult-to-implement features. It means that you’ve stripped down your well thought-out 2 year roadmap down to what can be built in the next 3–6 weeks by 1 or 2 engineers. You have to fail early to learn anything and you can’t spend a ton of money for that education because chances are you don’t have much to spend. Make sure that you’re idea is small and solid and then prepare to iterate rapidly. Before you start though, you have to know how you’re going to measure. What are they metrics you will use to determine whether your idea worked or bombed?
Do you sound like a car salesman or a cartoon character?
This one is clearly a tad subjective, but in this business a high degree of self-awareness is essential. Of course, we don’t ask this question point-blank, but we do ask it internally when evaluating who we want to work with. Authenticity is the key to connecting with people. A fancy slide deck isn’t necessary, although if done well it can’t hurt. We’ve heard amazing pitches from people in jeans and t-shirts sitting in Starbucks with nothing but the back of a napkin for illustration. If you can pull that off then you’ve accomplished something the MBA types spend years trying to perfect.
The startup community, especially in Chicago, is vibrant right now and there are tremendous opportunities available. At DevMynd we’re all about helping startups build great products and bring them to market - and a big part of that is making sure we’re building something that has value to users. If you can answer these questions as they relate to your business idea then you’re off to a good start.
Originally posted at: http://thegrubbsian.com/post/26176965332/check-yourself-before-you-wreck-yourself