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Series of tips from the trenches
I've been an entrepreneur since 1998. I've been a retired entrepreneur fighting my addiction to new ventures since 2008. You would think I have more than 10 tips to share with you! We'll start with 10 and see where it takes us. I am counting on you, the readers, to share your tips so we can build out a library of Tips from the Trenches.
Today's Kick-off Tip:
Tip#1: Does it Hurt Enough People Badly?
We've all heard "Painkiller vs Vitamin" thrown at us by investors and we all get the high level concept. I don't know too many entrepreneurs who stake their reputation and livelihood on pursuing "vitamin" projects. Yet, when a business fails, one of the top reasons acknowledged is that the "pain" wasn't deep enough. Or there just weren't that many people with the pain. Or they didn't want to pay enough to eliminate it. Or worst yet, the solution wasn't the right one.
What does this mean for an entrepreneur?
1. Once you have convinced yourself of the "pain" you are solving, build a list of alternatives both current and potential that can solve that pain. Be honest about how well this "pain" goes away through alternatives. Is there really a need for a solution to eliminate this pain?
2. Talk to at least 10 people suffering from that pain to validate it. They can't be family members, neighbors, spouses. Try cold calling and see the response you get from people who don't know you. You'll be amazed how many people will talk to you when the pain is real. I signed up The Venetian for a pilot for one of my ventures on a cold call. Their pain was that intense. Ask them about alternatives and pitch your solution.
3. Most importantly, ask the tough question - Will you pay to solve this pain? There are a lot of people who suffer but won't write you a check to make it go away. If they don't pay, you don't have a business. Try to quantify how much they will pay to eliminate the pain.
4. Finally, quantify the patient base - how many people are suffering from this intense pain? How much could they pay, at the best and worst case scenario? Is that enough to build a business? Is it easy to find and reach these patients?
My parting tip - be honest when you do this assessment. If you get this wrong, the rest doesn't matter.
Tomorrow's TIP #2: KISS
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Joined Vator onReena Jadhav is a 4 time entrepreneur (Done.com, Conduit, JobFlash, Riiwards), now working on HealerPedia.com, start-up Advisor, and Investor with Valley incubators. Harvard MBA, Summa Cum Laude Wharton Business School.