Top questions you should ask yourself
Anyone considering becoming an entrepreneur should first ponder some important questions. Does your idea make for a viable business plan? Here are questions that can help answer that. Some easy, some hard; answer them honestly and you will likely know better than anyone - should you accept the risk, responsibility and reward that go with a technology startup? The 20 Questions fall into 4 categories. While quality ideas come from talented individuals, quality startups require talented teams.
1. The People.
What have the individual principals accomplished, professionally and personally, that would indicate that a new technology venture is an attainable, desirable goal?
What are the employment histories of each principal? Senior managers or new graduates? How does it relate to the venture opportunity?
What are the educational backgrounds of each principal? Diverse disciplines? Graduate degrees?
Who would be the most prominent or powerful individual to speak on your venture's behalf and in support of your self assessment? Is there anyone else, individual or organization, in your corner?
Where is headquarters? Are all of the founders based at headquarters, or in other places or regions of the state, or in other regions of the country?
Who and what are missing? What skills or team members still need to be located for success to take place? What is the plan to recruit high-quality people to fill the holes?
2. The Opportunity. In cases where the strength of the team is overshadowed by the power of their ideas, a clear perspective on the target market and its economics facilitates risk assessment and decision making.
Who are your customers? How do they make purchase decisions? How compelling a purchase is this product/service for them?
What is the price for the product/service? How is that calculated?
What are your sustained needs for capital equipment, raw materials, supplies and personnel to maintain a critical mass of available product/service?
How will you market the product/service? Of the target customers listed, how specifically, will each be reached? How much will it cost to acquire one customer within each target group of customers?
How much does it cost to produce and deliver the product/service? How much does it cost to provide customer support post-purchase?
Who are your competitors? How easy or difficult will they make it to retain customers? What are their strengths and weaknesses?
3. The Things Beyond Your Control. Sometimes being smart is identifying the things you don't know. Likewise, sometimes being wise is identifying the things you can't control.
How can you see advancing technology change the market you are targeting?
Is there anyone else who could observe and exploit the same opportunity, and how likely are they to have a substantial competitive advantage?
What role can or does government regulation, policy or law play in either your venture, the market it targets, or the revenues you expect to obtain?
Can your product/service offer value to overseas markets? How do the international opportunities compare to domestic opportunities for your product/service? What additional risk does serving international markets entail?
4. The Future. Pull together information from the other categories and gauge the future for the proposed enterprise.
What is the total amount of money needed to launch the venture? How long until the venture reaches positive cash flow?
Once in the black, how long until the venture really gets going? What is the size of the potential long-term payoff?
What is the probability of ever reaching that maximum payoff? Short of the maximum, what is the probability of still realizing a significant return? What is the probability of realizing a total loss for investors? Under what scenarios would each of these probabilities play out?
What exit options are available for investors to get money out of the venture if it becomes successful?