How Do You Want to Spend Your Next 4 Years of Your Life?

As our Lean LaunchPad for Life Sciences class winds down, a good number of the 26 teams are trying to figure out whether they should go forward to turn their class project into a business.

Given that we’ve been emphasizing Evidence-based entrepreneurship and the Investment Readiness Level, I guess I shouldn’t have been surprised when someone asked, “After we figure all this data out, should we pursue our idea based on the numbers?”

Ouch.

I pointed out that the “data” you gather in 10 weeks (talking to 100+ customers, partners, payers, etc.,) are not the first thing you should look at. There are three more important things you should worry about.

(see 0:30 in the video below)

turning point

——–

1. Do you want to spend the next 3 or 4 years of your life doing this?

(See 1:03 in the video below)

Now that you’ve gotten to know your potential channel and customers, regardless of how much money you’re going to make, will you enjoy working with these customers for the next 3 or 4 years?

One of the largest mistakes in my career was getting this wrong. I used to be in startups where I was dealing with engineers designing our microprocessors or selling supercomputers to research scientists solving really interesting technical problems. But in my next to last company, I got into the video game business.

My customers were 14-year old boys. (see 1:30 in the video)  I hated them. It was a lifelong lesson that taught me to never start a business where you hate your customers. It never goes well. You don’t want to talk to them. You don’t want to do Customer Development with them. You just want them to go away.  And in my case they did – they didn’t buy anything.

So you and your team need to feel comfortable being in this business with these customers.

2. Is this a scalable business?  And if not, are you Ok with something small?

(See 2:03 in the video below)

Is it a lifestyle business while you’re keeping your other job?  Is it a small business that hits $4 million in revenue in four years and $8 million in ten years?  Or is it something that can grow to a size that will result in an acquisition or some liquidity event?

You need to decide what your personal goal is and how it matches what you think this business can grow into.  And you and your cofounders need to have that discussion to make sure that all the co-founders’ interests are aligned – before you make any decision to start the company.  If one of you are happy making $500K/year and the other has visions of selling the company to Roche for a billion dollars, you have very different goals. Without clear alignment, one or both of you will be really unhappy later when you try to make decisions.

3. If I Didn’t Make Any Money After 4 Years, Did I Still Have A Great Time?

(See 4:36 in the video below)

If your company fails, would you still say you had one hell of a ride? Founders don’t do startups because they’re searching for a huge financial windfall. They do it because it’s the greatest invention they can imagine. Most of the time you will fail. So if you’re not going to have a great time with your team and learn and build something you are truly excited about – don’t do it.

If you can’t see the video above, click here

Lessons Learned

  • Do you want to spend the next 3 or 4 years of your life doing this business?
  • Is this a scalable business?  And if not, are you Ok with something small?
  • If you didn’t make any money after 4 years, did you have a great time?

Listen to the podcast here


Download the podcast here

5 Responses

  1. I can answer the first question with no hesitation. I love my target market – brilliant women entrepreneurs. Check! Have to think hard about the other lessons. Thanks

  2. The investment readiness level link says “You are not allowed to edit this item” when clicked.

  3. Here’s a great post from Steve Blank (as usual). Asking important basic questions. It’s worth viewing the video.

  4. This is a valuable, four minute video. (It doesn’t apply to everyone. Some people start businesses because they don’t have any other real alternative.)

    For the bright, well educated people in Silicon Valley this message is right on target. I’ve started four for-profit and one non-profit. The one failure was a business with great potential. It got into a cash flow crunch (I didn’t reckon how much markting would cost.) I could have wasted five more years years and pulled it out. I decided not to. I was bored. It was not fun. I didn’t respect many of the customers and I wasn’t enjoying the people I “had” to hire to make the business work. I ended up finding the best option for getting out. Thank goodness I did. The employes kept their jobs and I lost everything except the very valuable lessons learned.

    Thanks Steve, on behalf of all those starry eyed entrepreneurs. Many of whom think they can start a company, make their F U money quickly …. and then go do what they really love. Do what you love now.

    Steve Barrager
    Publisher
    Baker Street Publishing

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Follow

Get every new post delivered to your Inbox.

Join 137,451 other followers