Three questions to ask before turning your “passion” into a startup
By Micah Rosenbloom
Entrepreneurs solving their own problems can be a formula for startup success.
But often, I see founders over-index on their unique situations.
Before starting, consider the following:
🥸 Are you weird?
🧮 Are you objective or obsessed?
📈 Is it a big market or a mirage?
For instance, I would love coffee-infused hummus. But I’d have to do a lot of market research before investing in a company that manufactures it. As VCs, we see founders of all stripes have difficulty balancing their personal enthusiasm and market realities.
E.g., I’ve met dozens of doctors and dentists who have “invented” products that they passionately believe will change their specialty. They typically don’t spend much time figuring out what it would cost to develop, how many buyers there are, and how others practice.
If you’re interested in pursuing a passion project as a startup, it is essential to subject it to serious due diligence. Here are the questions I’d advise all founders to ask before going all-in on a startup idea that seems unorthodox.
🥸 Are you weird?
The kind of person who starts a company in response to a personal challenge might not be representative of the target user. Entrepreneurs often exhibit higher than average levels of resourcefulness and an almost pathological desire to solve problems.
These zealots believe that their enthusiasm, and the solution that emerges from it, will appeal to the average customer. They presuppose that these buyers will have the same level of time, money, and other resources to buy into this often unorthodox/expensive offering.
The reality is that people regularly stick with sub-par products due to inertia, insufficient resources, or a plain lack of interest in paying for a higher quality offering. There are way more vitamins in the world than pain killers.
🧮 Are you objective or obsessed?
A classic case is a founder who resolves to remake the health care system after their family endures a medical emergency. They wonder why no one has revolutionized this market the way Uber did for transportation?
After burning large amounts of time/money, they uncover the complex interactions between payers, providers, and regulators that led to the poor product in the first place. Often, payment structures are what dictates sub-par experiences, not product design.
Poor experiences arise when the system has been designed–intentionally–around the needs of another party at the end-users expense. That is the problem that needs to be solved. Hostility from entrenched players, not apathy, typically leads to a lack of progress for users.
📈 Is it a big market or a mirage?
Entrepreneurs who have had good exits and subsequently discovered a new hobby often want to use their hard-won entrepreneurial skills to turn it into a high-growth business.
These founders may do less diligence on their business because they believe their first-hand experience/enthusiasm is equivalent. They rationalize that they see where the puck is going and can see a new trend emerging.
They bring fresh perspectives and capital to these markets. Sometimes, these efforts can become large businesses. But entrepreneurial enthusiasm can blind founders to the fact that their startup’s TAM may not be “venture scale.”
It’s important not to let passion for a particular area completely blind you to the stark reality that the origami industry, while a beautiful artform and creative pursuit, is unlikely to support a multi-billion dollar tech company.
All this said, when in doubt, start. There are plenty of examples of incredibly niche pursuits — spectating video games, sleeping on a stranger’s couch, etc. — that turned into big businesses over the disbelief of naysayers.
Bottled water was once a bad joke. Today, it’s a multi-billion dollar industry. Preferences and cultures change, and great entrepreneurs have to get comfortable swimming against the tide at the start.
But if people tell you that your idea is ludicrous, take the criticism to heart. Protect your passion but embrace and encourage your inner skeptic simultaneously. Maybe your idea is just bad? Or a poor fit given other market realities.
Balance instincts/experience with new perspectives/voices. Find a thought partner with a different POV to challenge you. Seek objective data to validate your intuitions. Sell a batch of coffee hummus at a farmer’s market before signing manufacturing partners.
The ultimate founding story draws from one’s experiences or interests, but not exclusively so. Keep one foot in the old; one in the new.
