Are You Ready to Start a Business? Take This Test
I believe strongly that entrepreneurship is the best economic phenomenon that the world has to offer. While the odds of success are low, the pursuit of start-up success is a way to spend time doing work that is meaningful to you, your employees, and your customers. And if you defy the odds, you can change the world.
I have tried to spend time living that belief. Since 1994, I have operated a profitable consulting and venture capital firm and in 2005, I started teaching strategy and entrepreneurship at Babson College-- which U.S. News & World Report just ranked the best in the country for entrepreneurship for the 17th year in a row.
Since April 2011, I have conducted over 200 interviews with entrepreneurs-- about 160 of which were the basis of my 2012 book, Hungry Start-Up Strategy: Creating New Ventures with Limited Resources and Unlimited Vision.
Not everyone is cut out to be an entrepreneur. To help you figure out whether you are one of those and whether you have the right idea on which to get started, I devised a test that will help you assess whether you have what it takes in six key entrepreneurial action arenas.
The idea behind this test springs from my interviews with entrepreneurs. I found that the best ones excel in six entrepreneurial action arenas:
· Channel talent’s urge to change the world
· Pick markets that inspire passion and target unrelieved customer pain
· Raise capital to optimize three critical growth stages
· Create A-Teams with world-beating clock speed
· Provide customers a quantum value leap - e.g., more bang for the buck
· Fight complacency with intellectual humility
To take the test, think about the two questions I included in each of the six entrepreneurial action arenas and answer them based on specific examples from your experience.
If you can answer yes to all the questions in the test -- the full version of which is in Hungry Start-up Strategy --I think you are ready to begin your entrepreneurial journey.
Do you have a compelling reason for starting the venture that will help galvanize employees?
Do you have enough passion for that mission to work at least 80 hours a week with little pay to realize it?
Do you have a product concept that will relieve customer pain better than competing products?
Are there irresistible trends that could propel the growth of that industry?
Are you prepared to bootstrap your venture until you can get paying customers?
Do you have a winning track record, charisma, and a compelling vision for how you will gain market share quickly?
Building the team
Can you hire an A-Team of technical, marketing, and other key people to complement your skills?
Can you build a strong culture that will motivate that talent to solve problems effectively?
Can you find customers with unaddressed pain?
Can you build a series of prototypes and get feedback to build a product that delivers a quantum value leap?
Adapting to change
Can you set up listening posts that will give you a head start on critical industry changes?
Can you change your venture’s strategy to capture the opportunities and defend against the threats?
Strategy consultant, startup investor, teacher, corporate speaker, pundit, and author of 11 books, Peter Cohan has invested in six startups, three of which were sold for a total of $2 billion. Before founding Peter S. Cohan & Associates in 1994, he worked with HBS strategy guru Michael E. Porter.