Category: startups

The stereotypical founder is seen as someone with a single highly focused startup idea and vision. But, that is not always true.

Recently, I was reminded of this when I talked with a startup founder who was trying to choose between four startup ideas. Here’s the process I shared with her for choosing where to start.

Four criteria are important.

1. How passionate are you about the idea? When you think about it, is this the kind of business that you want to do for years? Or just it just a clever thought about how to make money, one that you don’t really look forward to doing. Will doing the business give you joy or seem like drudgery?
2. Do you have the skills and resources you need to make the product and run the business? If not, do you have a team that does? Are they already on board and willing to work with you? In other words, is this idea doable for you – or will you have to scramble to find a way to make it happen?
3. How connected are you already to your target market? Do you already know people who buy this sort of product? Or do you not even know where to find them?
4. Financially, is the idea attractive? Can you start it without millions of investment and years of development? Does it have great profit margin, clear repeat business, low customer acquisition cost, multiple products, or other financial advantages? If you are thinking the idea is a scalable one that could involve professional investors, is the market large enough to provide them a return?

At this point, many would simply score each idea on each question, total the scores, and select the top one. I think there’s a much better way. The idea is simple. Remove poor ideas until the only ones remaining are all relatively good. Then pick one.

Score each idea for passion. Be simple in your scoring – 1 to 4 or 1 to 10 – and don’t agonize over the score. Cross off the ideas with low scores. Even if something is doable and financially sound, if you aren’t passionate about it, it won’t be sustainable for you.

Next, go down the criteria list one at a time, score the remaining ideas, and lop off the low ones. Any idea that receives a really low score for any criteria will cause you problems. What remains is your short list of the best ideas. Even if your original list was huge, by now you should have a relatively small group of ideas.

Next, rescore the short list of best ideas. Even if they all scored the highest score during the first scoring, here you are comparing their relative scores. Are you more or less passionate (or skilled, connected, or financially optimistic) about each of the remaining ideas? Remove any that have at least one extremely low score. What remain are all relatively good ideas.

Now it’s time to quit using scores. By now, you probably have a sense for the idea you like best and want to do first. Don’t go by score, just pick the one that feels right. And start!

Oh, and put the other short list ideas aside for later.

I’ve seen a lot of pitches and heard a lot of investors evaluate them either during the pitch or privately after the fact. Here are 6 ducks you’ll want to have in a row.

1. You have something to pitch.
Make some sort of traction first. Don’t pitch a dream or fairy tale. Why would someone help you move your business forward if you haven’t already started moving it forward yourself?

2. You know your market, product, and technology inside and out.
My friends at 1517 Fund call this hyperfluency. You can assume that any professional investor already knows a fair amount about your market before you meet them.

3. That includes knowing your competitors.
I’ll never forget watching an investor googling during an impromptu pitch and interrupting the founder to ask about some close competitors the founder didn’t even know existed. Oops.

4. You know your unit economics.
It is all about making a return, after all. Facts talk. Wishes walk.

5. You have a clear bottom-up view of a market size large enough to provide that investor a return.
Their investment is about their economics, not yours. An investment of any size will require a large potential return, which in turn will require a large enough market to achieve that return.

6. You have a team lined up to accomplish what you say you will.
“We can hire somebody for that later on.” isn’t a good answer. Be real. Even if you haven’t hired them yet, know the experienced people who are willing to join you. Don’t ask investors to bet on a wing and a prayer.

Yeah, I know there are many more basics or essentials that others of you will have seen or experienced. But these 6 as a quick starter will get you far.

For more ways to help your startup be successful, grab my ebook Be Your Own Startup Coach today.