It's widely known that 90 percent of entrepreneurial ventures fail. Most entrepreneurs start their businesses because they want to create something successful for themselves and their investors. They start with a desire for success and work backward, looking for the vehicle for that success.
What they don't do is ask themselves the simple question, "Where do I find wonderment in my life?" This question is key, because it tunes us into our heart, and that makes the difference between passionately believing in the business you begin and just starting one.
Last year, I set up a meeting between a young, talented, incredibly bright young entrepreneur and a well-known, successful venture capitalist. I wanted the young entrepreneur, whom I respect, to pitch his idea to the VC. In turn, I wanted this VC to address the strengths and weaknesses of the pitch. When the pitch was over, the VC acknowledged the potential value behind the business, and I could tell he was even considering making an investment. Then the VC asked the entrepreneur, "Why do you care so much about this particular business? Where does your passion come from?" The entrepreneur replied that he wasn't tremendously passionate about the idea. He only thought it was a good concept that could be very successful. With that response, the VC thanked the young man for taking the time to meet, and passed on the idea.
I applauded the entrepreneur for his honest response and suggested he look inward before continuing work on the idea. Over the following several months, the entrepreneur continued to invest his own money to test his business concept. He wanted to be sure the idea was indeed strong and he also wanted to understand if he had true passion for the business.
What did he find?
His idea was indeed a strong one that got traction from customers in a relatively short time frame. The result of the traction and his meetings with potential seed investors was that a lead investor came to the table to lead a seed round of investment.
The entrepreneur realized he couldn't connect his true passion with his desire to build this company. That epiphany led him to make a very gutsy and mature decision. With only his own money thus far invested in the company, he chose to close its doors, pass on the investment opportunity, and focus on something he was passionate about.
Watching this young entrepreneur go through the difficult steps to truly understand what he wanted for himself and his ultimate company was inspiring, because he did the work early on to better understand what created his drive. The result of this work will more likely put him in the 10 percent who give birth to a successful company, founded from a place of passion combined with strong business judgment.
Today, this entrepreneur has a business generating over $100,000 a month, with ARR that should increase to more than $1.5 million by the end of 2017. He's done all this with a staff of five and expenses right around $30,000 a month. The company is in its infancy, and he's still getting his foundation in order. He has yet to take outside investment. But he is approaching this business from the right place. He understands the passion he has for what he is doing, and as a result is able to motivate himself and his team.
Below are the key questions entrepreneurs should ask themselves when starting a company.
1. Where do you find wonderment inside yourself as it relates to your idea?
This is not about what makes you just happy. It's about what makes you curious, intrigued, and excited all at the same time. If you can create from this place and balance that passion with the right data points for your chosen industry, you are setting yourself up for true success.
2. What do you want your customers to feel while using your product?
You're passionate about what you do. What will make your customers feel the same excitement? Put yourself in your customers' shoes. This will allow you to tune in to what's important as you make decisions.
3. What pain points are you solving and for whom? Do you have more than one type of customer? If so, what pain points are you solving for each customer?
Maybe the thing that excites you about your company is that you are able to alleviate pain for your customers. Know what you are solving and for whom you are solving it. If your customers see value, your shareholders will as well. Focus on the customer.
4. What is the mission of the company and is it purpose-driven?
Create a purpose-driven mission that is connected to the wonderment inside of you. When this connection is made, you can make strong, clear decisions.
Understanding the value in answering these questions and using the answers as data points alongside the traditional data one must assess in launching a venture--which includes a tremendous amount of research about the market opportunity and the competitive landscape--puts you ahead of most and will give you the best chances in achieving your desired success.