Vetting Your Idea

Business Week:

An aspiring entrepreneur has an idea for a new business. He thinks it’s great, but how can he test it?

Seth Godin:

The first thing people considering starting a business should do is ask themselves — honestly — whether they’re building a freelance venture or an entrepreneurial venture. A freelancer gets paid to work. An entrepreneur makes money while she sleeps.

There’s nothing wrong with freelancing — with creating something interesting on a bespoke basis. It’s like having a job, but you’re the boss. But you have to recognize that at the beginning and build the business accordingly. You shouldn’t raise money, you should keep costs low, and so on. An entrepreneur, in contrast, raises money and hires people to do the work so that she can focus on growth.

Startups face enough challenges. Overcoming a bad business model shouldn’t be one of them. In general, people don’t think about it enough. They focus on their great idea. But an idea requires five minutes of effort. You should throw it away if it’s a bad one.

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