I’ve talked a lot about the importance of "doing stuff," randomness, chaos, the risks of long term goal setting, and the connection between the bullshit meter and excessive chatter around "strategy".
I do firmly believe that constantly acting and iterating and making meaning as you go along is important because speed is important. And because experimentation and real time market feedback is super useful. But today I want to counterbalance these points. After all, talking and strategizing without actually doing stuff is useless. But doing stuff without actually thinking is dangerous.
My friend Charles Hudson has a good post today about questions you should ask yourself before starting a business. He smartly suggests to not worry about the format and just focus on grappling with important questions. All entrepreneurs, it seems to me, should be able to think and plan ahead and contextualize some of the day-to-day chaos in a larger framework without resorting to long business plans, outside consultants, or buzzword-filled strategy nonsense. Hudson:
1. What are my top 3 milestones and what’s it going to take to reach each of them? Pick a few milestones that are meaningful. Acquiring a certain number of users, releasing X number of versions, achieving PV/UU metrics all work. Guesstimate what it will take to get there and then (at least) double your estimates for time and cost.
2. How large is the audience today and how am I going to attempt to reach them? It´s always good to do a quick market sizing and figure out how you´re going to get your users. Are you going to go national from day 1? Are you going to mine existing networks/communities? What’s your notion of what user acquisition will cost and how long it will take?
3. What are 3 things that could happen in the market that would make me rethink the wisdom of this idea? I personally think it´s always a good idea to have some sense of the types of signals you could see that would make you rethink whether you´re on the right track. For example, if your strategy is predicated on the belief that Yahoo/Microsoft/Google are too slow to pick up on the market you´re targeting, seeing the 3 of them release products in quick succession would be a good thing to note.
4. What are the most important metrics that will tell me whether I’m on track? Every good company I’ve seen has a few (as in 3-4 tops) metrics that they track on a daily basis. They know where they stand on those metrics at all times and there´s a good story for why those metrics matter.
5. Where am I going to get the first 5/10/15 people I need? I´m always surprised that more people don’t think about this one. If you´re starting a company, chances are you can´t do it alone. Where are you going to get those first few employees?
2 comments on “Questions to Ask Yourself As You Start a Business”
#4 seems most important in my opinion. Even with a initial mediocre idea and strategy you can adopt the new opportunities and changes quickly if you would be conscious enough.
#5: Thinking about 15 first people?! I guess only 3 is enough. 15 is an overkill for a startup. If you are good enough you will be a talent sponge, no worry 😉
I really like that #5 is included. It’s not something I had explicity seen included in lists before. I dont necessarily think the number is important, just so long as you are mindful of where you are getting talent.
I remember reading a while ago on this blog about class A’s hiring B’s if they were good and A’s if they were really good. I forget the exact terminology used, so I can’t search. Anyone remember? I’d be interested in reading more about this kind of thing. For me, it would probably be the one thing that would have the greatest impact on my capacity at this point in time.