Code Show Kickoff: Damon Young

The Pre-Startup Questionnaire

Agenda About the speaker The startup landscape Questions every entrepreneur should answer What’s the point? Review Q&A

About the speaker

The startup landscape

Questions every entrepreneur should answer

What’s the point?

Review

Q&A

“ Damon Who?”

The Startup Landscape Small businesses make up 99.7% of all the private, non-agricultural employers in the U.S., employ roughly half of the nation’s workforce and account for roughly half of the nation’s sales. 2 out of every 5 small businesses fail within the 1 st 2 years. 3 out of 5 fail within the 1 st 4 years. Why?

Small businesses make up 99.7% of all the private, non-agricultural employers in the U.S., employ roughly half of the nation’s workforce and account for roughly half of the nation’s sales.

2 out of every 5 small businesses fail within the 1 st 2 years. 3 out of 5 fail within the 1 st 4 years.

Why?

Fruit of the Poisonous Tree Most small business failures have little to do with market forces Most have already failed before a single line of code has been written Personal Flaws Conceptual Flaws Many of these flaws can be addressed – but many would-be entrepreneurs don’t Answering many of these questions honestly can mean the difference between success & failure

Most small business failures have little to do with market forces

Most have already failed before a single line of code has been written

Personal Flaws

Conceptual Flaws

Many of these flaws can be addressed – but many would-be entrepreneurs don’t

Answering many of these questions honestly can mean the difference between success & failure

Question #1 – Why? Most common answer – “I want to be my own boss” Especially in tough economy “ Boss” is a loaded term. What do you actually want? A promotion? To go freelance? To be a business owner? “ Supervisor Plus” Legal responsibilities Financial responsibilities

Most common answer – “I want to be my own boss”

Especially in tough economy

“ Boss” is a loaded term. What do you actually want?

A promotion?

To go freelance?

To be a business owner?

“ Supervisor Plus”

Legal responsibilities

Financial responsibilities

Question #2 – Why take the financial risk? Most common answer – “I want to be rich” “ Rich” is also a loaded term Is someone drawing a $500k salary in a corporate job rich? We’re really speaking about financial independence, i.e. your business is an investment property, e.g. Commodities & stocks Real estate To achieve a comparable level of ROI, you’d have to invest considerably more up front capital, but they require far less labor and the path to success is simpler

Most common answer – “I want to be rich”

“ Rich” is also a loaded term

Is someone drawing a $500k salary in a corporate job rich?

We’re really speaking about financial independence, i.e. your business is an investment property, e.g.

Commodities & stocks

Real estate

To achieve a comparable level of ROI, you’d have to invest considerably more up front capital, but they require far less labor and the path to success is simpler

Question #3 – How rich do you really want to be? Consider the potential ROI on various investments: Stocks – perhaps hundreds of thousands of dollars Real estate – perhaps millions of dollars Tech startup – perhaps tens of millions of dollars or much, much higher Honestly – what is the net worth you want to have? Examples: ProjectLocker founders The Fresh Prince The size you want to achieve can help dictate the kind and shape of business you begin.

Consider the potential ROI on various investments:

Stocks – perhaps hundreds of thousands of dollars

Real estate – perhaps millions of dollars

Tech startup – perhaps tens of millions of dollars or much, much higher

Honestly – what is the net worth you want to have?

Examples:

ProjectLocker founders

The Fresh Prince

The size you want to achieve can help dictate the kind and shape of business you begin.

Question #4 – How big is your idea? Consider: Plentyoffish vs. Skype It’s not just about revenue potential: What’s the cost of doing your business? How many employees would it take to run this business at its height? This question is less about the business and more about you, the entrepreneur

Consider: Plentyoffish vs. Skype

It’s not just about revenue potential:

What’s the cost of doing your business?

How many employees would it take to run this business at its height?

This question is less about the business and more about you, the entrepreneur

Question #5 – What are your credentials? “ Who the heck are you?!?!?” For potential stakeholders, it’s all about risk limitation, NOT profit potential. When talking to investors, does your skill set or experience correspond to the business you’re hoping to build? Look horizontally, not vertically Work with Agility

“ Who the heck are you?!?!?”

For potential stakeholders, it’s all about risk limitation, NOT profit potential.

When talking to investors, does your skill set or experience correspond to the business you’re hoping to build?

Look horizontally, not vertically

Work with Agility

Question #6 – What is your skill set? Example – Servoy Does your business require the skills you possess in house to be successful? The E-Myth Do what you do best, then get help for the rest Find good teachers Equity is your only currency Outsource with care

Example – Servoy

Does your business require the skills you possess in house to be successful?

The E-Myth

Do what you do best, then get help for the rest

Find good teachers

Equity is your only currency

Outsource with care

Question #7 – Business or Process? Is this company your life’s work? What role do you want over time? Are you a serial entrepreneur? Why? How do you want this one to end? And when? What’s your plan for the lean years?

Is this company your life’s work?

What role do you want over time?

Are you a serial entrepreneur?

Why?

How do you want this one to end? And when?

What’s your plan for the lean years?

Question #8 – Are you answering a question no one is asking? For technologists who’ve invented a new app Coolness does NOT equal Demand If it’s a question you think the market SHOULD be asking… What would it take to educate them? Do you have the ability to make that happen?

For technologists who’ve invented a new app

Coolness does NOT equal Demand

If it’s a question you think the market SHOULD be asking…

What would it take to educate them?

Do you have the ability to make that happen?

Question #9 – You’ve identified a market. So what? For businesspeople who’ve identified a hole in the market Finding a niche is NOT the same thing as filling it. The “Field of Dreams” myth What’s the actual strategy for achieving market share? What do you need to carry out that strategy? How are you going to survive while carving out that market segment?

For businesspeople who’ve identified a hole in the market

Finding a niche is NOT the same thing as filling it.

The “Field of Dreams” myth

What’s the actual strategy for achieving market share?

What do you need to carry out that strategy?

How are you going to survive while carving out that market segment?

Question #10 – Is money even the point? Is your idea really a for-profit enterprise, or is it a non-profit? Do you REALLY want to work for a non-profit? Different markets, same questions

Is your idea really a for-profit enterprise, or is it a non-profit?

Do you REALLY want to work for a non-profit?

Different markets, same questions

The Point Shooting first can kill your dream before it’s born. An idea is NOT a vision. Vision gives equity value.

Shooting first can kill your dream before it’s born.

An idea is NOT a vision.

Vision gives equity value.

The Questions Why? Why take the financial risk? How rich do you want to be? How big is your idea? What are your credentials? What is your skillset? Business or process? Are you answering a question no one is asking? You’ve identified a market. So what? Is money even the point?

Why?

Why take the financial risk?

How rich do you want to be?

How big is your idea?

What are your credentials?

What is your skillset?

Business or process?

Are you answering a question no one is asking?

You’ve identified a market. So what?

Is money even the point?

“ Damon Who, again?” Damon Young Director of Sales – ProjectLocker [email_address] @dayfornight and @projectlockerhq on Twitter

Damon Young

Director of Sales – ProjectLocker

[email_address]

@dayfornight and @projectlockerhq on Twitter

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Thanks and Good Night