An entrepreneur (or a wannabe entrepreneur) typically has a list of ideas and when a million other things align, the entrepreneur has to pick one idea and give it all he/she has. Selecting one idea can be a daunting task and a lot of thinking should be involved before making the plunge. Most entrepreneurs I’ve known have always maintained a prioritized list of all potential startup ideas that came to their mind. Many of them have focused some energies on the top two or top three ideas (build prototype and see market’s/investor’s reactions, before proceeding further). As an investor looking to invest in an idea/startup, typical factors to look for are:
- compentence of the team
- size, growth potential and landscape of the market
- barriers to entry
- timing (think "riding the wave")
- and a variation of one of the above (depending on who you talk to)
If you’re reading this blog, you may find it insightfully entertaining to check out and compare the "things we are looking for" – sections on the web sites of popular venture capital firms. Some of the investing philosophies, I’ve enjoyed reading are:
- Khosla Ventures (Vinod Khosla)
- Draper Fisher Jurvetson (Tim Draper)
- Sequoia Capital (Don Valentine, Mike Moritz)
While these investment philosophies (or things that professional investors look for in a venture are the table stakes for any venture and they are non-negotiable in most cases.) I want to talk about something more fundamental that an entrepreneur should consider before making the personal decision in selecting the idea. Some thinking points that have helped me decide are:
- What are you most passionate about (and where can you add value)?
- Ask Maslow: Which need in Maslow’s hierarchy of needs is your idea addressing?
- How BIG, HAIRY and AUDACIOUS is your idea?
Each of the following three can be topics for a book and I can keep on writing on and on about each of them. I’ll share more thoughts on each of these three ideas in subsequent posts.
It is very important to know yourself, as to why you are an entrepreneur. You should be/become one to add value, to make a significant socio-economic impact, to solve a hard technical/economic problem and NOT for any other "glamor" reasons. Greats like Bill Gates, Steve Jobs, Sergey Brinn and Larry Page, etc. have been lauded by the popular press as poster-children of immense wealth, power and influence. As a teenager, that’s how I first got into entrepreneurship. It took years of successful and mostly unsuccessful entrepreneurial attempts before, I realized – why am I an entrepreneur? It is important to know that.