How To Split An Atom

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So you have a “great idea” and you are just about to jump head first into a startup. VC riches and Silicon Valley dreams are dancing through your head. Before you take the plunge, you have a few hard questions that you should ask yourself.

Being able to answer these certainly won’t save your product from the Deadpool, but not being able to may be a sign that your million dollar plan may need just a little bit more thought.

Burning Questions

Can you code it with your current team?

Coders are expensive, coders are fickle, and good coders have a thousand projects on their docket. If you have a great idea but don’t know how you’ll get it coded. You better have an answer to question two.

Where are you going to get the money?

The right answer is maxing out your credit card and asking rich relatives. Unless you have some code written, you have exactly nothing. Even if you have code, unless you have a user base of about 10k people, no one in the world (except for maybe your friends and relatives) will care.

Do you have a viable business model?

Advertising is great, but you should take a look at the next question if that is the main revenue stream of your business.

Otherwise, here are some things that you should know about people on the Internet.

• Unless they can’t find it for free, they won’t pay for anything.
• If it can be pirated, it probably will be.
• You can get away with flat fees, but it will cut the adoption rate of your product in half.
• If it is cute, clever or costs under $5 you have a chance of selling it. That is, if you build your product’s brand around it.
• Mainstream adopters buy, early adopters get it for free.

Is your team structure financially sound?

Hire as few people as possible and pay them as little as you can manage. What this means is that ideally your team should be made up of friends with equity in the company and the same vision that you have.

When scaling your enterprise up, especially if you rely on advertising for income, remember that your going to be running on razor thin margins. Understand that if you’re smart, even when you have a significant audience (100k+) you’ll be running your business with a small number of people.

Unless of course you know the answer to this question.

How much VC do you need?

The right answer is none, at first.

If you don’t go on a hiring binge, you should be able to keep yourself afloat using revenue from whatever business model you have devised before you ever consider courting VCs. Being able to show real revenue, a proven model and growth potential will put you way ahead of 90% of the startups that hope and pray the Internet will find a way to bail them out.

Most of us don’t have the luxury of going this route.

Some users are necessary in order to make a decent income, and food still costs money. The realistic answer is to take the absolute minimum you need to keep running. As a startup you have a lot more sweat than credit, push yourself harder rather than trying to hire away your problems.

The worst thing you can do as an entrepreneur is to get caught up in the mystique of a “startup.” Business is, in almost all cases, based on common sense economics. If it doesn’t seem like your idea could generate income, in all likelihood it cannot.

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