My posts tend to be lengthy and a bit wordy, so I thought I’d distill my philosophy a bit. If I had to describe my founders philosophy in a few simple tenets they’d probably be something like the following:
- Have a good idea, something you are passionate about, but don’t obsess over it being perfect. Developing an idea is an organic process and once you apply your mental energies to developing something, the way the idea evolves is more important than its initial form.
- Time is king. Time is money. Therefore aspire to maximum frugality as it will give you time to spiral in on the successful venture idea.
- Don’t develop in a vacuum, try to sell something as quickly as possible. Market feedback is the ‘experimental data’ that allows you to know if you’re on the right track or not. Revenue also gives you more time.
- Learn to extract value from failure. The greatest entrepreneurs were the ones that were able to extract the maximum value, to learn the most, from their failures. Failure is not the end of the road, failure is only a step towards success.
These are all related, obviously, and lead to lots of other more specific strategic corollaries but I’d say those are the foundation. There are lot of other pieces of strategic advice, but I believe thinking of them in the context of the above four will increase the overall chance of success for your venture.
{ 2 comments }
I talk to people who have some good innovative ideas. These young entrepreneurs are confident their ideas are good, but need to understand if what they think will really materialise. A couple of things that they are looking for is the necessity to discuss this with an experienced person, but one who would maintain confidentiality. At the same time they also need to conduct market research at low cost as these folks do not have money in their pockets. The latter has many possibilities but as far as the former goes, these folks find it difficult to trust a lot of the people. Any suggestions?
Natti,
Trust is a tough thing to come by when you want to start a company, I know the feeling. I have a quite a few years in the computer industry and have several extremely smart friends (much smarter than me), with whom I was able to discuss my ideas and get feedback. I’m assuming your entrepreneurs don’t have this kind of a resource pool of mentors. I’m also assuming you’re looking more for ‘entrepreneur’ type contacts rather than purely technical.
First thing is, if your entrepreneurs are looking to discuss their ideas with people in financing circles, or other companies, you can pretty much forget about confidentiality. It kind of stinks, but that’s the way of things.
That being said, I argue the initial idea is not as important as most people think. The fear of discussing startup ideas comes from the notion that the whole value of a startup is in the initial idea. While there is obviously some value in the idea, I would argue the real value of a startup is in the way people are able to execute against the idea and how it evolves.
Taken in that light, it’s not as tough to talk to people about the ideas. Now, I’m not saying to go out and tell everyone you meet your idea, but the good ideas your entrepreneurs have now are just seeds to build their real ideas. You’d be surprised how startup ideas will change once you start executing against them. I would recommend reading Paul Graham’s essay “Ideas For Startups”, he does a much better job of discussing this ‘value as evolution of an idea’ point.
The dream of ‘pitching your idea’ to an angel investor or venture capitalist and being showered with millions of seed funding is a very unlikely scenario. Startup ideas are nearly worthless until there is some ‘there’ there. If the startup idea is nearly worthless, you don’t have to worry as much about someone stealing it. The intrinsic value of a startup idea is that you believe in it, and it motivates you to execute.
If your entrepreneurs want to know if their ideas ‘will materialize’ the best advice I can give is to try starting to implement them, even if it’s just in their spare time. This, of course, hinges on them being startup ideas that can be implemented with little to no capital (the best case). If they requires starting capital, then they’re going to have to begin to court funding sources. Getting funding is a full time job, requiring business plans, networking, and building great presentations.
Even if it requires capital to fully realize, I would still argue that they should try to implement something that demonstrates the value of the ideas. If it’s a hardware idea, can you simulate it? Can you build software models of how you expect the ideas to work? All of this seemingly pointless work will help convince potential funding sources because they will begin to see a ‘there’ there.
Now on your other question, I’m actually not a big believer in market research in the classical sense (questionnaires, focus groups, market segmentation analysis, etc…). I think your entrepreneurs would be much better served by trying to build something of value and seeing how the real market reacts to it organically. This is why there are so many “beta” software/web projects out there now. I believe the best market research is actually taking data from a real market and analyzing how it reacts to your product and using that information to adjust your idea/strategy.
This isn’t always practical, of course, but since I haven’t explored other avenues of classical market research, I don’t really have any advice on ‘cheap’ research, sorry.
Hope this helps.
Comments on this entry are closed.