It’s that time of year again—the season of people quitting their jobs soon to start a company. I don’t know whether it’s New Years resolutions or end of year bonuses, but I feel like there’s a bit of a peak in people wrapping up previous things looking to start something new.
If you’re going that route—here are a couple of things I would suggest:
Have at least six months of personal expenses in the bank—and that’s only if you know you can at least get some angel capital based around your connections to investors, friends, family, etc. It should take you at least that long from having an idea before the idea is fully vetted in order for it to be worth investing in. Sometimes it’s shorter, but you always want to be conservative in this case.
Understand where similar companies have struggled and tackle that part first. If enterprise sales is the hard part of what you’re doing, figure out how you can de-risk that first—maybe by trying to pitch some vaporware to buyers or perhaps getting them to pay you to build it on a consulting basis. Think about what investors are going to ask to see that you’ve done when you pitch, and how early you can pull proof of being able to do that into the present.
Build a following around what you’re doing. Whatever you’re working on, it’s easier to do if you’re a leader in that space—so for the next six months, how can you visibly be a leader? Write a newsletter. Host events. Start a podcast. Build up the parade of people who will get behind you—because it will be easier to find customers, investors and hires as an insider than as someone trying to break in.
Get out of the house. Too often, “working on an idea” means alone at your computer. Talking directly to customers and the people most familiar with a problem firsthand, because they worked at or started something similar, should be your first priority.
Be deliberate in terms of what you want to get out of investors. Investors are better for pointing you in the direction of people in their network with expertise and letting you know how they think about your pitch—but not necessarily about the quality of the idea. Too often, an entrepreneur asks me what I think of something, when what I really want to know is what they think. You shouldn’t have to ask me if an idea is good—it’s your responsibility to know that it is, because you’re taking other people’s money to risk on it.
That being said, there is a lot of variability in terms of how an idea can be presented—whether it is well understood, etc. I’m working on two things that should help founders get early feedback:
First, I’m continuing my "Fix Your Pitch” series—where founders can get their idea workshopped in exchange for a charity donation. This way, founders who are far too early, or perhaps not getting the investor uptake they’re hoping for, can just skip to the front of the line while contributing to some good causes. I’m raising for Code Nation, the Brooklyn Bridge Park Boathouse, the Challenged Athletes Foundation and the Red Hook Initiative.
Second, I’m working on a new stealth project that enables founders to get feedback from investors in a fast and easy way. If you’re interested in testing out a way to understand if the investor market is keen on your idea, fill out this form to get in on the early beta:Name * Name First Name Last Name Email Address * Thank you!