- Find a partner you trust. Someone with complementary skills and experience that you like and know will be honest and upfront about their goals and level of commitment. It’s more fun that way and your odds of success will be exponentially greater.
- Clearly define roles and responsibilities of everyone involved on a day-to-day basis with the business BEFORE you determine ownership structure. For an early-stage business, this issue is of paramount importance. It’s the key to ensuring everyone’s incentives are aligned for the longterm.
- Have a clear idea of your target market. I don’t mean this in the strategic sense. I mean it in the sense that you need to have 5 (or more) individuals/companies in mind that you KNOW would be eager to pay for your service. Find them and talk to them.
- Have a good idea of how you will make money. In my experience, pricing model, price point, etc. can and should be somewhat flexible. Regardless of the model and price(s) you arrive at over time, you need to know you can charge something for it and enough to generate meaningful returns in a relatively short period of time.
- Think through your exit. Don’t build the business with an exit in mind but at the same time understand there will likely be one. This will also inform your financing plan. When you’ve thought through #2 and #3, the you’ll have a good idea if you’re building a $10M business or a $1B business. The former is interesting to a lot of angels while the latter is interesting to angels AND VCs. The sooner you know which of these two paths you’re heading down, the closer you’ll be to raising the funds necessary to grow the business.
- If you need to, raise a relatively small amount of money from family and friends. People that know you personally and believe in YOU. Use this money to prove the concept.
- Unless you’re within 90 days of a larger financing round (term sheet(s) on the horizon), do not mess around with convertible debt. A series A (preferred) is the better way to go.
Sunday, August 24, 2008
Seven Tips From Ben Straley - Reachmachines
My smart friend Ben Straley, founder of Reachmachines just coalesced 7 great points to address slash questions to answer up front as an entrepreneur - none of these are big secrets - just a nice list of the puzzle pieces you want in order to start a successful business:
Posted by Mathew Johnson at 9:20 AM