“More important than writing a business plan,” states Andy Sack, serial entrepreneur and investor, “entrepreneurs need to get out and meet the people and explore the markets they’ll be serving.” Contradictory advice for students entering a business plan competition? Not really.
When Andy Sack made that suggestion as part of his “Start-up Checklist for Entrepreneurs” presentation to launch the Resource Nights for the 2012 UW Business Plan Competition, murmurs and nervous laughter broke out in the auditorium. No one expected to hear that. But as Sack reminded his audience, “Ideas are not opportunities.” Thinking of starting a restaurant? Go stand on the street corner that you’d like to rent and ask the people who walk by if they’d come in for dinner.
Sack knows early-stage entrepreneurship. He’s got 17 years of experience as a successful entrepreneur, and partner and co-founder of TechStars, Founder’s Co-op and Lighter Capital. The tech newsletter Geekwire called him “one of the three people to know in Seattle.”
“Andy’s the reality-check guy,” says Connie Bourassa-Shaw, director of the UW Center for Innovation and Entrepreneurship. “He’s direct, honest, and no nonsense. If you say that you’re in it for the money, he’ll tell you there are a million easier ways to make a living. And very often, your question to him will result in a question back at you: ‘What do you think?’ He wants to know what you’re thinking.”
After you’ve got your idea, Sack said, go directly to opportunity validation. Can you create value—and make money? Put it all down on one sheet of paper. His other fundamentals for first-time entrepreneurs include:
- Resolve founder issues in the first 90 days: who does what and who earns how much?
- Make a list of the top 10 personal reasons why you’re starting this company—followed up by the reasons why you shouldn’t do it.
- Ask yourself how much time and money you’re willing to invest. Really. Put down the number of months, and the dollar amount.
- Write an executive summary and share it with five people you respect. If you’re not hearing some negatives, you’re not trying hard enough. You should also be telling your story early and often and listening to what people say.
- Establish [companynamelegal]@gmail.com and sending all legal correspondence there.
Perhaps most importantly, Sack stressed the value of the team. “More than anything else in entrepreneurship, people matter,” he repeated. “You need to be able to understand, communicate and listen to your employees, partners and investors. They don’t teach that skill set much in school, so get it down now.”