Sometimes I chat with people who are interested in starting a side business, or even leaving their $dayjob. That can be a really rewarding option if you’ve got the opportunity. Of course, there’s nothing wrong with not doing it! Some people simply don’t want to run a small business along with doing the value-adding work which brings in the money.
But if you’re willing to take on being your own boss, how should you evaluate if you’ve got a product that can float that business? Let’s work through a system for finding that answer.
Step one: Give yourself an hour per day over a week or two to do some research. You’ve got a blank sheet of paper and an idea, so let’s do some calculations and see if they can pencil out.
- What would it cost to pursue the idea? Do you need tools? material? People? Do you have to get certifications or build up a reputation before you can get those things? What does it cost in money and time to get to the point where you can start? What does it cost to continue operating once you start?
- How much money must you make by what time to make it worth pursuing? Do you understand your budget? Have you considered what could be reduced and what is non-negotiable? Be honest here, if your minimum bar for quality of life requires excellent espresso every day, don’t budget for a can of Medaglia d’Oro.
- Can you identify champions who will use your idea, gatekeepers who will allow it, buyers who will pay for it, and budget that exists today? This model is commonly used in business-to-business enterprise sales, but it’s not bad for considering any product transaction. Even if these roles are only different voices in a single consumer’s head, they will absolutely play out their functions. Consider your own purchase of a game: does your internal champion want the experience of playing it, does your internal gatekeeper approve (“what would my friends and family say”), and can you afford to buy it?
Step two: Assuming all of that pencil work comes out with a positive answer, you’re looking at refinements. Now it’s most interesting to consider: how much time will it take to prove or disprove that back-of-envelope estimate? Can you take a vacation from $dayjob and spend it on this idea? Hint: if that sounds terrible, you’re probably not going to like being your own boss. This part may be really tough because you’re going to need to validate your assumptions: talking to salespeople for quotes, talking to prospects, perhaps even asking your friends and relatives to invest. If you haven’t sold before, this is where you start learning, because if you can’t sell your idea to a friendly audience you’re certainly going to face some struggles with the outside world. In some software opportunities, it’s also necessary to ask: do you truly understand the technology that you intend to use? Do you need to spend part of this time learning to prototype your solution? Some people do very well in classes or seminars. Personally, I’d buy a stack of books and disconnect for a couple of weeks. Either is more weekends or PTO time from $dayjob.
Step three: If you’re now properly convinced you’ve got a product opportunity… how do you get from where you are now to where you want to be? How much money do you need to save? Are there trigger events or red flags you’re watching for? Now that you’re looking for the moment where you can commit to your new venture, you’re going to face additional stress from $dayjob, so keep an eye on mental and physical health.