February 24th, 2007 - Don’t Quit Your Day Job (just yet)
Entrepreneurs tend to make a small number of early fatal assumptions or mistakes. (By “fatal” I mean fatal to the business…not to the entrepreneur).
One mistake is assuming there is little or no competition. Just because you have a stellar idea or there seems to be a stunning opportunity doesn’t mean that the competition isn’t going to be fierce. This is especially true in areas where the barriers to entry are very low. Another fatal mistake is assuming there is a market for the product.
To address these potential gotchas, the big questions that need to get answered are:
- Who, specifically, would be willing and able to pay for your products?
- What is the total available market size?
- What percentage of the total available market do you think you can capture?
- Is it worth your while to pursue this venture based on the perceived opportunity?
- Who are you likely to end up competing with? – VERY important.
- Who, very very specifically, are your customers?
- Why would they buy from you, as opposed to a competitor?
- How are you uniquely positioned to take advantage of this market opportunity
- Are your products truly unique? Will your products remain unique
- Are you *really* passionate about these products, and building a business based on them? Or would your time be better spend on things that are even more interesting to you?
Have you read The Silicon Valley Way ? It’s a digestible book to help you think through some of the major issues related to getting a new venture off the ground. Another good book is Jump Start Your Business Brain. And check out this interesting presentation on how to think about the notion of a value proposition from the author. And I would be remiss if I didn’t suggest you check out Guy Kawasaki’s Art of the Start.
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