Selecting Your Next Startup
So you want to start a new business? Which one should you select from that list of ideas you have?
Selecting the right one is very important-- one of the things you learn about successful entrepreneurs is that they know which ideas to choose to put their efforts behind. Even more importantly, when they choose wrong, they admit it and go on to other more worthwhile endeavours.
When some of my engineering students from 42.491 came to me after graduation with their list of six 'great' ideas, five were either impractical, required an amazing amount of R & D, needed the world (read markets) to come to them or required a huge amount of startup capital. Then there was the sixth idea-- which turned out to be gradeAstudent.ca.
Their value proposition was simple-- we will come to your home or place of business and fix your PC: on-site computer repair and training at a fraction of the cost of the computer repair industry. The results have been outstanding.
Below are some selection criteria you may use. Remember that in Entrepreneurship, there are no 'rules' and those that there are can sometimes be contradictory and ambiguous-- you need 'fuzzy' logic to deal with this successfully:
1. Do something you love (but don't turn your hobby into a business unless you are prepared to hate your hobby if it doesn't work out).
2. Aim to create real value much greater than you could if you had a JOB.
3. move up the value chain-- try to get custom outputs from standard inputs* (eg., Dell) rather than standard outputs from standard inputs (the car factory) or custom outputs from custom inputs (the consulting industry).
4. Identify the 'pixie dust' in your business model and Get The Business Model Right.
5. Verbalize your ideas-- in front of trusted folks-- get some feedback. Your great idea might sound terrible in your own ears from your own mouth, seconds after you start presenting it.
6. Select something that you can bootstrap-- something that doesn't require a mountain of money to develop and bring to market; something that once developed, lends itself to guerrilla marketing-- again something that you can sell without having to buy ten Super Bowl ads at $1.5 million each before the first dollar of revenue is even earned. The best businesses are capital starved ones-- ones you start with nothing. Then you get to keep all or most of the equity and you know that you will be efficient in every aspect of the business or your business will soon cease to exist. You will be highly focused on early product (or service) delivery, securing launch clients, collecting your receivables, cost containment and all other aspects of ... running a good business.
(* By Professor John Callahan and Mr. Scott MacKenzie)
Copyright. Dr. Bruce M. Firestone, Ottawa, Canada. September 2002.
Guerrilla Marketing
Small Business Management Front Page
Entrepreneurialist Culture Front Page
DramatisPersonae.org Coaching
DramatisPersonae.org
