First Time Entrepreneur’s Questions – A Baker’s Dozen

Like many things in life, you only get to be a “first time entrepreneur” once. Like any first love, this is very special.

Think about this irony:

First-time entrepreneurs have a major advantage – they don’t question everything before they leap into the business. In many cases, they don’t know what they don’t know.

First-time entrepreneurs have a major disadvantage – they don’t question everything before they leap into the business. In many cases, what they don’t know can surprise and hurt them.

If you are a “first-time entrepreneur” crafting your new venture, try (honestly) answering these questions.

A disclaimer: The questions are slightly biased towards those that are bootstrapping their ventures. The majority of the first-time entrepreneurs will choose the bootstrapping option for obvious reasons.

What exactly is your idea?

Can you clearly articulate your idea?

How compelling is your idea?

Is it an idea whose time has come?

Are you early into the game or are you late into the game?

If someone else came to you with an idea and asked you for an objective opinion, what would be your response?

If that same person asked you for three reasons why this idea is destined to fail, how would you respond?

Instead of you, if one of your friends came to you with the same idea and asked why it might not work out, what would you say?

Who will pay?

Chances are that your idea will be to create a new product or a service.

Who exactly will pay for this product or service? Why?

How much will they pay?

Why do you think they will pay that price?

It is important that this question is answered with some kind of market data rather than from your imagination. If you think “someone” will pay, why not talk to that someone and ask him if he or she is really willing to pay?

A big trap to avoid is to start talking to everyone who will get “paid” in the ecosystem. It takes up the same amount of time, but will go nowhere if you have not been able to convince folks that have to “pay to play.”

A couple of examples:

If you are setting up free online storefronts, store owners are “getting paid,” and buyers of items are “paying to play.”

If you are setting up a dentist referral service, dentist are “getting paid,” and patients are “paying to play.” This IS the case even when you are charging the dentist a monthly fee because if no patients get added because of your referrals, sooner than later dentists will bail out of the service.

Why should someone care?

Yes, I am sure you have already identified a market segment. Whoever is in your target, the key question is, “Why should they care?”

In other words, once you explain your value proposition, if someone comes back and asks you – “So what?” what will be your response?

Why do you think you are the RIGHT person to execute on this idea?

If your first reaction to the above question is – “Of course, I am the one who came up with the idea, aren’t I?” then you are putting your ego first while your objectivity is taking a vacation.

You need to answer this question to the world around you, not for yourself.

While your idea may be brilliant and flawless in theory, most often, the idea is only a tip of the iceberg. The bulk of the magic happens in the execution.

What makes you think that you have everything it takes to execute brilliantly on this idea?

Agreed, it is impossible for ONE person to come up with everything that’s required to bring your idea to reality.

So, an alternate question – What makes you the person that will attract and retain the time that will do whatever it takes to bring your idea to life?

During my speaking engagements, I usually say that – “Inside your head, there is an idea highway where you go from concept to launch with no speed bumps, no roadblocks, no detours or bad weather. The reality, of course, is very different.”

What are the roles of your team members once the business gets off the ground?

Imagine that your startup group is really crew members in a movie production unit.

Would it be fun if everyone in the team wants to be the director of the movie?

If your team members display that attitude, it is “trouble in the making.”

Think about it…

Are the future roles for your team members identified? Are your team members comfortable with these roles? Are they willing to do whatever it takes to play the roles assigned to them? Are your team members willing to change (or step aside) when the time is right?

How are you going to split the equity?

“We will just split it equally because we are all friends” is a feel good answer that will make everyone in the team very happy. Unfortunately, that is wrong most of the times. More about that later in the book.

One issue you have to deal with is the roles and responsibilities and the other one is how to split the pie amongst yourselves. Who is getting how much? What is the rationale behind this decision? Why do you think this is fair distribution? Do all of your team members think it’s fair?

This is an important question and needs to be discussed right up front if possible. I have seen instances where people work for more than a year without discussing this and at the end of the year, everyone wants (and feels they deserve) to own more than 50% of the company.

How much money are you investing in the business?

Sometimes there is also a fantasy that just by working nights and weekends, the business can be born. It may be possible, but it is definitely not something that you can bank on.

So, the question to you is “How much money are you and your team members investing in this new business?”

If it is “nothing” because you will simply raise all the funds from investors, you are looking for trouble.

Typically, people are willing to squander their time, but not their money (although they keep saying time=money). So, if you are just willing to put in your time and not a single penny of your own money – think again about your seriousness on this project.

Think about it. You are asking investors to believe in you and invest the money. However, you are not investing any money of your own but you still want them to believe that you believe in the business. Something does not add up, don’t you think?

Is anybody else already doing what you are thinking of doing?

“Nope, we don’t have any competition” is a wrong answer. Any time. All the time.

Let’s do a thought experiment. If you really think nobody else is doing what you are doing, it might mean one of the two things:

• You have hit upon something spectacular that NOBODY else thought of or
• There is simply no market for what you are thinking about.

Remember that your product or service is always competing for attention in comparison to something else that’s out there. The question therefore is, how will you differentiate yourself to win over the slice of attention and mindshare?

When are you planning to get into the venture full time?

You have worked hard. You lost count of nights and weekends that you worked to get the venture off the ground. The question remains, When will you leave your present job and join your venture full time? What is the criteria used to determine this transition?

This seems like a simple question, but it’s an important one. People around you (especially the ones you may be courting for investments) are making judgments about your commitment AND belief in the business based on your actions.

Do you have a mentor?

Like I said before, it all seems easy at the planning stage. If everything works according to the plan on the paper, then you don’t need to have anyone or worry. Unfortunately, how things unfold in reality may be very different from your plan on the paper. Any new venture will be filled with surprises – good and bad. More bad than good.

You need help.

Sorry, scratch that.

You need very good help all through the journey.

You need a mentor, a sounding board to work with. The questions you are reading are a small sample of questions a good mentor will ask and hold you accountable for. Building relationships with and investing in mentors is worth your investment of time and energy.

Why do you want to do this?

It had to come, the question of purpose.

Each entrepreneur has a different reason to be an entrepreneur.

What is yours?

Once you answer this, think whether becoming an entrepreneur is the only way to get what you want (or want to become) as a result of pursuing this dream. It is important to answer this honestly and not come up with an answer that you think the world wants to hear.

In the next section, I have outlined ten questionable reasons to become an entrepreneur. For now, it is worth reflecting on your own whether YOUR reason is compelling enough to go on this adventure.

Do you really know the cost of pursuing this dream?

It is our tendency to think only about the hard costs that are associated with the project. You need to consider ALL the costs associated with pursuing your dream.

These costs include, but are not limited to:

• Time away from family
• Time away from friends
• Opportunity cost. Believe me, there is an opportunity cost because you can’t be doing two things at once.
• Your nights and weekends
• Your reputation

There is more and only you will know what else you are risking.

Is it all worth it?

What is success for you?

How do you know when you are successful?

As you grow your venture, several things happen – your dreams will grow, your opportunities will expand, problems will emerge and your needs will change.

The key question is “What should happen that will make you feel that you succeeded in this venture?”

This is also an important question because it will influence your thinking about the “balance” aspect of life. You definitely don’t want to be alone when you are celebrating your success and fame.