The Startup Acid Test: Five Questions to Think Through Before Starting Up

So you have a great idea and have decided to create your own startup? Excellent news! Write down your idea in detail, and get ready for some bullet-proofing exercises.

Note 1: Your brain WILL try to convince you that your idea is golden.

Note 2: This exercise can be depressing. If you breeze through this, you’re ready to take off. If not, there are still ideas out there, waiting to be captured.

Question 1. Is the idea already implemented ?

OR
Have you checked … really checked .. for another implementation?

If not, now is the time. You don’t want to find out months into your startup that you’re reinventing the wheel.

2. Who is your closest competitor? How different is your idea?

OR

Would the customer care enough to come to you?

Don’t assume there’s no competition. Explore what the nearest competition is, and understand how they work.

3. How will you generate revenue?

OR

Is there more than an ad supported model here?

Ad supported websites led to repeated bubble bursts. It is possible, but you need to be able to drive large traffic before receiving any substantial returns.

4. Do you have the expertise to implement it (or do you have access to experts)?

Getting into a brand new space can seem deceptively easy at first. Speaking to people in the field already will help you gauge your readiness to enter.

5. How much will it cost? Can you bootstrap your startup? (that is, fund your startup yourself)

Venture Capital is great. But remember, it’s still a loan. Be as realistic and think long term.

Once you’ve successfully completed this exercise and things look good, consider putting together a business plan to get more into the details. Some basic business plans can be found on the SCORE website.

Don’t fret if you found something that’s already implemented. You can still consider targeting a separate market segment or making changes that customers would care about. Then, repeat this exercise.

Think something else should be on here? Share important questions to consider when starting up.

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