Dull thoughts in a sharp world.

Had the fortunate opportunity to speak at the Harvard Business School Entrepreneurship Conference yesterday with some smart entrepreneurships in front of even smarter b-school students.

Though the panel lacked the color of our personal stories, I think we covered some interesting points.  Here were some of the questions and answers (both said and unsaid bc some of these were random notes I took on a piece of paper):

1)  How do you decide if an idea is a good one?

The problem with identifying a good idea, is that most people associate the idea with a product or service.  The issue is that your idea for a product is going change dozens if not hundreds of times.

There is really three things that I think about:  The problem, the marketplace, and the feasibility

1)    You are solving a real problem with real pain.  Classic example is aspirin vs vitamins?  Vitamins suppliment health, aspiring solves pain.  Know that not only do your customers want your product, but NEED your product and are willing to pay for it.

2)    The marketplace is booming.  A growing marketplace can carry an average product.  12 year olds could have made money in real estate in 2001 and did.

3)    Third, it is feasible to solve the problem.  Everyone wants a beer that makes your smarter.  Can you overcome a cold start, can you distribute the product, can you build product.

These are three key components I would look at.

How should you think about ideas in areas that you don’t have significant industry background in?

This puts you at a disadvantage.  But I do not place much emphasis on having work experience in the industry as ensuring you have a strong passion for the sector and consumer.   I moved 4 times in 3 years… so I don’t know advertising, but I know what it is to move and look for a place to live.

And this is where recruitment is so vital.  I prefer startup teams of 3 to 4 people, a CEO sales guy, technologist, and a product guy or gale.  So if you are the CEO sales part, find the product person the product.

How do you know when it’s time to take an idea and convert it into a business?

Great ideas form over long periods of time, evolving from multiple feedback loops and iterations.  Rarely a snap moment of “holy shit, I have a great idea!”.  Often you’re trying to solve a problem and your initial solution is stupid.  It’s more about whether the market is ready for your problem to be solved.

Also, you have to reach a personal tippping point where you are willing to dedicate the next 1, 2, even 5 years to this problem.

Additional Tidbits

Be temporarily mentally insane.

Mentally insane… you’ll need to be incredibly passionate to the point where you are borderline insane.  You’ll have to hunt down customers, literally stalk clients, and after 100 vc’s say know, you’ll need to be delusional enough to believe the next one will say yes.

Temporarity…Far too often, entrepreneurship hold on to their initial hypothesis too long, not recognizing that they may be wrong.  Markets are surprisingly efficient and sometimes products are not received as expected.  So fairly early and often to get feedback.

Overall, had a great and met a ton of smart people.  Got to chat with the CEO of Pandora, founder of Internet Real Estate Group, and co-founder of Sam Adams Brewery.  The entrepreneurial environment at the HBS conference was energizing.