5 Answers to 5 Key Entrepreneurial Questions
Entrepreneurs have a ton of questions. Sometimes it’s hard to find straight answers to them. To close that gap, below I’ve shared five of the most common questions I hear from entrepreneurs. I’ve also shared my thoughts on some direct answers to those questions.
So whether you’re thinking about starting a business, already run a business, or help advise people who are doing either of those two things, I advise you to check out these questions and ponder the answers. And if you’re wondering what’s up with the monkey, I simply thought it was funny. I mean, really – who wears wide pinstripes these days?
1. When do I talk to the venture capitalists?
Five years from now. Seriously, entrepreneurs need to get an understanding of the funding ladder. Typically it starts with your own cash. Then friends and family. Then angel investors. Then hopefully cash from the operations of your business. And eventually seek out venture money.
Along the way you should also be seeking out non-dilutive capital like loans, grants, etc. Spend some time getting smart on how money is raised, deployed, and the equity/ownership implications of each choice. Venture capital is much farther down the line for your business than many folks think.
2. I’m a first-time entrepreneur. When should I launch my business?
You shouldn’t. I highly suggest getting some experience both in corporate environments as well as with other entrepreneurial ventures. You don’t know what you don’t know. Spending some time in an existing startup or young company will be a wonderful education on what to do, what not to do, and will also help you assess your personal fit with the entrepreneurial lifestyle. It’s not for everyone!
If you spend some time in corporate, you’ll learn how big companies make decisions, how they work with/buy from startups, and how they think about value creation. Once you’re armed with that knowledge, you can build a much more successful startup company because you’ll better understand your prospective customers, given most startups sell their products and services to larger corporations.
3. Where do I meet people who can help me grow my business?
You should constantly be out networking. Invite cool entrepreneurs to coffee. And be on time and pay for their coffee! They’re doing you a favor! Attend networking events. My favorite is WakeUp StartUp, which is held the second Friday of every month.
Watch other entrepreneurs pitch their ideas, meet prospective partners, clients, and employees. You have to step away from the computer and go meet people in person if you want to build your business.
4. What’s the biggest mistake you see entrepreneurs make?
All they do is talk about their product. As a customer or investor, I don’t care about your product. I care first about the problem you’re solving. If the problem isn’t compelling and the size of the problem isn’t exciting, then your product is completely irrelevant.
I see so many entrepreneurs leading their conversations with a discussion of how awesome their product is and what all the features of the product are. If you can’t get your audience to identify with the problem first, you’re wasting your breath. If the problem you’re solving resonates with me, I’ll be much more interested to hear about your product and how it solves that problem.
5. What has been the key to the success of your business, thoughtLEADERS?
I do something I love. I’ve been fortunate enough to find something I love doing −speaking and teaching about leadership and other critical business skills− and that people are willing to pay for.
The problems my firm solves are very painful ones for organizations: poor leadership, weak communications, slow decision making. Those problems are so pointed that when companies learn we have a compelling solution for them −practical and pragmatic training courses that build skills in that arena− they’re very willing to pay for those programs.
The great news is, I love teaching those skills.When you find the intersection of something you love doing that people are willing to pay for, you’ve got a winning business on your hands.
– This post was originally published in The Metropreneur but I figured my audience here would appreciate it too.
Good article Mike, especially #4. I’ve talked with a lot of people who want to start a business and do so with a product focus rather than a solution focus. I ask them the same question, “what business problem are you trying to solve?” If it is just a neat tool, then maybe they can sell it to their IT friends, but it most likely will not be a viable business.