What happens when you're thinking about starting your own company? Often, there's an idea that begins keeping you up at night. It might just be a glimmer of an concept...or something you think should exist in the world that just doesn't. Yet.
While the idea is just in its seedling stage, you should ask yourself:
- If you didn't follow through on this idea, would you be upset if someone else did?
- Is it something that continues to gnaw on the back of your mind for a while? (Not something that gnaws at the back of your mind like the excitement of money, but that it's something you absolutely need to do?)
It's important to very quickly determine whether your desire to create a start-up is out of curiosity and drive--or whether it's because you want to make money. While building a company can lead to the major success stories you might read about every day, the overwhelming majority of companies fail within the first two years of their existence. And you need to both know and accept this fact from Day One.
When my co-founder and I started Geoloqi, we asked ourselves a few questions to figure out whether we were really truly ready to start a company. Here are five of them:
Can you communicate your vision and solution effectively to others?
With a start-up, you begin with absolutely nothing. You have to communicate an idea to others and get them excited to work with your vision. Start-ups work best when you work with other people as equals--rather than having too much hierarchy. You'll have to communicate the vision to current and future employees, investors and customers, and everyone else around you. If you can't articulate your story, work with someone who can. It's nearly impossible to find a person with all the necessary skills to run a start-up alone, so know your weaknesses and hire people for whom those skills come naturally.
Can you delegate and work with others?
It is important to let go of ownership over a specific part of the project and let someone else take over. When you do this, it is important to trust them and let them do their job.
I've seen many small start-up founders have a difficult time recognizing their weaknesses and hiring people that are strong at what they are not. It's one of the most important aspects of a start-up, along with being able to adequately communicate your idea. If you try to do everything, you will fail.
It is fantastic to hire people who are more intelligent than you as long as you allow them to do their job and prove their worth. While you need to know enough about what you lack to determine if someone is doing a good job, you also need to give people enough room to do their best work. When we hired our first designer, we checked in with him and gave him overall direction, but he was free to build what he thought was best for the company. The clearer the vision, the less management is required. The best people move towards the same goal with their own best skill set.
Do you understand that there are no "overnight" successes?
You should build something because you're curious or you'd like to learn. For instance, you can't just "target teenagers," because there's "money" in doing so. A lot of times people get excited about an idea because they think there's a lot of money in it. No matter what, making money is hard. Really hard.
Pretend there's no way to make money off a mobile app. Would you still build the app? Yes? Then you know you'll have the stamina to make it.
"But," you're thinking, "there are so many overnight successes in apps!" No. Angry Birds creator Rovio made apps for years before it created Angry Birds. What are often written about as overnight successes were actually 10-year-long stories in the making. That's a 10-year "overnight success."
Are you OK with failure?
Interested in a less risky way to make money? Go become an investment banker, a lawyer, or a doctor. Get a job. It's easier than starting a business from scratch and fighting for years until there is profit, or having to lay off friends and family because there's something you didn't fundamentally understand about the given market in which you worked.
There are far easier (and safer) ways to make money than to build an app. Sometimes people hear this and tell me, "But these other things require hard work!" Do what you're passionate about, and anything that is worthwhile requires hard work.
Are you ready to test the waters?
Know that making the transition from a job where you are paid every two weeks to a bumpy life of uncertain revenue is not to be taken lightly. Have a plan (and a backup plan...and a backup to the backup plan) for when you leave your job. This backup plan can be the ability to return to your job in three months, save some money, develop a product with revenue, or find a team with which to build.
If you test your idea by building it as a side project while you're still fully employed, you may spend less time and resources on it and accomplish the same goal. Plus, you'll be forced to automate many parts of the start-up instead of spending too much time making decisions.
My co-founder and I started Geoloqi (which was acquired by Esri in 2012) as a side project, and we survived. No matter what the outcome of the start-up was, we were excited for the journey and the learning experience.
One more tip: When we were starting our company, something that helped both of us take the leap was Paul Graham's Why to Not Not Start at Startup. I suggest giving that a read in between answering some of the above questions.