I teach entrepreneurship in the College of Engineering at Villanova University. We make the entrepreneurial learning experience as real life as possible but, at the end of each semester, the “real world” illusion ends with a final exam.
Outside of the classroom, folks ask me for advice about product design and new venture creation, so I made up a “final exam” with an answer key to give my opinion on the readiness of your idea as a new venture. Don't bother to sharpen your pencils, though. At least from my viewpoint, all of the “correct” answers are TRUE. Read on to learn why.
1. True or false, you are personally willing to work on the new venture full time. If you don’t feel comfortable enough to leave your “day job” to work on your own idea, you don’t really believe in it. To succeed, a new venture requires your full time effort. If you are unwilling, you don’t have enough faith in the concept or you don’t know enough about the concept to actually contribute to the success.
2. True or false, you can’t think of anything else you’d rather do than work on this new venture. T/F You must love your work to be truly successful. Discover what you enjoy and you will eventually come up with a viable commercial concept that you will love every moment taking to market.
3. True or false, this is the best opportunity you can imagine for your skills and interests. You don’t want to look back in time with regret and wonder if you should have taken a different path. If you are not sure of the other paths, investigate those, too. Every path has some risk but, with proper investigation, you can pick the proper path. No matter what, you’ll have the comfort of knowing you made an informed decision.
4. True or false, you are willing to ask family and friends for investment funds. If you are unwilling to offer your great new opportunity to your family and friends, you probably should not offer the opportunity to anyone. If you don’t feel comfortable having Granny invest in you, don’t ask anyone else to take that leap.
5. True or false, you want to personally guide this new venture through to a successful market acceptance. You may not be the best person to lead the effort but, at least, you should want to be that person. Your gut feeling should not be to simply license your idea, you should want to be a part of carrying it forward.
6. True or false, you are confident the product or service is technically feasible. If you are not sure if your concept will really work, build a prototype or pilot your service and evaluate the results before you and others get too deeply involved. Skip this step if your idea is a perpetual motion machine, anti-gravity belt, or free-energy gizmo and immediately go back to the drawing board for a new concept.
7. True or false, you’ve personally talked face-to-face with at least 50 potential users. You love your idea but you need to talk to potential customers, ideally strangers. The majority must love it and you must be convinced they will pay for it. Loving a product and paying for it are two different things, entirely.
8. True or false, if someone else offered the very same product or service you envision, you would be first in line to buy it. If you would not buy your own product, you are not ready to start the venture.
9. True or false, your product or service has competition but you know a lot about that the competition and the market. Proud inventors almost always say there is no competition. They are wrong. Maybe no one else has your patent but if you invent the world’s first anti-gravity belt, planes, trains and automobiles are still your competitors because the biggest “competitor” is customer complacency. If you can’t get people motivated to buy, your product you will fail. Whatever the competition, understand it and deal with it.
10. True or false, your product or service will be unique, or at least able to stand out among competitors. You may have a unique offering but a great venture doesn’t need to start with a new invention. All ventures must offer something people will buy. Starbucks didn’t invent coffee, they just made a higher quality brew in an in-store environment that enchanted customers.
11. True or false, your product or service will provide meaningful long term employment for someone other than you. You won’t find this on a balance sheet but there are few things in life more rewarding than knowing that your efforts helped people, families, live more rewarding and comfortable lives because of a job you created.
12. True or false, your new venture will be a benefit to society. I don’t believe it is enough for companies to “do no harm” or to be environmentally friendly. To pass my test, new ventures must make the world a better place. They must improve upon what was there before the company started.
A. If 11 or 12 answers were TRUE. You might not make billions in your new venture, but you are ready, and you will be doing something worthwhile for you and the rest of the world.
B. If 7 to 10 TRUE, you may actually make that billion dollars, but in the long term, you probably won’t enjoy it.
C. No C’s here. Average is just not worth doing.
D. If you had 4 to 6 TRUE. There is a possibility you will succeed but you’ll need to work a lot harder; be lucky and you probably won’t enjoy the ride.
F. If you have fewer than 4 TRUE. In my opinion, very unlikely that your new venture will succeed, you will find it unsatisfying and you’ll add nothing positive to society. Go back to brainstorming class, and this time do your homework!