Ok, so this is a bit complicated for me, because I find it hard to organize my own ideas. I figured it would be useful to other founders out there if I shared a bit about the ways I try to beat down which ideas I decide to work on, and how I evaluate success. I've spent some years founding startups, and if there's something I can do to help prospective founders to save spending those years, I will. I believe entrepreneurs who grew large are what help local economies grow, and I believe striving for an ideal is a very admirable thing to do. Nevertheless, I have also seen much grief after ideas crash, and this is something the press covering entrepreneurship usually avoids. This post could get darker than a goth kid's journal and colder than a penguin's... beak. :)
Run your idea and yourself down these questions. I'm trying to put you in front of the startup life so you can sober up. If one breaks you, ponder upon it. If you're cool with them, you may have what it takes.
Oh, you’re thinking of an ad based model. So, what will you do while this idea grows and no one wants to put an ad on it? Oh, your american friend has 15K he wants to put in. Neat. Will you be fine trying to be “ramen profitable” until then? You got into Startup (insert country name here)! Great! How will you feed yourself or pay rent there for months, or act upon a medical emergency? Oh, you plan on getting a loan. Will you really incur in debt without a stable income to pay it? You gave x% for an early stage investor. Cool guy. Do you have an exit strategy for when that investor sees no returns? How will you face that investor if she/he is a triple F group (family, friends, fools) member? So you saw there’s a wave coming on that market, it’s all the rage now. Have you really checked for competitors? Is there strong confluent research supporting this claim? Did you know about this years before hand because you worked on that space, or did it just occur to you?
Always, ALWAYS strive for a business where people pay you for what you do. Your idea should fund itself first. Don’t believe good press is always correlated with company growth.
2. Is it aligned to your Founder's Thesis?
What’s a Founder's Thesis you ask? Well, I just made it up, but I'm pretty sure it has been coined by others. I believe that just like VCs, founders need a core theory on why they want to change the world. This is something few entrepreneurs even think of having. Have you ever wondered what actually drives your initiatives? What makes you happy? Is it fame? Is it you want to become part of this shiny world of “bold entrepreneurs”? Is it fortune? Or do you want to help a community? After 3 or more years of hurdle, will you keep having the same enthusiasm about that thesis as you do now?
The founder’s thesis is your unfaltering core purpose as an entrepreneur (or "intrapreneur"). It’s the seed of your contrarian ideas. It’s what motivates your sleepless nights working when you have no customers. It’s that imaginary thing you want to keep on building even if no one else cares about it. Don't confuse that with passion. You can close your company, start a new venture, or even work for another startup, but your thesis should stay intact.
Take out a pen and pencil and really think what it is you want to accomplish in life, and what success means to you. Avoid external opinionated noise and look for an answer lying within. It’s a personal definition, and you won’t find it online. Your founder’s thesis also needs to be in alignment to your potential investors’ thesis, and most importantly, your thesis needs to be able to listen.
3. Do you really know the market it’s in?
Many entrepreneurs go to an industry they happen to know nothing about. Even worse, they get asked who their customers are, and they respond: “everyone”, or “milennials”, or “people like me in this situation”. Don't delude yourself. This is the worst mistake. It’s not about having an innovative revolutionary idea all the time, yet other people may be thinking about the same things as you.
You need to have deep expertise into what you’re doing to actually start a company on it. If not, get someone on your team that does, or find a way to collaborate with providers of that knowledge. Otherwise, it’s going to be a long way up the learning curve to building the right value. Companies die when they run out of fuel, and that fuel is cash. If you understand your market very well, which usually comes from having worked on it for years, you’ll find something that will save customers or make companies money.
4. Are you ready to face failure?
Often times, “innovative founders” need to juggle and get money on the side to pay the bills, and that’s not an ideal lifestyle. Few even think about getting married or commitment because of this emotional and economical rollercoaster that depends directly to working. Some get secretly depressed because they may evaluate their standing on having families or stable careers. It is said founders are best understood by other founders, because of all the sacrifices they make. And sometimes, that sacrifice means to fail. So, how do you face yourself upon failure?
Know you are not your startup, but also know that you're obliged to decompose failure into many possible factors. You need to observe yourself and your company from a third person's perspective, because something about you or your thesis could be one of those factors. When facing failure, be ready to analyze the heck out of it. Tip: Try to think of failure before you fail as well. You may save yourself some pain, or debt.
5. Can you think of a core message for it?
I am a crappy scriptwriter, but I've understood the importance to hold a clear message that reaches people’s hearts. It’s not technical stuff that people care about, it’s about the value you bring to the world, and why you decided to go down that path. If you can think of a very clear message for the idea starting with your founder’s thesis onward, this will not only help you bring the pitch out, but it will also help you get a community of potential customers. More importantly, it can get you a committed team you can trust. The message is the seed of all startup competition avocados, and it evolves into the mantra, the pitch, the product, and the relationships.
6. Will you grow it as a corporation or as a commodity?
Some startups peacock a lot in their early stages to show traction, they like to appear larger than the 10 people team they have. Think of your idea as a company in its road to scale, don’t think of it as an app or a fad. Don’t worry if the pitch world is not for you, if you don't win founder of the year awards, or if all that hard work is not growing the company exponentially yet. Your long term ambition for corporate growth may be a better predictor for success than all that "event cocaine". Think of your idea as your main source of revenue down the years. A gift to your grandkids, if you will.
It doesn’t matter if you’re on a thriving ecosystem or a town, revenue is still king and you can still grow. You need to think of this idea as a company because good companies can outlast you. You need to think of yourself as just a member of a large firm because it means if and when your idea grows, you will be able to step down as a founder to continue innovating on new product ideas within it. And you will need to think of your idea as a company because very few large corporations buy or merge with mom and pop shops when it’s cheaper to clone them.
7. Have you started working on it?
There is no better way to start an idea than to actually prototype it. Why? Two reasons:
One, you’re not seen as a lazy person who takes the easy shortcut out by pitching ideas with a beautiful deck that matches your landing page full of logos. Two: by building something, you get a sense on how much and how long it will take to build and sell your "minimum lovable product".
More often than not, having a prototype, albeit crappy, is better than just sharing how awesome your idea is. Avoid applying anywhere without a project in hand. In fact, apply only if it really makes sense to you. Real accelerators don't incubate hummingbirds.
In other words, it boils down to this:
8. Can you work your idea enough to actually beat the system?
Consider this: After 5 years of wearing tons of different hats, your corporate resume could be pretty much unemployable. You may get tired of pushing the company forward. You may struggle to find side sources of income. You may have tough love relationships. You may have to face getting really sick once or twice.
I don't think it's responsible that everyone becomes a founder right off the bat, but I believe everyone's responsible for designing their ideal lifestyle right off the bat. You have to be contrarian enough to actually move ahead with this, because it's a lifestyle choice, not a career path.
There are many other things I believe prospective founders should think about, but these may pose as an initial filter for some. Thank you VERY MUCH for reading all of it. If you have learnings of your own, or disagree on something, please share your thoughts.
If you have the founder's itch, my sincere hope is that you become a very successful entrepreneur and that you bring the ecosystem you care about forward. But, please, keep your feet on the ground. You'll thank me for it.
Thanks for reading!
Here's some posts I've written elsewhere in both English and Spanish.
You can find my musings on Startup Nations, Matador Network, Medium, and Cowbird.
Thanks for stopping by!