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Code Show Kickoff:Code Show Kickoff:Damon YoungDamon Young

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The Pre-Startup The Pre-Startup QuestionnaireQuestionnaire

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Agenda

•About the speaker

•The startup landscape

•Questions every entrepreneur should answer

•What’s the point?

•Review

•Q&A

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“Damon Who?”

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

•Why?

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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

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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

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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

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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.

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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

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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

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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

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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?

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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?

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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?

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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

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The Point

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

•An idea is NOT a vision.

•Vision gives equity value.

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The Questions1. Why?

2. Why take the financial risk?

3. How rich do you want to be?

4. How big is your idea?

5. What are your credentials?

6. What is your skillset?

7. Business or process?

8. Are you answering a question no one is asking?

9. You’ve identified a market. So what?

10. Is money even the point?

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“Damon Who, again?”

•Damon Young

•Director of Sales – ProjectLocker

•dayoung@projectlocker.com

•@dayfornight and @projectlockerhq on Twitter

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Thanks and Good Night