21 Apr 5 Critical Must Answer Questions For Start-ups
After interacting with 5 different start-ups in the past month or so at all different levels, from an idea and no pitch to well funded and right at the MPV stage (not most valuable player, but Minimum Viable Product), I have honed it down to 5 critical questions for start-ups that they MUST get right or at least have an answer that makes sense. And, let me say that I have often been a passive person when it comes to pushing start-ups this way or that or anybody for any reason because I am also under the belief that I don’t know most things (like the mind of a 12 year old person’s market). I would say, admitting you don’t really know the answer is the first step towards finding an answer to these questions. My proclivity for passivity is starting to wane, because quite frankly if you can’t answer these 5 questions correctly, then either you need to go back and start all over again (even if you are in year 2). So I am no know-it-all, I am just going to question your status quo on what you think will be a successful service, app or product implementation but asking directly the most important questions. You decide if you’re answer is acceptable. I also, speaking with an old friend who is involved with a ton of start-ups as well said to him, “Remember to be tougher on the next start-up guy/gal, because we often let clients fail because we don’t have the inner strength to say, NO YOU ARE WRONG”, at the right time and place (which is usually right at the beginning). Now we all want to get paid as consultants, developers, lawyers, doctors, etc, but come on just to get the business keeping our mouths shut helps nobody in the end. In fact the start-up will just fail badly, and quite often we knew why in the back of our heads, we just kept our mouth shut and got the pay check.
So here are the questions to ask the next start-up you come across, as well as the retorts you need to have in certain cases, so they don’t end up on a highway with no exits where the highway just ends:
1. What is your business model or how do you make money?
2. Describe your customer (personally who they are, what they are like, where they hang out and something tangible about them)?
3. How are you planning on getting to market or getting critical mass?
4. Who are you competing with?
5. Who is in charge, is there already a problem personality on the management team and who is going to run it and who is standing behind the desk answering the phone all day.
Notice I left out one really important question, what is your product or service? Believe or not, I am now putting that below these 5 questions. It is important, but not as important as these questions. I am starting to think a product can evolve, pivot, and become something else if it has to. And a great team with the right resources in place can probably overcome any product/service question. A dumb product obviously is a problem, but once again I am not going to be able to tell you what is dumb, successful or not. I was out pitched a few months ago for our start-up social app by a group of kids with a game which blows the head off characters (huh!). They got funded and we didn’t. So maybe blowing heads off your mobile app characters is a great product. It sounds stupid, but I don’t know. I am not 12.
I am going to follow this blog article up with my thoughts on each of these questions, and how/why I think you could answer them right or wrong. There are definitely wrong answers, like Facebook and we are better and bigger (get the picture). My answer to that was Wrong, we need to collaborate not compete (especially with ginormace, my son’s new word he invented, entities), that you can not imaginably compete with directly. Collaborate not compete that is a mantra I picked up from CEO Space, and it rings true, especially with Facebook, since you can build an app within Facebook to get started and they are happy about it…