Startup Opportunities: Know When to Quit Your Day Job

Start strong with essential early-stage guidance from the VC perspective Startup Opportunities is the go-to guide for anyone with a great business idea. Whether it's your first business or your fifth, realistic assessment from the outset can save you a lot of time and money; why pour your heart and soul into a venture that is doomed to fail? Instead, position yourself to win from the very beginning. In this book, accomplished venture capitalists share their insight on startups and entrepreneurs: who will fail, who will succeed and why, and what you should do to give your business the very best shot at becoming a global success story. You'll learn how to evaluate your business with a critical eye, and how early customer development can be key in turning a good idea into a great opportunity. If you're serious about building a business that lasts, this book provides invaluable guidance that you really cannot miss. More than five million people will launch a business this year, and many of them will be great ideas—yet few will be around in five years, and even fewer in ten years. A great idea is not enough to build a successful business. You need to fortify your idea with the proper foundation, and a scaffolding of good planning and early action. This book shows you how. Assess your business's viability using the 10x Rule Learn when you can quit your day job—or not Take the key steps to making your business succeed Discover the opportunities worth selling everything for This expert author team has witnessed more than 30,000 pitches over two decades, and have participated in over 500 startup launches. Startup Opportunities gives you the benefit of their experience to help you start strong and stay strong.

Table of Contents:
Foreword xiii Preface xvii Trust Me, Your Idea Is Worthless 1 by Tim Ferris Chapter 1 What Is a Startup? 3 How to Use This Book 5 Who This Book Is For 5 Notes 6 Chapter 2 The Democratization of Startups 7 The Cost to Launch Is Approaching Zero 7 The World Is Flat 8 The Path Is Known 9 Access to Capital 10 Chapter 3 Opportunities 13 The Four Criteria for an Opportunity 13 What Is Opportunity Evaluation? 14 What Is the Cost of Poor Opportunity Evaluation? 16 Execution Trumps Opportunity 19 Risk, Uncertainty, and Ambiguity 21 The Issue of Bias 23 Notes 27 Chapter 4 Approaches to Opportunity Evaluation 29 Where Does Opportunity Evaluation Fit into the Overall Startup Process? 29 Overview of Business Model Generation 31 Overview of Customer Development and Lean Startup 33 Overview of the Disciplined Entrepreneur 35 A Modern Version of the Scientific Method 36 Notes 40 Chapter 5 People 43 Team 43 Working Full Time 47 Been There, Done That 47 Passion 48 Coachability 50 Ability to Attract Talent 53 Business Acumen 53 Domain Knowledge 55 Operational Experience 55 Mentors 56 Board of Directors/Advisors 57 Customers 58 Social Capital 59 Notes 60 Chapter 6 Pain 63 Compelling Unmet Need 65 Size 65 Durability and Timeliness 68 Notes 71 Chapter 7 Product 73 The 10× Rule 73 Rate of Adoption 75 Rogers’ (1976) Diffusion of Innovations Theory 75 Intellectual Property 76 Key Asset Access 77 Proof of Concept—Selling Your Product in Advance of Making It 78 Gross Margins 79 Contents ix Scalability 81 Notes 81 Chapter 8 Market 83 Market Stage 84 Product/Market Fit 87 Disruptive Innovation 90 Industry CAGR 90 Distribution Strength 91 Customer Acquisition Costs 93 Viral Marketing 93 Competition 94 The Goliath Paradox 96 Barriers to Entry 97 Government Regulations 98 Partnership Status 99 Knowing Why You Need to Raise Money 99 Notes 102 Chapter 9 Plan 105 Time to Launch 106 Plan to Scale 107 Reasonable Not Right 108 Get Out of the Building 111 Plan B 112 Notes 115 Chapter 10 Pitch 117 Short Form (Under 10 Minutes) 118 Long Form (30 Minutes) 118 Business Plan—or Not 119 Executive Summary 121 Q&A 121 Notes 124 Chapter 11 Raising Money 125 Building a Relationship with a Potential Investor 126 Who Makes the Ask? 127 Use of Proceeds 127 Raise the Least Amount of Money to Get to the Next Level 128 Ask for Money from the Right Kind of Investor 129 Raise Money When It’s Available 131 You Aren’t an Exception 132 Why Anything Other Than a Yes Is a No 134 Be Realistic about Your Valuation 136 Even Angels Have Investment Committees 137 Notes 141 Chapter 12 Pitfalls 143 Showstoppers and Red Herrings 143 Excessive Valuation 144 Taboo Businesses 145 No Skin in the Game 146 The No Asshole Rule 146 The Key Person Dependency 147 Drinking Your Own Kool-Aid 147 Notes 150 Chapter 13 Don’t Quit Your Day Job If You Aren’t 151 Passionate about the Space 151 Able to Execute the Solution 151 Certain That the Problem Is a Need (as Opposed to a Want) 151 Certain That the Problem Is Shared by a Large (and Growing) Market 151 Able to Offer a Solution That Is 10× Better Than Anything Else in the Market 152 Ready to “Burn the Ships” 152 Able to Access Potential Customers 152 Able to Spend Six Months without Personal Income 152 Able to Garner Enough People, Users, and Money to Create a Minimum Viable Product 152 Prepared to Get into the Weeds and Do the Grunt Work 152 Glossary 153 Acknowledgments 159 About the Authors 163 Index 165 Excerpt from Brad Feld’s Venture Deals, Third Edition 173

About the Author :
SEAN WISE is an expert on startups and venture capital. He hosts The Naked Entrepreneur, which airs on the Oprah Winfrey Network, and is a prolific business educator, bestselling author, and an international business speaker. He is a partner at Ryerson Futures, a seed-stage venture capital fund and technology accelerator. BRAD FELD has been an early-stage investor and entrepreneur for over twenty years. Prior to co-founding Foundry Group, he co-founded Mobius Venture Capital and Intensity Ventures, a company that helped launch and operate software companies. He's also a co-founder of Techstars.