Are you thinking about leaving your job to start your own company? Don’t dive into the world of entrepreneurship just yet, as you should assess your goals and extensively test your startup idea in the real world before quitting your job.
If you think you are ready to start up, follow the guideline below to begin your journey. (Or, if you've already made up your mind, apply to the Founder Institute today!)
Step 1 - Is This the Career for You?
Pursuing entrepreneurship is not only a career choice, but a lifestyle choice, so be sure you are doing it for the right reasons. If you are starting up only to gain money or power, you will not likely achieve success.
Good Reasons to Become an Entrepreneur
- You are PASSIONATE about solving an important problem. Having passion for your idea is essential as it will help you get through the hard times.
- You have UNIQUE MARKET KNOWLEDGE on how to solve a problem. A particular expertise or skill set will set you apart from the competition.
- You want to CHANGE THE WORLD. If you’re going to start up, start up big.
- Why do you want to be an entrepreneur?
- How do you define success?
- How do you see your life changing, and how will you impact the lives of others?
- Can you handle failure?
- Are you ready for the time commitment?
- Now is the the time to decide if you’re ready to change your lifestyle in order to accomplish your career goals.
Step 2 - Pinpoint Your Talents
Your strengths and passions should serve as the foundation for your business, because you will not survive the entrepreneurial journey without them.
What are you good at?
Take the time to outline your skills and competencies, as these will help you determine what industry you should start up in.
- Which skills assisted in your professional advancement?
- How can you leverage these skills to become a successful entrepreneur?
- How can you improve your weaknesses?
While you're listing your capabilities, get a second opinion.
- What do your manager and co-workers praise you on, and how can you translate this into a business?
What are you passionate about?
Once you have listed what you're good at, examine the things in life that interest and excite you.
- What do you love to do that doesn’t seem like work and never bores you?
- If you could do anything in the world, what would it be? Can this translate into a business?
- What could you see yourself doing this for the next 5 years? 10 years? 20 years?
- What motivates you? What empowers you?
Favorable Entrepreneurial Traits
- Work Experience: People with industry and management experience are better prepared to run a successful company.
- High Fluid Intelligence: Problem solvers can adapt quickly to the dynamic world of entrepreneurship.
- High Openness: Being open to new experiences and ideas means you are more able to concoct creative solutions.
- Moderate Agreeableness: Having a balance of kindness and strictness means you can get along with others without compromising the needs of the company.
Step 3 - Launch a "Project"
Big ideas are raised, not born. Start a disposable “project”, and write out several variations. During the formative stages of building a company, it is important to have as many ideas as possible from which to derive inspiration. Try not to limit your creativity!
Don’t fall in love with your project, as you may have to change it. Instead, look for reasons to dismiss your ideas until you discover the one you should continue with.
Each idea should answer the following:
- Can your passion impact the lives of others?
- Can your skills offer a solution to a broad or common problem?
- Will you be able to influence others with your passion?
- Will people be interested in your ideas?
Remember, the best startup ideas have:
- Simplicity - Solve one problem, for one customer.
- Clear Revenue - Start with one, simple revenue stream.
- A Large Market - Aim for markets with at least 10 million people.
Once you've assembled a batch of potential startup ideas, it's time to examine the viability of each.
- If your interest in an idea has stagnated, then maybe this project is not for you.
- If you come across an idea that you can’t stop thinking or talking about, you may have discovered a winning business idea.
Step 4 - Research and Feedback
Once you’ve established a solid idea, expand your knowledge to make sure that yourr idea is feasible.
- Reference the best entrepreneurial books and trade magazines.
- Expand and update your startup terminology, research startup costs, funding options, and legal obligations.
- Attend networking events with people who are working on similar projects, and connect with possible mentors or business advisors.
- Figure out where your market lies, and determine who your competitors will be.
- Research why companies in your industry have failed. Figure out what they did wrong, and how you can do better.
- Make sure you are not violating any agreements with a current or past employer. Verify that you don’t compete with or infringe on any trademarks or patents.
Nobody is going to steal your idea, so the best thing you can do at this stage is get as much feedback from as many people as possible to help you evaluate, iterate, and improve your idea. This is the most important step, so be prepared to spend several months or more at this stage.
Basic Research Plan
Analyze your market and competition. Are the trends favoring your idea? Are you violating any agreements, trademarks or patents?
Create a simple one sentence pitch and get feedback from friends and colleagues who will be honest with you.
Find a similar company that failed and speak to a founder on the phone. Collect their feedback on the market and your idea.
Attend many startup, entrepreneur, and business-related events, and iterate your pitch until it is clear, concise, and compelling.
Find some real potential customers for your product, and take them out to coffee. Do they immediately understand you idea? Does your idea solve a crucial problem for them, or is it just a “nice to have”? Would they pay for it?
Step 5 - Are You Ready?
You’ve just gone through a basic entrepreneurial process of idea and customer development. Did you enjoy the process of pitching, iterating, meeting customers, and getting both positive and negative feedback? Was it a rewarding experience for you? Are you still interested in your idea?
Answer YES or NO below:
Next Steps: If you didn’t like the process or found it too difficult, consider whether entrepreneurship is right for you at this point in your life.
Next Steps: Continue to iterate by getting constant feedback from entrepreneurs and colleagues. Start looking for advisors and begin to build your product. You’re on the right track!