By Fernando Berrocal
As a serial entrepreneur, you'll have to learn a lot from the mistakes that you'll make along the way. These lessons will impact your thoughts about what it takes to launch a successful business. While the following criteria are by no means a guarantee of success or the only ones to consider, you might feel that they may be quite beneficial to your startup’s road map. So, in no particular order, here are six important questions to ask to verify my business ideas, and which now shape what you might look for in an investment. Hopefully, the following list will assist you in validating your concept:
An Exceptional Entrepreneur with a Unique Perspective: Does the entrepreneur have the drive, energy, enthusiasm, and dedication to embark on the difficult process of starting a business? Is it possible that they’ll be able to recruit a top-tier team? Is the concept you're working on based on something you know a lot about and have a unique perspective on? An entrepreneur who works in a field in which they have no experience or expertise rarely succeeds.
Startup’s Market: On the marketing front, there are three main types of startups and they are the following ones: Firstly, for “B2B Startups” - Is a person or a group experiencing excruciating pain? Is that person or group in a position to spend money to solve the situation? Then, for “B2C Startups” - Is there enough incentive for the customer to desire to utilize your product or service? Finally, the “Size of the Market” - Is there a sufficient number of individuals with this pain/motivation to start a major business?
Startup’s Product: Is this product/service sufficient to meet the need? Is there a long-term distinction and entrance barrier that can be sustained? The distinction must be significant enough to overcome any big competitors whose size, distribution, and customer base would give them an instant unfair advantage if they competed, even with a subpar product.
Startup’s Business Plan: Is it possible to create a profitable business model around the solution? The majority of startups fail because it costs them more to sell their product than they can profit from it. As a result, identifying a cost-effective strategy to market the product is an important component of developing a sustainable business plan. The second half is figuring out how to monetize each client effectively.
Startup's Management Team: Do you think you've got the qualities of a good management team? It is generally accepted that a strong management team is critical to an organization's success. Players who are A attracted to other A players. C players are drawn to B players. As a result, the starting lineup should ideally consist of all A players.
Startup’s Efficiency of Capital: Is it possible to build the business in a capital-efficient manner? With lower exit values, the only guaranteed method to assure a decent return for both the entrepreneur and the Venture Capital (VC) is to grow the business with a little amount of cash.
In summary, two of the most common problems that most people find while listening to pitches from entrepreneurs originate from the same entrepreneurial trait: entrepreneurs are generally highly enthusiastic about their product or technology by nature. This is a wonderful thing in and of itself, but sadly, their enthusiasm frequently blinds them to crucial issues:
- They don't think about how they'll get consumers cheaply. After all, they assume people will either beat a path to their door or that their product will go viral because everyone will love it so much.
- They don't consider whether the problem that their product is supposed to answer is serious enough for the client to overcome reluctance and buy it.
Ready to bring your startup to the next level? Apply to MassLight’s next batch. MassLight supplies capital and a dedicated tech team. We take equity in return. Have questions? Refer to our FAQ page.