Over the years I have met with scores of people looking to do their own ‘start-up’. Almost without exception, these have been well meaning youngsters, passionate about their idea. And over time, I watched a number of them make the same mistaken assumptions. I am capturing here the Top 9 questions that I believe would be of relevance to anyone looking to venture out on their own:
- Have you discussed your idea with lots of relevant people? Not surprisingly, I find that a number of would-be entrepreneurs are very cagey about discussing their idea and garnering feedback, for fear of plagiarism. Today, everyone has dozens of ideas, and every would-be entrepreneur is too busy pursuing their own venture, to be copying someone else’s. Bouncing your idea off of many people is a great way to check on your assumptions and plug gaps in the business plan.
- Do you have the right team? Team is probably the Number One reason for a start-up to get funded. Or not. Make sure that you have a set of co-founders who have complementary skills, and the right chemistry between themselves.
- Is the idea scalable? Investors are keen to know “How big can this animal get?” Scalability is key to getting support for your idea. Frankly, if at the idea of your multi-year journey, you are hoping to turn out a profit of only a couple of lacs, then I would rather pass your idea by.
- Is it unique? Is your idea differentiated enough or are you a “me-too”? Ideas that are me-too, or easily replicable due to low entry barriers may not get support. No, but no thank you, India does not need another e-commerce site. Or food delivery app. Or laundry.
- What’s your go-to-market strategy? Products don’t sell by themselves. You need to have a detailed plan for reaching out to your customers. It is a myth that great products sell themselves. The road to perdition is littered with the carcasses of great products that no one ever heard of.
- How are you planning to use the funds that you are planning to raise? There are ‘kosher’ fund uses, like building or refining the product, or investing in a sales team, or developing the Go-to-market strategy. Asking for crores to spend solely on marketing will be met with a dose of healthy skepticism. And money required exclusively to pay salaries to the founders, will pretty much be realized only in their dreams.
- Who will vouch for you? People prefer to be associated with persons having a positive reputation. Or even a neutral one. They will actively avoid controversial people. Do make sure that you have a set of references that provide credibility. These could be your erstwhile employers, managers or even professors from college.
- What’s your Plan B? Most start-ups fail due to a gap in the cash bridge - an inability to raise the next round. Make sure that you have planned for contingencies, well out into the future.
- What’s the real world problem you are trying to solve? Is your idea going to make people’s life easier and give them back some time? Is it going to make an existing system faster, cheaper and generally more efficient? Or, are you trying to make a ‘differentiated-and-never-before’ recipe of Papdi chaat, which is cute, but doesn’t really impact people’s lives.