Things to consider while starting or investing in a business / idea

Things to consider while starting or investing in a business / idea
August 31, 2018
by admin 0

One of the toughest and trickiest things is to select or shortlist a business idea, for investing your hard earned time and money.

One of the toughest and trickiest things is to select or shortlist a business idea, for investing your hard earned time and money.

3 things I suggest to look into before starting or investing into a business :

  1. Number 1 : Market / Demand :

Market matters most.” — as quoted by ace investor Marc Andreessen

The MOST crucial thing of business is market / demand. This is the most simplest and most ‘ignored’ thing by any entrepreneur. People become passionate about an idea, start or invest in business, thinking demand would get created.

The truth is any person needs to just check by talking to 10 prospective genuine customers or more depending on business model and check ‘Demand’

If market/ demand is there, a team can be made and a product can be improved.

Without market/demand, a great team and product is of no value

Number 2 : Team

The team should be comprised at least 2+ passionate people who believe in the idea. The team should be 100% full time dedicated to the business.

 

Have seen 3 types of people in this category:
1) People who are 100% full time and fully passionate. These are the ideal people.

2) People who are full time in some other business, and trying out something showcasing that its their full time passion, when its not.

3) People who are in job, working on business as a side project.

Category 1) of the people above should be the team you should invest into.

Number 3 : Product

Even a basic product solving a correct demand, with a superb team, is a great start.

Product till the point it works can be improved, if demand and team is perfect.

The only thing to check in this segment is whether the team is ready to ‘Pivot’ when customer feedback comes again.

Again a commonsensical thing which is ignored often is founders get too obsessed by ‘their’ vision of product and not one that is ‘customer needed’. What happens is lot of crucial time gets spent into selling what the founders think is the need while the ‘actual need’ is different.

Being flexible with the product roadmap, only driven by customer feedback is one factor that needs to be checked.

That’s it, I feel — Market, Team and Product are 3 crucial things needed for the investment decision to be made. Of course, there are other details like integrity and accounting due diligence but these 3 are foundational I feel.

Do you think any other foundational points should be considered ?

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