A step by step process to evaluate your idea and, more importantly, whether you really want to be an entrepreneur.
You have an idea that could grow into a world-changing, money-belching company. So you’re thinking of founding your first startup.
The trouble is that there’s no obvious path to becoming an entrepreneur. In the US we have exams to tell you you’re qualified to dispense prescriptions, trade securities, or educate our schoolchildren. But how do you know you have the skills to start a successful company?
You probably don’t. No one is born knowing how to build a successful company. But that shouldn’t hold you back from trying. Skills can be learned! If you’re seriously considering taking the leap, here’s a checklist, designed to be carried out in as little as a week, that will help you make an informed decision on whether or not to take the leap.
1. Read Founder’s Dilemmas by Noam Wasserman.
Time to complete: ~8 hours
What are the costs and potential benefits of founding your own company? What resources (human, financial, and other) should you be assembling? Founder’s Dilemmas has answers to most of the questions you don’t even know you should be asking. A lot of popular startup books (like the classic ‘Do More Faster’) focus on case studies, which are interesting. But I really appreciated Wasserman’s systematic longitudinal studies of 1000+ startups, and the facts he drew from them. For example: the average founder has worked for 14 years before starting his or her first company, but the standard deviation is 9.8 years. So there really is no ‘right’ age to become an entrepreneur.
2. Read Venture Deals by Brad Feld and Jason Mendelson.
Time to complete: ~4 hours
Chances are you’ll need to raise money at some point. Do you know what options, convertible debt, and carry are? Are you sure? If yes, go buy yourself a popsicle, and then read this book anyway (the rest of you do just the last part).
Convincing someone to give you money is an art, not a science. But for deciding how much equity to give up, what terms to be flexible on, and what kind of person you want to take money from — it doesn’t hurt to learn from the experience of those who have gone before. Plus it will probably help save you a lot of money in lawyer’s fees.
Time to complete: 48 hours
These happen all over the world — Startup Weekend and LSM are the most well known, but many clones exist. They tend to follow the same pattern: on Friday night, everyone (typically 50-100 people) shows up and pitches ideas. Attendees vote and the top 10 ideas are selected for further development. Even if your idea isn’t chosen, you’re expected to join a group and work on turning one of the 10 concepts into a ‘business’ for the next 48 hours. Mentors—investors, experienced founders, etc — coach teams on best practices. On Sunday afternoon, each team demos, and the mentors choose a winner.
If you find in the course of the weekend that you’re frustrated by the challenges of building a team, fighting for your idea, figuring out how to make something work with less time or other resources than you’d wish, or releasing something that isn’t perfect… that might be an indication that you won’t enjoy doing this for a living.
(Some of these are free, some aren’t; the paid ones may have better mentors and thus, potentially, more useful connections.)
4. Connect with the ‘community’.
Time to complete: minimum 2 meetups, 4 hours total
Most cities will have some form of startup networking scene. These are generally easy to find via Meetup, an online organization that allows people to create special interest groups and publicize their events.
Show up to anything that looks interesting, eat some pizza, and tell people about what you’re thinking of building. Eventually, as your idea and product refines, you’ll want to target key players rather than the admittedly hit or miss crowd you’ll find at an average meetup. But at the beginning you should just get feedback from as many people as possible.
Meetups are also a great way to meet potential teammates. You’re not going to build a billion dollar startup on your own, and even if your idea and abilities are Zuckerbergian you’re not going to have people beating down your door to work with you at the very beginning.
There are almost always some interesting people at every startup-focused event. If you can find them, hey! You might be good at this.
5. Find role models and ask to meet with them.
8 hours to set up and have 4 meetings
Chances are you have some entrepreneurs in your network of family, friends, and former colleagues or classmates who will be happy to listen to your idea and provide some initial feedback.
If you’re interested in a specific industry, don’t be afraid to seek out the leaders in your field. I’ve cold emailed CEOs of some of the biggest companies in my industry and every single one has replied (though not all agreed to meet the first time). Entrepreneurs tend to be generous with their time and advice. We’ve been where you are now, and we’re happy to do some shepherding just as we were once shepherded. That being said, you’ll do yourself and them a favor by learning a bit about the startup landscape before you reach out. Read Founder’s Dilemmas first and then make the most of your meeting by coming in with specific questions.
You don’t need to follow this list. I’m in no way an authority on what it takes to build a successful company (we’ve still got a long way to go at TripCommon). But if you’re thinking of investing a substantial portion of your life in a startup, a bit of due diligence can’t hurt.
Ultimately, no one’s going to be able to tell you when you’re ready to found your company. You need to be passionate. You should be able to convince at least a few other people that your idea is worth building. But beyond that, it’s anyone’s guess whether you have what it takes to succeed. The only way to find out is to try. Good luck!
Image credit: CC by Alhan Keser