I took a quiz from Bnet.com and the questions are simple but spot-on. They do require some thinking before you tick in the answers. Planning to start a business in the real world helps to answer those questions because 1) they would provide a good yardstick to what you have planned to do 2) compare it to what other ‘expert’ business people would have done. Hint: am I doing business now? 🙂
These are the questions. The answer I keyed in are in bold:
For 12 years you’ve had a well-paid, stable job as an engineer at a major computer manufacturer. Of late, you’ve become much more interested in an idea you’ve been working on in your own time: A wearable computer device that you believe has huge potential for changing the way people interact with their software applications. But when you try to sell your company on the idea, it goes nowhere. You’ve always wanted to be an entrepreneur and fortunately you have all of the technical skills to create the product effectively and efficiently. You decide it’s now or never.
1. As you start developing the idea, what do you think is your best next step?
Talk with people you know who will support you in making it become a reality.
Research related industries so that you can get a better idea of where the market is heading.
Figure out a rough but realistic business plan so that you know up front how much of an investment you’ll need.
2. How will you decide who you’re going to market your product to?
Focus on the customers that you have through existing relationships.
Forecast the customer segments that are likely to be most valuable and focus on them.
You’re not worried about a marketing strategy yet – you need to build the thing first!
3. You know how you want to build your device. How will you measure the progress of your product development?
Customers’ feedback and how much their ideas reshape your own.
Against the original vision you created for the product.
In terms of the number of features you can include while still staying on-budget and on-time.
4. As you start to build your product, you discover another, better-funded company is working on technology that would be very complementary to your own — actually, it would make your idea a killer product. How do you respond?
Pitch the company on a partnership to create a product jointly.
Redirect your original idea — that company may not be a direct competitor now, but chances are they will be soon enough.
Stick to your plan. You’re not ready to share what you’ve developed so far and it may not be in your best interest.
5. As you proceed, how will you approach making investments to move the opportunity forward?
Determine what you can afford to lose, and minimize the money you need for each step in the process.
Determine the amount of capital your plan requires and raise the money to make it happen.
Estimate the return on each investment, and prioritize the higher return investments.
Results: You Think Like an Amateur Entrepreneur
Your answers suggest you’re much more likely to approach a new venture the way an MBA might: research, write a business plan, raise capital, then launch. The problem is, this method isn’t always the best way to start a company when you’re dealing with so many unknown variables. You don’t know who your competitors are, how much money you’ll need, or even whether your idea is a good one yet.
Here’s how an expert entrepreneur would have navigated the situation:
- 1. Talk with people you know who will support you in making it become a reality.
- 2. Focus on the customers that you have through existing relationships.
- 3. Customers’ feedback and how much their ideas reshape your own.
- 4. Pitch the company on a partnership to create a product jointly.
- 5. Determine what you can afford to lose, and minimize the money you need for each step in the process.
Good news: I have got 2 similar answers out of 5. They say I think like MBA trained person, where in fact I haven’t done any MBA. Fooh. What a relief! At least I know I don’t have to do it now!
Bad news: Is this conclusive? So am I doomed to fail? I don’t think so. The MBA people first of all are not businesspersons. Do they know the first thing about entrepreneurship? All they have got are sets of data and surveys! Sound like sourpuss now, am I?