7 Start up Questions to ask before starting a business
Photo Credit: The DEMO Conference via Compfight cc
Peter Thiel in his book Zero to One discusses about the seven questions that every business must answer:
The Engineering Question
The most important question a company should ask in the beginning is can they actually create a breakthrough technology instead of incremental improvements. This can be clearly seen; major companies like Apple come out with breakthrough technology instead of better versions of the same product. This is the first question a start up should be asking.
The Timing Question:
Is now the right time to start your particular business? Timing is very important when starting a business. The technology should not be too advanced or new because marketing to masses is a big issue. When an energy crisis is due, and someone comes out with the alternative solution then the timing is exactly right.
The Monopoly Question:
Are you starting with a big share of a small market? This is also an important question to ask. You cannot start the next Google. The sensible thing to do is to start with a small market but you must dominate the segment. In short you must be the big fish in the small pond.
The People Question:
Do you have the right team? If you are starting a tech startup you must have nerds in your group not some savvy salesmen. It is also important that your nerds know sales. Right people can break or create a team.
The Distribution Question:
Do you have a way to not just create but deliver your product? Delivering a product is as important as creating the product. What if the product is not readily available in the market? People those who want to buy your product will also buy the alternative that is readily available.
The Durability Question:
Will your market position be defensible 10 and 20 years into the future? Start ups must be able to able to sustain for a longer time. Consider this question very carefully. Are you creating a company that can last for another 20 years without any problems?
The Secret Question:
This is the final question to ask yourself. Have you identified a unique opportunity that others don’t see? You don’t need to make spacecraft’s, but you can make a small gear that will be used in a spacecraft. Many people will not look at the obvious opportunity, but that is the sweet spot. That’s where magic happens.
Answer these start up questions before you start a business.