technology

How Do I Start a Business In Technology if I’m Not an Engineer?

During a coaching session earlier this week, a typical chicken and egg situation came up…startups always seem to come back to chicken and egg situation right?
 
In this case my coaching student is driving forward with a technology startup but, like many entrepreneurs, is not an engineer herself. Together we’ll go out and find the right investors for her opportunity but here’s the challenge – how does she convince investors to invest when she needs the money before she can build the technology solution?
 
That’s the chicken and egg problem of most entrepreneurs – how do you get your concept and company to the stage where it can be funded, without having any money?
 
Turning the problem over in my mind since the coaching session – this problem really does come right back to the core of what it is to be an entrepreneur passionate about your startup and vision of what it can be.
 
The short answer as an entrepreneur, you need to hustle…that doesn’t mean fast talk, exaggerate or BS…no, it means you are in the pursuit of reducing the investors risk. Investor Risk is one of core elements you need to focus on as an entrepreneur.
 
If you can prove the upside and also prove you have done everything possible to reduce risk, you’ll stand a much better chance of getting an investor to say ‘Yes’ to you and your early stage business.
 
Lets break investor startup risk down…
 
Here are a few common investors concerns that you need to be aware of and address in what you do with your business and how you communicate with investors.
 
Concerns:
  1. Is there really a market for this? Are customers prepared to pull their wallets out for this?
  2. Are their enough customers passionate about this need/problem/ want to make this a $100M business?
  3. Do I trust this entrepreneur to get it done – no matter what obstacles, challenges or problems get thrown at them?
  4. Can this entrepreneur recruit a top flight team?
  5. Is the team strong enough to get this done?
  6. Can they deliver a solution that customers / consumers want?
  7. Can they create a beta product and test the market without a significant sunk cost?
  8. Is this a growing market with a significant upside?
  9. Do they need to create the market or does it already exist and the market knows it needs a solution?

When you read through these concerns – notice that most of these questions, for most early stage businesses, can be answered without actually building the product.  But even though that’s the case, gone are the days when you can go into an investor, drop a business plan in their laps, and if its in an exciting space, walk out with a check.

No, as an entrepreneur, you need to be aware of these and more potential concerns and do everything you can to mitigate them – it goes way beyond a business plan or a pitch deck.

…It means engaging with would be customers, surveying them, getting them to sit down and talk to you about what they really want…

…It means starting to pull the team together, convincing them to sign up when the funds come through and being prepared to come to meetings with you…

…Its means getting creative about how you can test your initial concept – forget the bells and whistles…no even one bell – just focus on the #1 need and see if you can provide a rough solution to some beta customers. 

…It means looking at short term solutions for the beta – elance? Freelancer? College buddies? Local College?

Like I said in my short answer – it means hustle, because I truly believe most investors will not back a business plan, a hot market and a smile – unless that smile has been there and done it before and even then, if you’ve done it before – you’ll have already got into the shorts of your would-be-customers, have figured out a way to test your concept and got some beta customers ready to go…

The truth is engineering talent for startups are in HUGE demand – so whether you have the investors yet or not, you’ll still need to hustle and be creative to get your first beta out there. But make not mistake – this is a huge part of the fun…pulling the jigsaw together and creating a real, living, breathing and thriving business out of what was once just a crazy idea in your head. Pursing your passions is the greatest!

Before signing off – if you’d like to chat about getting some support and being coached to realize your business vision – drop by the contact us page and send me an email. Lets jump on a Google Hangout and see if there’s a fit.

Look forward to hearing from you.

Andrew

PS – here are a few good and related articles. Enjoy

 

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Comments

  • Oscar
    February 11, 2014

    Maten one ir the clearest articles about entrepeneurs i hace ver red

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