The Idea Is the Easy Part

brian dovey, the idea is the easy part, myths and realities of the startup world standing at the beginning of a new idea is exhilarating.

the promise of building something new, guiding it towards success.

it's no wonder the startup world has sparked the public's imagination.

but contrary to popular belief, success in the startup world isn't just about being a young tech genius with a groundbreaking idea.

a lot of people have great ideas.

even more think they do.

but starting a successful business requires more than just a spark of genius or a catchy pitch.

it might not make for good headlines, but the idea is the easy part.

in this chapter, we'll debunk the glamorous myths and explore the practical realities of the world of startups and entrepreneurship.

you'll learn how to tell if your ideas are viable in the real world, how to avoid common pitfalls that have tripped others up, and pull back the curtains on the decision-making process of investors.

you'll also learn about the realities behind popular media representations of startup founders, their capital funding, and what it means to be successful.

if you're curious about what it takes, or you're ready to take the plunge and learn the truth about successful founders and entrepreneurs, welcome to the misunderstood world of startups.

the myth of a tech bro most people have a distinct mental image when they picture an entrepreneur.

the whiz kid striking gold with a billion-dollar idea before the age of 30.

but the reality looks quite different.

let's see what successful startup founders really look like, and why you probably have what it takes to join them.

whilst founders in their 20s might get a lot of press, this is the exception, not the rule.

the average age of successful tech company founders is 39, with most of the work done over the age of 45.

this makes sense when you think about it.

with age comes experience, so older entrepreneurs can be more likely to see gaps in their industry and have the knowledge to meet that need.

startups are inherently risky, but a good entrepreneur will have a more calculated risk attitude than you might assume.

contrary to the reckless gambler stereotype, seasoned entrepreneurs act to mitigate risk, not chase it.

they ask questions, listen, thoroughly research, and work to inform themselves before big decisions, even if they don't have access to the full picture.

it might also surprise you to learn that founders are rarely in the startup world to get rich quick.

the best entrepreneurs have a vision and a sense of purpose that goes deeper than money.

venture capitalists are quick to rule out the ones who seem only interested in the payday, since they rarely have the passion to make their big idea a reality.

profit follows purpose, and investors can see it.

of course, the startup scene isn't perfect.

venture capitalists globally are beginning to realize how discriminatory financing practices based on gender, race, or cultural background are holding them back.

the good news is that many companies are acknowledging these problems and trying to solve them.

in 2021, goldman sachs set up a new initiative, one million black women, to support startups by at least a million black and female entrepreneurs by 2030.

diverse ideas come from diverse people.

and whilst it still isn't perfect, investors are catching up.

so what does it take to be an entrepreneur?

the biggest indicator of success is commitment to your purpose and the drive to understand a problem.

you don't need to have a harvard business degree, or any degree for that matter, to be successful.

entrepreneurs can blossom at any age from any background.

but what they share is a willingness to dive into problems, a habit of due diligence, and a sense of purpose that drives them to change the world.

getting the right idea a new idea is exciting, and it can be fun to brainstorm what might be the next big thing.

but how do you know your idea will make it from the whiteboard to the boardroom?

the best opportunities meet real, unmet needs whilst overcoming resistance to change.

most of the time, that doesn't come in the form of a breakthrough innovation or an exciting new technology.

instead, the best ideas often come from adapting an idea from one industry to another or combining old ideas in new ways.

before you look for investors for your next great idea, you'll want to answer two core questions.

have you identified a genuine unmet need, and do you have the ability to fill that need?

sometimes, we can learn more from a story of failure than of success.

let's look at some of the venture capitalist domain associates' healthcare startups that didn't work out, and what you can do to avoid making the same mistakes.

when the startup novolar first got funding, dentists had assured them that there was absolutely a need for their proposed drug to counteract the numbing after a dental procedure.

after all, who wants to go back to work with half their face numb?

it was only after they developed the product that they discovered that, despite initial assurances, dentists had very little interest in actually upselling their patients on the product.

so find out if your product or service is a truly unmet need, or if it's just nice to have.

before you invest time and money in your big idea, you should also have a good idea of your competition.

what are they working on?

what relationships do they have with customers?

and how might they respond when you start to pose a threat?

when riva invented a new type of cardiac stent that reduced the risk of blood clots, it didn't anticipate that bigger companies might be developing solutions too.

by the time the riva stent finally hit the market, someone else had already solved the problem.

an important but often overlooked question you should ask is, can you make this happen?

one startup, trancell, set out to design an artificial pancreas to automatically detect blood sugar and release insulin in patients with diabetes.

the design combined a series of solutions that bioengineers had already solved, but together they started to cause problems.

every time they got it working for one problem, it caused another elsewhere.

sometimes, the only reason someone else hasn't come out with your idea is because they discovered it simply wasn't possible.

other times, you might just not be in the right position to pull it off.

even if you're confident you have a product that meets an unmet need, and you're able to make it happen, the bottom line always comes down to financials.

what patents do you own, and how well can you defend them?

profit follows purpose, but can you stay solvent until you reach profitability?

domain rarely invests in major medical imaging equipment because things like mris and ct scan machines are rarely replaced in hospitals.

the time between development and profitability is so long that small companies can struggle to keep their heads above water in the meantime.

when judging your idea for feasibility, be aware of your rose-tinted glasses.

to become a successful founder, you need to commit to an idea you believe in, so don't be afraid to wait for an idea that's really worth your time.

what venture capitalists really want before we go much further, we need to address the elephant in the room, or well, the shark.

yes, we're sorry, shark tank has been lying to you.

the concept of a founder walking into a pitch meeting, selling their great idea and walking out with millions of dollars is a myth.

venture capitalists like domain aren't looking for ideas to throw money at, they're looking at building an ongoing relationship with promising founders.

after that polished sales pitch, vcs go away and do their homework.

they check your assumptions, research the market, and come back later with a valuation.

if they come back at all, that is.

if you're seeking out investments from venture capitalists, start by researching who you want to pitch to.

like domain with medtech, most vcs have a niche they work in and don't like it when you haven't done your research.

don't blast out your proposal to hundreds of organizations.

aside from the potential of giving away your idea to competitors, you're also showing that you care about the funding over the business relationship.

when you're ready to seek out a fund, customize your approach.

find out which firms specialize in your niche and see if they're right for you.

how compatible you and your team are with a particular firm can matter as much as the idea itself, so investors are far more likely to invest in you if you can build a relationship first.

look for mutual contacts.

then, send a brief summary email introducing yourself and your team.

it shouldn't be more than one or two pages, introducing the overall vision and what progress you've already made.

this isn't a comprehensive overview of every detail, but a brief story of what your idea is, the difference that it will make, and why you're the right person to bring it to fruition.

if they want to know more, they may ask for a pitch deck and then a pitch meeting.

there are plenty of resources out there about how to make those sound and look good.

for our purposes, the important thing is that you know your business and tell the truth.

when the vc does their own research and finds out a competitor is developing the same product, they're going to wonder if you didn't do your research, or worse, if you did your research and lied about it.

the final thing to remember is that sometimes a larger sum doesn't mean a better deal.

for most vcs, the number they give you at the beginning is an initial investment.

be cautious of firms that want large stakes in your company in exchange for higher upfront funding.

it's rare for a firm to invest in a startup in one lump sum.

it's even rarer for firms to come up with wildly different valuations for your company.

take your time to understand your contract before you agree to any funding decisions.

time for the real work one of the biggest myths in the startup world is that with a great idea and an investor on your side, you're set.

but in reality, you've just arrived at the starting line.

investors have provided the ingredients, now it's time to cook.

of the 250 startups that domain has invested in over the years, not a single one has ended up following the original plan.

to be successful, a startup founder needs what might seem like a contradictory blend of dedication to their goal and flexibility to pivot when things go wrong.

focus on the things that are truly essential to your startup.

taking hours to decide what color to paint the walls or if you should have a ping-pong table in your break room will probably just distract you from the big, important decisions you actually should be making.

write a list of things you do that add genuine value to the startup.

now write a list of things that just keep the lights on.

what actually needs to be done in-house?

you can outsource things like payroll and accountancy and retain a law firm instead of hiring for those positions full-time.

keep a small team of people who add value and be vigilant about where their time is going.

the other benefit of a lean team is that it makes it easier to pivot if necessary.

some of the most innovative and successful products are born from repurposing something you already have in a new context.

global technology inc. was a startup founded in the early 70s by a cardiovascular researcher.

he designed an auto-injecting needle to help people without medical training to help heart attack patients, but the technology caught the attention of the u.s. department of defense.

the army had recently gotten a sample of a nerve gas antidote developed by the russians and wanted to know if survivaltech could reverse-engineer this antidote and adapt their technology into a rapid, no-fuss delivery method.

this contract was an incredible break for what was, at the time, a small company, but an even more exciting pivot was on the horizon.

survival technology started to think about what other emergencies could benefit from a rapid injection without the need for a highly trained medical staff.

they launched the epipen in 1980, and their technology continues to save lives every day.

sometimes, the journey of a startup takes unexpected turns that lead to even greater destinations than originally imagined.

stay focused on your goals, but keep an eye open for opportunities.

your idea might grow in ways you never anticipated.

when a startup reaches its end all startups end in one of just a few ways.

the good ends usually involve going public or being acquired by a larger firm.

but not every startup ends well.

shutting your doors might be a real possibility you need to think about.

know when to cut your losses and plan your next steps.

keeping your company private indefinitely is almost impossible, especially since vcs eventually want to cash out.

keep that in mind before you decide to accept investments.

so let's look at the reality of each of these outcomes and what that might mean for you.

let's start with the good.

becoming a public company is often considered a significant achievement, offering a startup access to a wider pool of capital and increased visibility.

the other benefit is that it can allow founders and investors to cash out.

on the flip side, this move will also increase scrutiny and pressure and shift the priority of a startup from innovation toward financials.

being acquired by a larger firm can also be a great outcome for startups.

it provides an exit strategy for the founders and early investors, while granting access to the acquiring company's resources, expertise, and customer base.

although these are exciting outcomes, in both these scenarios, a founder might face the possibility of having to step aside for new leadership.

it's not uncommon that you'll be asked to hand over the reins to an experienced executive who will navigate the complexities of a public company or integrate smoothly into an acquired firm.

it's better to expect this from the start and be planning your next steps.

now for the bad.

sometimes shutting down can be the only viable option.

while this can be a difficult decision, it's essential to recognize that failure is an inherent part of entrepreneurship.

shutting down a startup isn't a reflection of personal failure, but rather a strategic choice to prevent further financial losses.

it also provides an opportunity for valuable lessons and personal growth.

the experience gained from the startup journey can be leveraged for future endeavors, and the network built during this time can be invaluable.

entrepreneurs should view the end of a startup as a pivot point, an opportunity to regroup, learn, and apply those lessons to new ventures.

whether it ends in tears or champagne, your journey as a founder will equip you for whatever comes next.

in this chapter to the idea is the easy part by brian dovey, you've learned that success in startups isn't just about having a groundbreaking idea, but also involves resilience, adaptability, and building long-term relationships with your investors.

the entrepreneurial journey is often a lot more complex than the headlines let on.

armed with the information in this chapter, you can walk away with a more realistic view of how to take your business from idea to reality.

entrepreneurial success is rarely an overnight phenomenon, but while the idea might be the easy part, it can still change the world.

okay, that's it for this chapter.

thanks so much for listening, and if you can, please take the time to leave us a rating or a comment.

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see you in the next chapter.