How not to spend 33,280 hours of your life…
I just wrapped up the third semester of the Founder Institute in Seattle (#SEFI), the second that I’ve completed as the Director. Since the start of the institute in 2009 I’ve also had a chance over that time to mentor in other cities, specifically, Singapore and the Bay Area.
Over that time I’ve seen some common trends among the first time entrepreneurs (though this happens to repeat entrepreneurs as well), specifically as it relates to the ideation or early stage of the process. First timers have difficulty judging the validity of their ideas and often get stuck in small ideas or generally ideas that suck. But because we as founders are so close to our own idea’s its difficult to judge with some objectivity.
This isn’t intended as a complete list, but it’s a good place to start in judging your own idea:
- Is it a scalable or lifestyle business?
- Is it a big market. For example, if your idea becomes a company and dominates the market, is it a Billion $$ idea?
- Is there competition?
- Is this idea worth 80 hours a week for the next 8 years of your life?
Scalable or Lifestyle – Let’s start with the lifestyle business. These are typically services company (vs. product), where with every new customer you need to add staff to deliver the product. Typical examples are an Accounting firm or Mortgage Company. A scalable business is business you can make money at while you sleep. Using the same example, it would be QuickBooks or Zillow. If you don’k know which you are, look at your invoice. If there are hours attached to the billing amount, your a service. Services don’t scale the same way a product does. A lifestyle business will let you hire staff and provide a great living, but when you walk away or close the doors it’s very difficult to sell.
Big Market? Is the market your pursuing a big market or a small market. You can run a “successful” business and fill a niche, it just depends on how you define success. If your company becomes the dominant player in the market and runs <$15M a year in revenue and good profitability, it’s probably a good business.
What’s the Competition? Who can you identify as the key competition in your market? If your initial answer is that there isn’t any competition, that’s a problem. This is typical when your idea is too squishy… it’s not well defined and you haven’t identified the market.
80 hours X 8 Year = 33,280 Hours! If your going to spend that much time on your idea be critical of it now… not after two years of working on the idea.