Startups · Entrepreneurship

What is the homework a tech startupreneur / tech founder must do before starting a venture?

Rajneesh Jain Tech Startup Sales Consulting | Sales Consultant | Mid Size & Growing | Business Consulting | Business & Sales Skills

October 6th, 2016

One thing which we find after working with startups and growing entrepreneurs is, the business challenges take them by surprise. I personally never believed the stats that 93%+ startups close within 24-36 months. Now, when we have practical experience, to great extent, we tend to believe this.

Recently, Mr Kris Gopalakrishnan also expressed the same views.

"Almost seventy percent of start-ups will fail. About 20 percent will survive but will not grow. They will remain small enterprises, and may be only five to ten percent will become large and scale up - that is the spastics globally," - Kris G.
We don't want to scare you, but at the same time, what's the point in coating with sugar, when its a bitter pill. It is scary.

We see Founders, Startupreneurs, Growing Entrepreneurs are getting frustrated when they face these burning questions, which they thought they would never face.  

Imagine how peaceful & profitable your journey would be, when you are prepared to overcome most of these business situations !

After working with many Entrepreneurs, we collated many such questions.

Find few sample questions, and if they sound alarming:

Ist Section > Mindset 

Q) Does uncertainty paralyse you? 

Q) Are you afraid of failure, social embarrassment and public humiliation? 

Q) Can you afford to sacrifice your income for say 24 months or may be more? Do you know there is no guarantee that such sacrifice will pay you off later? 

Q) How much time and energy you think should be distributed between (out of 100%):  Production/Development - ____% Operations - ____% Sales & Marketing /Go-To-Market - ____% 

IInd Section > Business Proposition

Q) What’s your revenue model? Is it one time sale or you have upsell and cross-sell? 

Q) What is your depth and breadth strategy? Do you have post-sales services recurring revenue potential? 

IIIrd Section :CoFounders Chemistry & Economics

Q) Are you fine with 4 years of vesting period? Would you be willing to forfeit your shares in case you decide to leave before the vesting time-period and/or not meeting the KRA requirements? 

Q) Are you fine with “Rewards & Penalty” Equity & Profits sharing system: 

For eg Rewards : Bonus, extra perks, chances of increase in equity share

For eg Penalty : Reduction in equity share by x%, % reduction in salary 

Q) How’s the accountability defined? Do you clearly have one neck to choke when it comes to revenue and sales? 

Like this, we feel there are total 6 areas : Scenarios Simulation, Core Business Skills & VC/Investors' Zone. 

Not to mention, you can procrastinate but can not avoid forever. When you face them during the course, most find it tough to handle and overcome.

Would be helpful to get more questions which you face, faced or think will face, and for which you need answers.
Check my LinkedIn post for complete details.

Keno Mullings Problem Solver

October 7th, 2016

In addition to completing your Business Model Canvas also complete one or more Value Proposition Canvases.

If your product is a software product, also complete a Software Development Canvas and generate your spec using a tool like the one I created - appCRUD. Generating SW spec early is necessary to realistically scope your startup needs.

Martin Omansky Independent Venture Capital & Private Equity Professional

October 6th, 2016

Responses this far are accurate, but wordy and incomplete. Here is our view of the required homework: (1) patent, trademark, and copyright search; (2) size & nature of addressable market; (3) competition; (4) possible barriers to e try of new products/services (tradition, regulations, brand loyalty); (5) alternative business models; (6) costs and pricing data; (7) extent of comparative advantage; (8) capabilities of management and staff; ability of entrepreneur to be flexible and to listen to grey ears advice. Few entrepreneurs do this homework, relying instead on passion, prayer, ego, luck, and the belief that money will solve problems. Sent from my iPhone

Saravjit Singh Independent Consultant and Trainer

October 7th, 2016

My advice - spend a lot of time on creating a solid business case - I suggest using Business Model Canvas. This is a nine box format - covers all main points that are success related.
Keep everything as simple as possible. Rope in a group of experienced advisors. They got their experiences mostly from the failures and pitfalls they faced - and so they will guide you very well. You, as a startup with limited resources, just can not afford to learn by making your own mistakes when advisers are there to assist you,

Martin Omansky Independent Venture Capital & Private Equity Professional

October 6th, 2016

Forgot 'timing' and 'cash needs'. In summary, proper presentation and execution depends on a comprehensive knowledge base. Sent from my iPhone