Some of the most common reasons why entrepreneurs hesitate to start a startup include limited time, … [+]
Despite today’s resources which made it easier than ever to start a startup, building a business still requires a certain level of commitment and preparation like any other time before. Some of the most common reasons why entrepreneurs hesitate to execute include limited time, money, know-how, team or a person with complementary skills, or it may just not be a priority or good timing.
These steps will help you overcome your hesitation to start if building a startup is what you’ve been wanting to do.
1. Regret Minimization Framework
Jeff Bezos evaluates every tough decision that may have long-term consequences with a regret minimization framework. It is about asking yourself whether not taking action today will be a decision you would regret in the future.
Bezos had a stable and well-paying investment banking job when he started seriously considering quitting to start Amazon. It was when he asked himself whether at age 80 he would regret not taking the leap to start this company that he decided to move forward with it even though quitting then forfeited his annual big check bonus.
Most of us evaluate decisions from an opportunity cost perspective. While regret minimization essentially employs a top down approach, the top representing your future while the bottom end is today, opportunity cost is about asking, what else could I be doing with my resources today that can have a better return on investment?
If Bezos evaluated his decision from an opportunity cost standpoint, he would have not had concrete arguments to back his decision to start Amazon when his job and other potential investments could have certainly yielded good returns with less risk.
Keep in mind that back in the nineties, it used to cost millions of dollars to start a startup. None of today’s open source technology, cloud-based tools and worldwide remote hiring marketplaces were available.
It’s much easier to start today even if you have a Wall Street job. If those resources existed in Bezos’s employment period, I suspect he would have seriously considered starting before quitting his job to validate his idea, gain traction and minimize risk.
2. Define Your Minimum Achievable Top Goal
How do you define startup success? This is a very important question that will significantly influence your decision to start a startup. Here’s why and how.
Most entrepreneurs fail before they even take a step forward. If the goal is to build the next big company, reach a certain level of revenue or get acquired for a certain amount, it will only take one hour of research to realize how slim the chances are to reach those goals. How you define startup success is key.
When you’re only focused on your first one thousand customer or million dollars in revenue, the thought of the resources required to reach this goal is exhausting and discouraging. Most entrepreneurs think about their first one thousand customer when they don’t even have a single paying user.
Instead, start by defining your minimum achievable top goal. This doesn’t substitute your dreams of building the next influential and profitable company, it only makes it much easier and feasible to get started. How about judging your short-term success by your ability to successfully launch your product with 10 paying customers, how about hitting the one thousand dollars revenue mark, how about doubling revenue within 3 months? etc.
Startup success is the sum of small wins. Continue to set minimum achievable top goals and focus exclusively on reaching those milestones, one at a time. Before you know it, you’d be on your way to your dream goals. In the process, make sure you celebrate the small wins.
3. Keep What You Have
It’s impossible to completely deny current predictable revenue channels and only evaluate decisions from a regret minimization framework. The best way to find a balance is to find the sweet spot in which existing streams of income and habits are not affected.
Bezos had to quit his job to pursue his venture. Today, you don’t have to. You can start and make a significant progress through delegation and by working part-time. The goal from this phase is to pass the early risky days of a startup until you validate a business model and generate predictable revenue.
Once you reach a predefined level of success that justifies making bigger decisions like quitting a job, you can confidently invest more resources to reach your next minimum achievable top goal.
4. You Can Test Quickly
One of the questions entrepreneurs usually ask in evaluating a decision like starting a startup is, what if things don’t work out? Some success stories would tell you to get started because real entrepreneurs never ask such questions, they just do it. I bet Bezos asked and tried to find an answer to this question numerous times. Like all of us would, I bet he thought about plan B.
Asking this question is important but it isn’t valid as much as it used to be anymore. In fact, many companies today are encouraging their employees to start projects and startups. They will actually support you to start startups.
The point is, we live in a world where everyone is encouraged to create and innovate. It’s not an either/or situation anymore. Obviously, when you reach a certain level of success, you’d have to choose what you want to pursue. Until then, get going, get started.
Having said that, today, anyone can take ideas to market by leveraging and combining online tools that made it extremely easy and fast to launch and test products. If you’re hesitating to launch a startup, start it as a side project, use no-code tools to create and test it. You may soon realize it wasn’t the right idea, or maybe it is!
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