Here are three questions to ask yourself before you start a business.
It’s long been said that the difference between a founder or entrepreneur and everyone else with an idea is that founders actually took the leap and made the idea happen. But the steps along the path to executing a big idea are incredibly challenging. Quite possibly, the single biggest step actually happens right before the leap: answering the “should I do it?” question.
Should I quit the job that already pays me pretty well? Should I jump into this entrepreneurial journey that could potentially be life-changing in many ways?
This was one of (if not the absolute) hardest questions for me in the beginning, and there aren’t too many people you can talk to about it who actually took that first step and went on to a successful exit or IPO.
Many people explore side projects and find that they can’t get them going to the point where they are ready to go all in. There is absolutely nothing wrong with pursuing a side venture; in fact, in many cases, it’s very smart because it allows many of us to scratch that “entrepreneurial itch” while maintaining the feeling of financial security from our full-time jobs.
But there always comes a point when you have to be all in if you want to really see the idea flourish. It’s the same as having a hobby that you really love and are potentially really good at, but don’t believe in enough to pursue it full-time. So most people pass.
If you can’t stop thinking about the idea and you wake up in the middle of the night wishing it was morning so you can get back to work on the next step of the project, you are very close to this decision.
Here are three questions to help you:
1. What if I spend 24 months on this idea and fail?
It sounds drastic, but often, depending on your situation, the answer to this question is really not that bad. Answers could be, “I return to the company that I left to pursue this idea” or “I get another job in the same area” or “I travel”… or any number of variations on those themes.
It could also be “I will have exhausted my life savings and will not be able to provide for my family.” If it leans toward that latter end of the spectrum, of course you should proceed with extreme caution.
But if you can stomach 24 months with potentially little pay and the risk of it not working, you are ready for question two.
2. Am I prepared to spend 10 years working on this project?
In hundreds of conversations with founders and potential future entrepreneurs, this has emerged as a critical question. The reason is that there seems to be a mismatch in expectations. Many new founders think “I can probably do this for a few years and be successful” while seasoned investors and founders who have navigated the steps along the founder’s journey know that the vast majority of the time, it takes between seven and 10 years for a company to start, scale and see a successful outcome. I’d plan for 10. Even many of the most well-known companies in the world took 10 years or more to become billion-dollar acquisitions.
In my own experience, it took my company eight years to acquisition and another two years to see it through to liquidity. As long as that seems, it was actually “fast” for the cohort of startups that were created in my sector around the same time frame. Many of those companies are still at it, scaling and positioning for the next steps along the journey.
If you are through number two and can squint and imagine spending a decade seeing this idea through, it’s time for number three.
3. What does success look like to you?
If you are OK spending 24 months to see if it will work, and you can see yourself giving 10 years to truly focus on seeing it through to completion, then you are ready to answer the most important question: What does success look like to you? The only thing that matters here is the “you.”
This is the most important, yet often the most under-answered question for entrepreneurs. There are no wrong answers, and it’s 100% in your control to decide at the beginning; however, it’s very hard to change along the way.
Here are some options:
• Freelancer: The future exit doesn’t matter and I just want to be able to start a company. I’ll feel truly satisfied if I can make this happen, even if I’m the only employee.
• Lifestyle: I want to start this company, scale it up in a measured way, make it profitable, and continue running the business until I’m 60+ years old. I’ll feel truly satisfied if I can make this happen.
• Venture-backed: I want to scale as fast as possible and create a billion-dollar-plus outcome, through an IPO of some type or a large acquisition. I will not be satisfied with anything less, even if my chances of failure are much higher.
The steps involved in each of these outcomes and the hundreds of variations in between will be vastly different for everyone. And yet in my experience, and in that of the many founders I work with, I’ve found that clarity on the answer to this question will enhance your quality of life and fun along the journey more than arguably anything else you could do.
All of these are very hard to do, but each path will lead you on different pursuits of capital raising, hiring, and growth requirements. Clarity on where you want to go helps you really understand what you are signing up for, focus on choosing the right steps along the way, and select the right founders to spend time with, learn from, and emulate.
Riggs Kubiak – Entrepreneur in Residence at Procore Technologies, supporting CEOs & Founders in the ConTech and PropTech ecosystems to accelerate growth.
"do it" - Google News
August 25, 2021 at 09:00PM
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Tough questions for entrepreneurs: Should I do it? - Fast Company
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