KNOW YOUR FINANCIAL KEYS
Intimately tied to your core concept is a set of financial keys that reflect the trajectory and health of your venture. Most founders don’t possess financial modeling skills, and detailed …
DEVELOP YOUR CORE CONCEPT
Good startup math rests on a business concept that makes sense for you and for the marketplace. Keeping it simple, you can think of your core concept as having three …
Constructing a Compelling Math Story
Your math story is the driving narrative of your business, defining what you are attempting to build and how, with numbers attached. A good math story cuts through the window …
THREE VENTURES, THREE APPROACHES
In thinking about your approach to planning, consider the maturity of your venture. How fully developed is your product or service? Do you understand customer receptivity and demand? Do you …
MATCH YOUR PLANNING TO YOUR PHASE
Too often, planning approaches for mature organizations are unnecessarily applied to seed-stage businesses. The right approach for you will vary depending on where you are in your new venture life …
Planning Is Clear Thinking
A common question among aspiring founders is whether to develop a full-blown business plan and, if so, what to include in it. According to most business schools and books on …
Your Math Story
Charting a Path to Breakeven and Beyond "Numbers rule the Universe." —Pythagoras Remember the tale of Icarus and his passionate flight toward the sun? Although the story ended in tragedy, …
Antidote to the Passion Trap: Give Your Idea a Market Scrub
The best way to protect yourself from attachment to a nonviable business idea is to scrutinize your concept through a market lens. The five sets of questions below will force …
EXECUTE ON YOUR MARKET OPPORTUNITY
In his 1987 book, Moments of Truth, Jan Carlzon tells the story of how he reinvigorated his ailing company, the Swedish Air Service (SAS), by focusing his 20,000 employees on …
KNOW YOUR MARKET
Anyone who has played Pin the Tail on the Donkey can understand the challenge of launching a new product or service. You’re blindfolded and reaching forward, hopefully closing in on …
Developing a Strong Market Orientation
Of all the factors that can help you get your business off the ground, the most important will be the presence of a ready market, which can be defined as …
The Pull of the Market
Attach to Your Customer, Not to Your Idea "The greatest danger for a new venture is to 'know better' than the customer what the product or service should be." —Peter …
DIRECT YOUR PASSION
Finally, aim your passion in ways that will reduce the danger of falling into the passion trap and increase your overall odds of venture success. For example, cultivate: ■ Passion …
STRENGTHEN YOUR PASSION
Here are four strategies for fueling a healthy, sustainable enthusiasm for your new venture: 1. Clear your way. Free up energy by relinquishing old obligations or time-wasters that no longer …
CONNECT YOUR PASSION
Business is personal. We all want to personally connect to the work we do. Many of our strongest drives—to create, to achieve, to relate, to make a difference—play out in …
UNDERSTAND YOUR PASSION
When I was nine or ten years old, I remember telling my dad that I had butterflies in my stomach before a little league football game. “That’s okay,” he said. …
Purifying Your Entrepreneurial Passion
As I mentioned earlier in this chapter, avoiding the passion trap doesn’t require that you suppress your enthusiasm or commitment. Instead, the solution lies in elevating and focusing your positive …
POSITION YOURSELF FOR HIGH PERFORMANCE
Regardless of why you’re starting a business and what skills and resources you bring, your performance as a founder will fluctuate from hour-to-hour and day-to-day. This is the nature of …
LEVERAGE YOUR RELATIONSHIPS AND RESOURCES
Like every founder, you will bring a unique set of external connections and assets to your startup equation. Understanding how these match up with your startup goals and needs is …
MAP YOUR SKILLS AND EXPERIENCE
Despite a few well-known examples of college dropouts who launch world-changing startups, entrepreneurial research supports the notion that the right kind of prior business experience, effectively applied, greatly enhances a …
UNDERSTAND YOUR ENTREPRENEURIAL PERSONALITY
I have found that the founder’s unique set of personal characteristics, More specifically, the degree of fit between the founder’s personality and the needs of the new venture as it …
CLARIFY YOUR REASONS AND YOUR GOALS
Whenever I meet someone who wants to start a business, the first question on my mind is: Why? Why are you doing this? Why now? What are your reasons, and …
The Fundamentals of Founder Readiness
It’s hard to imagine a founder better prepared to launch his or her chosen startup than J. C. Faulkner. On the personal side, J. C.’s capacity for empathy, his natural …
Founder Readiness
How to Prepare for the Entrepreneurial Journey "It's not the will to win, but the will to prepare to win, that makes the difference." —Paul "Bear" Bryant, legendary college football …
Moving Forward: Six Principles for Making the Most of Entrepreneurial Passion
As you continue on your startup journey, the core patterns and cognitive biases described in this chapter will continue to play a role. You cannot completely erase them, nor would …
Early Warning Signs: Are You in Danger of Being Trapped?
It’s hard to differentiate between healthy optimism and blind optimism. Below is a list of early warning signs to help you evaluate whether you are in danger of undercutting your …
Icarus Qualities: Who Is Most Vulnerable to the Passion Trap?
The story of Icarus flying too high for his own good serves as a stark reminder that certain human qualities can become liabilities if taken to extremes. Optimism, for example, …
THE ROLE OF COGNITIVE BIASES
If there’s a single psychological concept that every aspiring entrepreneur should understand, it’s the phenomenon of cognitive biases. Cognitive biases are mental and emotional filters that help us make sense …
THE FOUR INTERDEPENDENT STEPS OF THE CORE PATTERN
The core passion-trap pattern consists of four interdependent steps, each leading to the next (as shown in Figure 2-1): 1. Attachment to an Idea. Whether through an incremental process or …
The Core Pattern: How the Passion Trap Works
It’s clear that the above negative consequences can drag down otherwise talented founding teams and significantly reduce a startup’s probability of success. But, specifically, how does entrepreneurial passion play a …
AN EVAPORATING RUNWAY
Until the new business concept has proven itself and is generating a sustainable level of revenue, startup founders must deal with a pile of ever dwindling resources. The first five …
THE REALITY DISTORTION FIELD
Andy Hertzfeld, a member of the first Macintosh computer software development team in the early 1980s, credits fellow team member Bud Tribble with coining the phrase “reality distortion field” to …
AN UNFORGIVING STRATEGY
There has never been, nor will there ever be, a shortage of new business ideas or aspiring founders willing to commit time, sweat, and tears to bring them to life. …
ROSE-COLORED PLANNING (OR NONE AT ALL)
Passion-trapped entrepreneurs are unrealistically optimistic. Secure in their belief that they’ve discovered a can’t-miss idea, they view the startup journey through rose-colored glasses. Best-case assumptions drive plans and projections. Projected …
MISSING THE MARKET
Most startups suffer from anemic early sales, far below projections. In too many cases, the uncomfortable truth is that expected market demand for a new product or service, demand that …
