The objective of the survey was to provoke thought amongst the startup community about how best to approach a startup and to solicit real opinions on how startup participants manage the startup process. The long term goal of the survey process is to see how startup trends are changing based on market and economic conditions.
I would like to thank everyone that participated and took the time out of their busy schedule to answer the questions. I was extremely impressed by the honesty exhibited by individuals that provided comments and reasons behind their selections.
1.) Should you craft an exit strategy in the early stages of a company.
71.4 % Yes
14.3 % No
14.3 % Other
2.) Are conflicts and disagreements amongst co-founders good or bad for a startup.
3.) All Internet related startups can be started and launched with little or no investment capital.
4.) Startups should have a time line for milestone achievement.
5.) Establishing business metrics in the early stages of a company is an effective management tool to measure progress against goals.
6.) A startup should always be engaged in fund raising even if the startup has proper funding.
In general most entrepreneurs understand that continually being in the hunt for investment capital is necessary part of an entrepreneur’s life. The comments did bring out that not everyone is good at this and it does eat up a lot of time and effort. These last points are well taken and does imply that someone in the startup needs to be a good fund raiser. In many cases this is all that member will be doing allowing the other members to get the real work done.
7.) Equity only compensation is an effective way to attract staff to a startup company.
8.) Are venture capitalists a good source of advice in the early stages of company formation even if you are not seeking their investment.
9.)What should your reaction be to an investor when they decide not to invest in your startup.
0.0% My idea and company are not worthy of investment
14.3% The investor does not know anything about my business
07.1% The company should change its strategy
28.6% The investor is not knowledgeable about my business sector
00.0% We are asking for too much money
10.) What should you do if your working capital runs out.
0.0% Close the company
0.0% Mothball the company
14.3% Scale the company down
21.4% Change the product or service
57.1% Seek new investment sources
14.3% Put all of your own money into the company
11.)All startups should prepare a business plan even if they are self funded.
7.1 % Other
12.) A commitment to a startup lifestyle will have no impact on an entrepreneur’s family or close friends.
13.) If the majority of the people you survey think your business idea is a good one you should start a company based on that idea.
28.6% Ask them why they think it is a good idea
64.3% Ask them if they would invest in the idea
14.) Startups should assume that outside(non-founder or friends) investors will invest in their company.
15.) Institutional(Venture Capital/Bank Loan) investment is required for a company to reach its full potential?
16.) Founders should invest all of their savings into their startups before seeking external funding.
17.) Startup teams should be multidisciplinary including business, finance, legal, domain and technical expertise.
18.) Startup founders should have a preset time line for when a business will be successful.
19.) Startup entrepreneurs should get approval form their family members before starting a company.
7.1% All close family
14.3% Direct family members
14.3% Husband or Wife
20.) Should a company’s original business plan or idea be modified before the company receives market feedback.
00.0% If A Company Can Not Receive Investment Capital
14.3% If Too Hard To Bring To Develop And Bring To Market
Most the comments in the Other category support the notion of changing direction based in different sources of information. This pushes the general consensus into the yes category.
It also indicates that entrepreneurs are beginning to change their notions about how much investment, the form of investment and the time-line for success are changing. It will be interesting to see if next years survey will differ from the current results.
Once again I do appreciate the contribution of the participants and the valuable information they have provided.. Having real life feedback to tough startup questions will help newly minted entrepreneurs, people considering a startup and existing professionals.
2010 Answers To The 20 Questions Every Startup Should Answer