If George Clooney and Randy Gerber’s recent megadeal for Casamigos didn’t stop you in your business tracks it should have. It was certainly a conversation starter at many a business meeting, lunch or dinner over the past few weeks. Did you suddenly ask yourself, “Is it time to start my own venture?” You should have. Apparently “seven of America’s top 10 billionaires are self-made” and maybe it’s time to take a quiet moment for some serious thinking about being next in line.
I took my own entrepreneurial plunge years ago, and even if I am not in George and his partner Rande Gerber’s success category, entrepreneurship has a lot to offer and is certainly the mainstay of the millennial generation business psyche. If you’re contemplating the plunge, there are five crucial questions you need to ask yourself about pursuing greater financial rewards and freedom because it takes a strong constitution and commitment to take “the road less traveled.”
- Find A Distinct Market Niche/Gap That Fills A Need That Isn’t Being Filled. It’s old school advice but it’s funny how you find this niche when you’re very passionate about something. That always seems to be the tipping point. That’s exactly what Clooney and Gerber did. Their joint passion found an untapped niche with a mega-brand that had a major need to fill a gap. In my case, I am deeply involved in the fashion world via my clients and my own deep-rooted involvement. As a result, I’m always asking questions, taking impromptu meetings, networking, and in general just listening. This recently led to me becoming an angel investor in a new start-up, 11Honore, that is bringing “size inclusive runway fashion and editorials” to a significant market that has been consistently underserved. The best part is this opportunity allows me to bring my operational and creative skillset to bear as an advisor in an industry I love. I knew it was truly a great idea because I had been closely following market gaps and recognized the Founders, Patrick Herning and Kathryn Retzer, had identified a significant, growing niche that was being underserved combined with pent up demand. Women in sizes 10 to 20 want luxury choices in clothing and not just gorgeous handbags and shoes. Real choices are now on the way.
- Is There a Viable, Sustainable Business Model? You love the idea. That doesn’t mean it can really grow into a money-making enterprise. Sit down. Do your homework. How much do you need to invest or raise, is there really a consumer or business demand for the concept, and more importantly can you generate a revenue stream that can grow after the initial seed capital? I’ve watched a particular company develop a software platform that is visually stunning but is a tough sell in terms of roll out potential. There really is no way to monetize the concept. They are several years in and still haven’t developed a sustainable model. On the other hand, tech partners of mine who are skilled developers and coders, were watching how restaurants were trying to easily and equitably distribute tips to the wait staff at the end of an evening. It always seemed like a huge struggle. They did their homework and found there wasn’t a software solution out in the marketplace. The rest is history.
- How Difficult Is the Execution? This is a double-edged sword. Sometimes the barrier is not as great as you think. Other times you are taking on such a highly competitive marketplace, it seems almost insurmountable to breakthrough in a category. Besides assembling a small but passionate team who has the core competency to execute, make sure they are a 100% behind the concept. Second, it’s always best to focus on an even smaller micro-niche with your idea, execute it well and then move on to a hyper-focused growth strategy. If you can slowly roll out categories or markets using this approach, you often have a better chance of success while generating revenues to fuel your growth. Healthy markets and competitors are a sign that new entrants can change the paradigm with great ideas. Lyft is doing this right now and making real inroads in a competitive marketplace. They’ve strategically rolled out and are gaining momentum by using their experience while not taking on too much at one time before they are ready.
- Get Feedback. This is often the most critical step in pursuing a great idea. It’s important to extensively network inside and outside your current business circles. I do this all the time by accepting invitations to events, lunches, and dinners I might not normally attend. Warning. It can be exhausting. In fact, it’s one of the best ways to get great feedback. I look for the critical comments as these are often the adjustments you need to hear from the outside to make an idea better. I’m currently working on a new idea centered around emerging designers and I’ve been vetting it very informally to see if it has potential. Bottom line. It needs a bit more refinement. Finally, I also try to find the Malcom Gladwell “Connectors” when I am in a business or social situation. They can often make the critical difference in introducing you to the right people to propel your idea forward.
- Are You Willing To Let Your Lifestyle Be Impacted? This is a critical question you have to ask yourself. Truly not everyone is willing to make the personal sacrifices required including having their lifestyle and downtime become completely compromised for long stretches of time. I’ve always loved the journey. It’s not a sprint but a marathon. Ask yourself if you are totally committed and “in”. I know lots of people who enjoy a more structured work commitment and being an entrepreneur is probably not the right path for them. If you don’t enjoy the adventure, don’t do it. Make sure your team also feels the same way, or there is a huge culture clash. It’s exciting when you all start succeeding together. Just remember, besides taking years to see results, if you don’t have the passion, no one else will.