For the sake of this article, let's say that you already have a killer idea that you would like to put into play and want to disrupt the vertical your idea lays in.
The majority of us have had some kick-ass shower thoughts, some of us have tried to put them to work, few of us have managed to succeed with them.
Let’s see what the questions are that you should most certainly ask from yourself before deep-diving into your new venture.
Am I going to do it solo or with co-founders?
There are perks on going both ways, and it really tones down on the idea that you have. Let’s say that you are a great product marketer and product visionary, however, you lack technical coding skills or design skills. It would be highly beneficial to have someone by your side as a supportive role for the things that you lack.
Personally, I have done it both ways — I have tried solo and both duo and a larger group of co-founders (there are five of us currently in my startup).
There is no silver bullet here, but one main key point you should follow — you have to get along with whomever you bring on board. Think of them as your second family. Because when your product takes off and you will become successful, you will share the same office and seat at the table with them for many years to come. You need to get along! Keep in mind that getting along is just the tip of the iceberg, you and your co-founders need to click, once you have it — you’ll know what I’m talking about.
When should I reach out for legal help?
As soon as you can, I can’t stress this enough. Having all of the legal parts worked out before even starting to build the MVP is beneficial. Why? If you start working on an MVP all of the lines of code, designs, copywriting, etc. is owned by whoever manufactures it, in startup terms, they own the Intellectual Property (or IP for short) to their work. It is essential to have the IP transferred to the company as soon as possible to avoid any issues that might arise between you and your founding partners or first hires.
At what point should I start raising money?
This one is always super tricky! But from my perspective, there isn’t any silver-bullet to the timing where you should start looking investors from outside. If you can bootstrap your company from the ground up and get the first clients with your own money — that’s awesome! If you can’t, you might want to turn for some Angel investors. Usually, it is beneficial to have at least one paying customer, so your idea would be some-what validated and investors love validated ideas.
Do I know the basic startup jargon?
When you start talking and befriending people from the startup scene they tend to talk a bit differently, this is the outcome of many things, like over-optimizing the spoken words and so forth. You will want to understand at least most of it, not just because otherwise, you might look stupid, but to understand your conversation partners, investors, and ultimately the deals you put your signature under.
I will provide you with a few here:
- B2B (or B-to-B) — Business to Business (as your business model)
- B2C (or B-to-C) — Business to Customer (as your business model)
- Churn rate — Customers lost subsequent to acquisition in a subscription-based business model. (Think of a SaaS model here, not selling dresses on eBay)
- Burn rate (also known as the run rate) — How fast you’re burning through your cash in the bank
- FOMO — Fear of missing out
- Exit Strategy — How you will sell the company and make your investors rich
- MVP — Minimum Viable Product, or the bare minimum version of the product you could start selling to your customers
- Pivot — Change the direction for the company, start building something else or focus on a different market segment
- ROI — Return on Investment
- Ramen Profitable — When your company is profitable enough to cover the costs of running the business and cover the basic living costs for everyone working for the startup
- Runway — Basically a T minus the days you have money left, or in other words how long the company can run on a current Burn rate.
- SaaS — Software as a Service
- PaaS — Platform as a Service
- IaaS — Infrastructure as a Service
Of course, the list goes on and on and on … but luckily we have Google to figure things out.
Do I have the time for it?
Most of the time we (as the people) tend to think that we can make time for anything and try to fit things into our already busy schedule. If you have a family, spouse, a significant other, talk it through with them before jumping on the train. The decision that you are making affects those around you as well. If they are supportive of your idea/choice it will be a lot easier to perform well.