Most of the people who have mentored me tell me that it’s not always the right answers that help — it’s asking the right questions.
There was a discussion a few months ago on whether being small had its advantages — agility, speed etc. My response then was that it all depends and I stick to the same opinion even today. While being small has its advantages, it has its disadvantages too — especially if you are a small technology business.
For those small companies, I created this list of questions to reflect upon. Some of the questions may have broader applicability.
1. Do you have a sound business model for today (or the near future)?
Silicon Valley is fun. When I am at Starbucks having coffee, I know that in the same room there are at least a few other people discussing new ideas, hatching business plans and crafting their visions etc.
Years ago before the smartphones were in vogue, I met an old friend and he shared how frustrated he was coming to San Jose Downtown — finding a reasonably priced parking spot was a total nightmare. That frustration made him think through a business idea which revolved around creating an online business to compare parking lots and deals on parking spots. He said lot of people like him will flock to the site.
Long story short. The idea was shot down by the end of the coffee session as there was no viable business model surrounding that idea. I am using this as an example where this entrepreneur cut his losses (this time at the idea stage) but there are probably thousands of other businesses where there is no viable business model and while the passion and dreams are great, if there is no business model to support it, it’s not worth your time.
Answering the first question with absolute honesty is key.
2. Do you have the right resources to execute on the vision?
Starting a business is the most easy part. I see people starting businesses all the time. They tell me that they have contacts that can give them the business. What they don’t realize is that not all personal contacts want to do business with them. They are happy to be your personal contacts but they won’t bet their company’s future on a startup. Also, you will run out of your personal contacts soon. So, just depending on personal contacts is not a good enough reason to start a business.
The key resource is and always will be — people.
Do you have the right team to run the business?
If not, can you afford to get the right team and what are you willing to give up to attract the right team?
The next key resource is money. Do you have enough for now and for the foreseeable future. If not, do you have visibility to get that money when you need it?
Note: When you are small, you make a few compromises (just because you can’t afford everything on a limited budget), but, when you start growing, you have an option to not compromise. Just being aware of this will help.
3. Are you willing to change?
They say change is easy as long as you are not part of it. As your business grows, there will be some changes that won’t affect you directly and there will be some that will affect you directly. What is your appetite for change?
What is the extent to which you are willing to change?
If it requires that you need to unplug yourself from the business for the good of the business, would you be willing to do it?
4. Can you influence the influencers?
When you are small (or in general for that matter) it is always a great idea to have a plan to influence the influencers.
Most people prepare and always look out to get to the decision makers when the journey can be a lot smoother by going after the influencers.
5. Can you scale?
While not having enough customers is one problem, having too many too early and not being prepared for it is another problem. Do you have a plan in place if (or, when) such a thing happens?
6. Can you think “systems”?
Systems thinking is one of my favorite topics and if you are a small business, it is even more important to understand systems thinking.
Systems thinking is a way of understanding the inter-relationships between the parts of a system and the impact each part will have on the whole system or on the other parts. When you build a business, you get plugged into an eco-system that comprises of at least:
You need to understand how each part relates to the other within the
system and should be able to quickly understand the impact of change in
one or more of the parts.
The Fifth Discipline by Peter Senge provides a great introduction to
Systems Thinking and if you are an entrepreneur or wanna be one, you got
to read it and digest it.
7. Do you have the right tools?
If everything remains same, the person or the company that has better tools will win. Tools may be something that will save you time, money, share knowledge, increase productivity or improve efficiency. Have you thought of what tools you need to have to run this business in the most optimum fashion?
What is your plan for acquiring these tools?
What is your plan to implement these tools?
How do we make sure that everyone uses the tools that are already in place?
8. Do you now how to market in the new world?
The advertisement model of yesterday is almost dead. The new world requires new ways of marketing or reaching out. Have you explored blogs, podcasts, viral marketing, word of mouth marketing etc. Your particular business may require something totally new altogether to get it going? How willing are you to experiment?
The keyword for today is findability. Clients will find you rather than you finding them.
Are you findable on the web or wherever the hungry crowd is looking for what you have to offer?
9. Are you willing to kill your darlings?
Sometimes we hang on to something good for too long. Selling ice was a good idea at some point in time. When the world changed and refrigeration started showing promise, it was time to move on even if there was a good business going. Now this example seems like an obvious one. What if one of your offerings was to sell ice when someone was developing refrigeration technology out there? Are you watching the trends and innovation outside of your world to see if there are things out there that can impact your business?
The bigger question is: When you do find that your biggest offering is losing relevance, are you willing to kill it or commodotize it and move forward?
10. Is your business GAAMA-proof?
GAMA stands for Google, Alibaba, Apple, Microsoft and Amazon. The question is “How do you know that one of these big companies come up with the same offer as yours but give it away for free?”
It is hard to get information on what all projects that these companies are working on but sometimes they give a hint. For example, it would not be a good idea to work on something that is already being showcased in Google Labs unless you are pretty sure that you have some amazing technology and
you know that your solution will be far superior than whatever Google
will eventually come up with.
On a lighter note:
When I shared this with one of my close friends, he said, “Raj clear this list. I have only one question to replace the whole list — What are you doing today that will ensure that one of the GAAMA companies will pick you against others in their next acquisition spree?”