5 Ways to Avoid Being Run Over On the Entrepreneurial Highway

Last week, I wrote about my decision to exit the entrepreneurial highway by selling my business. As things wind down, the mind races with what’s next. Despite being eager for something new, circumstances have changed since my last start that will slow me down. I have a young child which requires a more thoughtful next move and the financial flexibility to proceed slowly. All business starts should have the same level of thoughtfulness, even if compulsion or excitement tries to get in the way.   In other words, before getting on the on-ramp, check your mirrors and blinkers, it’s going to be one hell of a ride and you’ll need to hold on with both hands.

The 5 pre-departure requirements of any startup venture:

1. Have a unique product, service, or market opportunity – Some entrepreneurs are lucky enough to create something that is truly disruptive and doesn’t exist anywhere. In these cases, this step is easy. However, most startups are a small-scale innovation on an existing product or service, not a major evolution. Whatever the idea, it must have a unique value proposition, and there must be customers that will appreciate it. If you can’t be different in some small way, there’s no need to exist.
2. A plan to capitalize on that product, service, or niche – “If you build it, he will come,” only works for omniscient voice-overs in Kevin Costner movies. A unique selling proposition does not mean customers will simply appear. Building a business requires a plan for acquiring, and retaining, customers. A great idea or product is useless without someone to consume it, just ask Hiroshi Udea who invented and patented the selfie stick in 1983.
3. Sufficient capitalization to achieve the vision – 29% of startups fail after running out of money. Having enough cash to launch is not enough. The business must have, have the ability to raise, or have the the ability to borrow enough money to guide the company through expected and unexpected growth or challenges.
4. Have the passion and commitment for the idea –Similar to last week’s post, building a startup cannot simply be about money, you need to have a drive to realize your vision. This does not mean “loving what you do,” but that you have to be willing to make the sacrifices, over a long period of time, that will be required to build a business.
5. Have to have the energy to execute – Being willing to make the sacrifice is one thing, but having the sheer physical ability to do it is another. There is a reason why so many Silicon Valley startups are headed by 20-somethings: starting a business requires an immense amount of energy and stamina. Starting a business means lots of long days, including some all-nighters, and an overall grueling physical and mental toll. Without the ability to stand that daily punishment for months, or even years, the business will not succeed.

To be candid, I have left off at least one, or even all, of these checks from the planning phase of all of my previous startups.  At some time in the lifecycle of a business, you will need to address ALL of these points. So, whether you are still trying to decide to venture out on your own, or have already done so, evaluate this list sooner rather than later. If your business plan is deficient in one of these areas, find a solution now, not after spending thousands of dollars or hundreds of hours or both. Entrepreneurship is a superhighway, and no one wants to be in the fast lane riding a bicycle.