Thursday, February 4, 2016

The Journey to Starting a Company - The 5 Common Roadblocks

How Did You Do It?

I’ve known many people who look at startups from the outside and say, “Wow, I wish I could be the founder of a company like Uber, Facebook, or some other young, hip, successful, and profitable startup.” The next words I heard from those same people are usually about the mental obstacles they believe they will face, such as “I wouldn’t know were to begin,” or “I am not a developer,” or “I don’t have the money to start a company that big.” Unfortunately, I believe too many great ideas meet their doom when faced with seemingly insurmountable (mental) obstacles. Bottom line: Like any other venture, the world of startups presents unique challenges that can be overcome with the right motivation, passion, and thoughtful planning.

Those things I mentioned in the first paragraph? Yeah, that was me. I’m the guy who came up with hundreds of ideas, ran them past my friends, received encouragement, and then mentally defeated myself because the obstacles seemed too big to overcome. I tried to start my own company several times but never made it past the business plan. Now that I have successfully embarked on my first startup venture, I want to help you avoid my past roadblocks. In this article, I will identify and break down some of the barriers I have encountered over the past ten years. By sharing my experiences, I hope that I will inspire you, the potential entrepreneur, to push through the startup obstacle course and create your own innovative companies.

I would like to point out that I am a normal guy with a passion for entrepreneurship and a huge love for the world of business. Over the last six months, I gained a large amount of knowledge that opened my eyes to the world of startups and how an ordinary person like me could start their own company. Today, I am excited to share that with lots of hard work and sustained effort, I founded a cyber security startup called Covrt Security.

During the last few months, I spoke with many people—entrepreneurs, friends, family, and other professionals—who all asked me the same types of questions:

  • How did you come up with your idea?
  • How did you get a venture capitalist to listen to you?
  • How did you develop your software if you are not a developer?

The list goes on, but the point is singular: As I answered these questions, I realized that not so long ago these same questions—and my inability to answer them—were the roadblocks that kept me from achieving success.

The Five Common Roadblocks

Let’s look at the top five roadblocks that most first-time entrepreneurs encounter in their initial planning:
  • How to come up with a GREAT idea,
  • How to find the time to build a startup,
  • How to stay motivated,
  • How to find a mentor, and
  • How to get funding for a product or idea.

It doesn’t matter if you are starting a small local landscaping company or looking to be the next overnight billion-dollar sensation (known as a unicorn startup), the roadblocks are the same and present unique challenges. Yes, these roadblocks can be a bear,  but with careful planning and due diligence, you can knock down these roadblocks one by one, and with each step, get closer to achieving your entrepreneurial dreams. It all starts with the first—and largest—roadblock.

How to Come Up with a GREAT Idea

There are millions of good ideas in the world. But in a world that adds new startups at a rapid pace, the only ideas that are going to be worth starting are GREAT ideas. What makes an idea great? Simple: a GREAT idea solves a true customer pain point. A pain point is a problem, that a consumer (you and me) believes is real—or maybe we just perceive it to be real. Usually it’s such an annoyance that a consumer is willing to pay to make the pain point to go away. And that’s where your GREAT idea fits in.

These great ideas then, are the solutions that come in a variety of shapes and sizes. A great idea could be as simple as a new way of doing something that makes it better or easier for a consumer. For example, Uber provides an alternate method for a person to call a cab. Instead of having to go out on to a New York City sidewalk and hold your hand up, you just need to tap a few buttons on your phone and the cab comes right to you. The founder of Uber completely changed the way the world thinks about calling a cab, and all he did was stop us from raising our arm.

A great exercise for someone who is looking for a great idea is to carry a notebook (or use the notes function on your smartphone) and write down all of the pain points you observe for a two-week period. The pain points might be experienced directly from your life or indirectly witnessed from the people around you. Then, at the end of the two weeks, take your entire list and try to thinking of five different solutions that could fix the pain points you wrote down. By the end of the exercise, you will have a large list of ideas that could potentially be a worthwhile startup. Next, do some initial research. Look for the ideas that have either no current competition in the market or have a fast growing market need.

Once you have this list, start talking to people about your idea for your company. Ask them if they would be willing to pay for your idea, and if so, how much? This simple exercise of discovering an outsider’s perspective will help you further break down your list of great ideas.

By continuously breaking down this list, you will narrow your list to four or five great ideas. The next step is to conduct serious research on the market you are looking to enter and make yourself an expert in that space. If your initial two-week pain point observation period didn’t turn up anything you can work with, do it again. It takes time, patience, and persistence to garner success.

At this point, it would be beneficial to begin looking for a mentor or professional in the industry who could also help give you a boost in the right direction. (We will learn about how to find a mentor later in this post.)

How to Find the Time to Build a Startup

People who know me know that I am constantly working. I work two jobs, serve as a volunteer firefighter, recently earned my MBA, and I find time to hang out with friends and family regularly. My full schedule often becomes a topic of conversation when people ask me, “How do you find the time to build a company?” The answer is simple…long hours.

Every day I wake up around 6:00 in the morning and I spend most days on my feet at work and performing all my activities until I go to bed around 10:00 at night. I make sure that I get to work no later than 7:30, and when I leave my first job around 5:00 I then end up going home and working on my startup until I go to bed. Did I mention I also walk the dog, cook and eat dinner, and spend time with my super-understanding girlfriend too?

Startups do not experience success when you work on them for only a few hours each week. The short of the matter is that building a startup is demanding and you must be willing to work long hours to make your dream a reality. In truth, startups are built fast, and to succeed you must be willing and able to work long extra hours to try and beat the clock before someone else steals your idea from under your feet.

Some people might call me a workaholic because working long hours does not faze me. That might be true, but I believe the greater truth is that I know my hard work now will yield to a better quality of life and living in the future. I personally think that a true entrepreneur has the same desire tugging at their being: the love of building successful companies.

You will find that once you start building something you are truly passionate about, you will no longer feel like you are working. Rather, you will be creating something amazing that you cannot wait to share with the world.

How to Stay Motivated

Nothing is more aggravating than encountering (lots of) roadblocks while starting your own company. Several times in the past ten years, I tried to start a company that I thought would be a great idea. At some point in the planning process, I encountered a roadblock that ended the dream altogether.

As you plan, expect people to scrutinize you and your ideas. They will ask you pointed and free analysis, even if it’s not always constructive. Ultimately, it can help you improve your bottom line and the solvency of your GREAT idea and future company.
challenging questions like “What makes you think you can be a founder?” or “That’s a waste of time.” These negative connotations will feel like a stab in the back especially when you are working on an idea that you truly feel passionate about. But they don’t have to be. Instead, understand that every challenging question helps you strengthen your answers, fundamental assumptions, and helps identify gaps in your plan. It’s

To stay motivated, surround yourself with people who are in your field or join entrepreneurial-focused groups in your local area. Startup organizations in nearly every major city schedule events and meet-and-greets you can attend. By getting to know the surrounding startup ecosystem you are looking to be a part of, you instantly surround yourself with a support system that is there to assist you. Many of these types of events can also help you find mentors, an audience to test your idea, and provide opportunities for networking other people who have started their own companies and been in your shoes.

The startup ecosystem in your local area is like a foundation of supporters who always have an open door to assist you when needed. These entrepreneurial minded folks, even if you have a bad idea, will help you understand why it could be a less successful idea (from personal past experience) or help you redefine your idea into something better than you originally conceived.

How to Find a Mentor

The key to a successful startup is to know anything and everything about the industry you are trying to enter. And who would know that better than an expert who has already walked through the same process that you are starting?

Mentors can be found everywhere. Everyone wants to be part of a new startup community, but when you are choosing a mentor, make sure that you are selective about who you would like to be working with. For example, if you are planning on creating a new iPhone application in the mobile gaming sector, a mentor who has past experience in creating a business around shoe manufacturing is probably not going to be as helpful as someone who has started a company around video game development. By doing this, you are placing a high value on every moment, conversation, and interaction with your mentor. The advice a mentor offers is a (free) investment into what you are trying to build. Your mentor will understand and appreciate this.

Mentors with experience in entrepreneurship welcome the chance assist new entrepreneurs. I have never met an entrepreneur who has declined to assist me with a question. Instead, they have all welcomed my questions with energy, positivity, and a willingness to share. If they did not know the answer, they typically offered up a networking connection that opened the door to conversations with other professionals in the industry.

How to Get Funding for a Product or Idea

The biggest question that I get asked from people who hear that I am starting my own company is, “How are you going to pay to develop your product?” The question they ask next is usually, “How did you get a venture capitalist to listen to your pitch?”

True or False?

To get your idea in front of a venture capitalist is the ideal way for you to get funding for your idea.

False! Getting your idea in front of a venture capitalist is only one of the ways for you to earn money for your startup! Over the past decade, new methods like crowd funding and startup competitions have become popular and viable means for startups, regardless of an entrepreneur’s proximity to city-based startup ecosystems. (See what happened? Somebody identified a pain point and innovated a way to gain alternate investment methods for startups.)

When you attend startup or entrepreneurial events in your area, tell everyone about your idea and update them on the status of your company and what you are looking for. Usually, the right conversation will spark something in a power player at the event and you will peak their interest. I have found that they are willingly share their network with you and help you connect with the right people to talk to about your business and its financials.

Venture Capitalists

Startup or entrepreneurial events can also introduce you to or point you in the direction of venture capitalists that focus on your area of expertise. By talking with a venture capitalist that focuses in the market you are trying to enter, it gives you two key pieces of information about your idea.
·      First, a venture capitalist is able to tell you right away if you have a good idea for the market you are trying to enter.
·      Second, they will be able to tell you if you have a great idea and they are interested in learning more, or a way that you could possibly improve your idea.

That being said, you have to be able to pitch your idea to an entrepreneur in under one minute. These VC’s hear sometimes 30 pitches a day, and you have to give them a reason that you stand out above the rest. My recommendation, your pitch should be able to wow someone in the first 30 seconds.

Startup Competitions

As startup ecosystems grow, startup competitions and different startup events become more available for budding entrepreneurs. These types of events are perfect for gaining startup knowledge insight as to who the ecosystem power players are. Power players can be current founders, local business leaders, and of course, venture capitalists.  In addition, these events are great for market and product validation of your idea.

I recommend attending as many of these events as you can to, well, start…and learn. Not only will they keep feeding your entrepreneurial spirit, they will help you to build the support system that you will need to keep you from getting knocked down.

Another way for you to gain money for your startup is by entering startup competitions. These competitions can be found all over the country, and many times right in your back yard. These competitions typically come with a cash prize for the winner. If you have a great idea for a product that shows promise, along with a stellar live presentation, then these competitions can typically throw first place winnings of $5,000 to $100,000 and beyond! Regardless of where you place in the competition, every competition is a learning experience that should be heavily valued. And of course, venture capitalists heavily attend these types of events looking for new, fresh startups to invest in. You may not win the competition, but your idea may catch their eyes.

Crowdfunding

While not for everyone or every idea, Crowdfunding sites such as Kickstarter or Patreon allow you to sell your idea to the masses and gain financial support from the largest (and toughest) group of potential backers possible—anyone connected to the Internet. What you need is a solid plan and a marketing design that clearly identified the pain point you are trying to address and how your product, when available, will make everyone’s life easier. It’s important not to launch a crowdfunding campaign until you have this part figured out. People won’t support a half-baked idea and you don’t want to inadvertently generate a poor public perception of your idea.  In reality, Crowdfunding can be seen as a great marketing tool with a financial bonus at the end!

Final Words…

There are millions of people who wish to be their own boss and start their own company, but there are only a few who are truly entrepreneurs. An entrepreneur is someone who has the ability to get shut down multiple times in a row, only to get up the next morning and try to think of another GREAT idea. There are millions of good ideas out there, but there are only a few GREAT ideas.

In closing, I encourage you, potential entrepreneur, to keep sifting through those good ideas and seize the GREAT idea when it pops up.


Is it worth the struggle? Yes, absolutely.  Why should you believe me? Because after ten years of sifting through good ideas, a few GREAT ideas, and an intense obstacle course of roadblocks, I discovered my GREAT idea and now it’s becoming a reality.

6 comments:

  1. Tech in Asia
    https://www.techinasia.com
    Tech in Asia is a media, events, and jobs platform on a mission to build and serve Asia’s tech and startup community. On the website users can keep abreast of the latest news, share your own thoughts, and find talent or jobs best suited to their needs.

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  2. Tech in Asia
    https://www.techinasia.com
    Tech in Asia is a media, events, and jobs platform on a mission to build and serve Asia’s tech and startup community. On the website users can keep abreast of the latest news, share your own thoughts, and find talent or jobs best suited to their needs.

    ReplyDelete
  3. Tech in Asia
    https://www.techinasia.com
    Tech in Asia is a media, events, and jobs platform on a mission to build and serve Asia’s tech and startup community. On the website users can keep abreast of the latest news, share your own thoughts, and find talent or jobs best suited to their needs.

    ReplyDelete
  4. Tech in Asia
    https://www.techinasia.com
    Tech in Asia is a media, events, and jobs platform on a mission to build and serve Asia’s tech and startup community. On the website users can keep abreast of the latest news, share your own thoughts, and find talent or jobs best suited to their needs.

    ReplyDelete
  5. Tech in Asia
    https://www.techinasia.com
    Tech in Asia is a media, events, and jobs platform on a mission to build and serve Asia’s tech and startup community. On the website users can keep abreast of the latest news, share your own thoughts, and find talent or jobs best suited to their needs.

    ReplyDelete
  6. Tech in Asia
    https://www.techinasia.com
    Tech in Asia is a media, events, and jobs platform on a mission to build and serve Asia’s tech and startup community. On the website users can keep abreast of the latest news, share your own thoughts, and find talent or jobs best suited to their needs.

    ReplyDelete