Recently, I worked with a founder whose business might fail. That is, until she makes fundamental changes, I fear for its future. I’m sad because, while her business proposition is sound, she and her team have spent nearly two years and a lot of money, made little progress in customer or product development, and harmed friendships. This needn’t have been her experience. Here are the first steps for a founder’s success.
Founders and teams, while I appreciate your excitement and confidence, I encourage you to take the following steps first. Doing so will improve your chances of success.
- Slow down and don’t spend money. In the early stage, you shouldn’t be spending any meaningful amounts of money; that is, not before you’ve tested your assumptions. Until then, please avoid hiring lawyers, incorporating your business, buying advertising, filing patents, building prototypes, renting an office, launching a website, or building your team. Instead, at this stage, think deeply and critically about your business. For example, think through every step of your proposed business from potential customers’, users’, suppliers’, and investors’ points of view. And think about your competition—all businesses have competitors.
- Read The New Business Road Test by Mullins. This excellent, short book will help you assess whether you’re ready to be an entrepreneur and what you should do to improve your chances.
- Somewhere in steps one and two (earlier is better), take on a business coach who will work with you closely and patiently. Your coach should be experienced across many, if not all, business functions and help you balance life and work, define your goals and strategies, state your proposed venture’s key hypotheses, answer your Three Key Marketing Questions, critically test your results, and much more.
- Once you’ve completed steps one through three, you’ll be closer to launching your business, stepping back to redefine your business, or stopping further work—all without making costly mistakes and possibly losing your life savings! Assuming you go forward with your venture, next, with your coach and, if you have one or two already, your first co-founders, you will want to define and estimate the size of your beachhead market, complete your first system profile, decide your product’s target price, set cost targets, define and set your funding strategy, and, finally, begin to build your team.
Measure twice, cut once. The likelihood of your success will be significantly higher if you complete the steps outlined above in a calm, deliberate, and steady manner. A rule of thumb in product design is that much of your product’s cost (around 70%) is locked in at initial design; therefore, start slowly and carefully with simple steps—this should not cost you much money, if any, practically speaking. If you do so, you’ll soon be ready to act decisively and build your successful dream venture. Founders, done right, your venture should succeed.
Please click “Contact” if you want help launching, adjusting, or improving your business, and leave a comment or send me a note if there’s a particular subject or topic you’d like me to address in a future post. Colorado Technology Ventures coaches and mentors founders and their startups.