You’re an experienced executive with a game-changing new concept. Your friends and family tell you you’re on to something. All that’s left to do is quit your job, write a business plan, find someone to invest, develop your product, launch your website, and hire a few people. How hard can it be?
The Challenge Ahead
It will be a challenge, so don’t quit your day job yet.
The good news:
Nearly all businesses that solve a significant problem with a bulletproof business model, a sound management team, and a well-developed business plan will get funded.
The harsh reality:
- No one cares about your concept.
- What your friends and family think is meaningless.
- The skills that got you here won’t be enough going forward.
- Less than 1% of ideas prove to be feasible.
- 90% of startups fail.
- Investors don’t fund ideas.
- You need a team.
There’s a lot written about business planning, what investors want to see, and how deals are structured. You can buy a template or software that will automate the planning process. Answer a few questions, hit print, and out pops your plan.
However, until you fully understand your market, value proposition, and how you will compete, you only have an idea. You don’t know if it’s feasible, how long it will take to launch, or how much money you’ll need. And you won’t yet understand the challenges that you, as the founder, will face along the way.
You’ve decided to get help to knock out a business plan, raise the money, and turn your idea into a business. Where you start depends on how far along you are now:
- Can you communicate your Value Proposition?
- Does your Business Model describe how you’ll turn your product into cash?
- Does your market knowledge allow you to move forward with confidence?
- Can you concisely explain your concept and its potential to a sophisticated investor?
- Is your core team in place or at least identified?
I’ve never met a first-time founder who can answer “yes” to any of these. It’s a complicated process that will confirm you’re on to something or tell you to return to the drawing board. This won’t just be a job change. Your decision impacts every part of your life. It can be exciting and rewarding, or it can chew you up.
In a series of posts, I’ll discuss the unique challenges you’ll face as the founder of your new venture. I’ll explain what sets you apart from your team, your risks, potential rewards, and the potholes you’ll encounter.
I’ll draw on my 25 years as CEO of public and private companies in various industries and countries, as well as my own startup experiences. I’ll introduce you to the challenges you’ll face in your personal life along the way.
It’s time to prepare to step far out of your comfort zone. Initially, it’s your dream, your dime, and your time. You’re taking all the risk, making all the decisions, and doing all the work. This isn’t sustainable, and if you try, it will stall or possibly kill your venture before you even start.
I’ll address the standard planning steps: business model, business plan, marketing, team building, financial forecasts, and investor and customer pitches from a first-time founder’s perspective. I hope this will help you set reasonable expectations, streamline the process, and avoid some of the problems I faced.
Below are the basic categories of my approach with first-time entrepreneurs. I’ll go into detail on each over the next few months:
- What problem are you solving?
- Why do you want to start a company?
- What do you know (vs. what you only think you know)?
- Is your product feasible?
- How will your idea turn into cash?
- What will you need to pull this off?
- What are your actual strengths and honest weaknesses?
- List your opportunities.
- Identify your threats.
- How are you going to build on your strengths?
- What will you do to overcome the weaknesses?
- How do you plan to convert your opportunities into cash?
Nothing will kill your credibility faster than a vague or inconsistent message. You can’t wing this. Get it wrong, and it’s game over.
- What message will you use to attract talent?
- How will you keep everyone focused on your mission?
- Are you ready to confidently present your opportunity to investors?
- What’s your message to potential customers?
Business and financial planning are well understood. By this time, you’ve defined your near-term strategy and added a few key people. You’ll now transition to keeping the program on track and maintaining focus.
Jumping into the startup world is a huge step, but it can be hugely rewarding when done right. You can bend the odds in your favor with a well-thought-out concept, an honest and well-designed plan, a ton of hard work, and laser-like focus. A well-qualified coach or advisor who has walked in your shoes can help you move quickly, reduce risk, and prepare you to communicate your message to customers and investors confidently. In my next article, I’ll take you through the “Discovery” process in detail.