Wow, lots of “the sky is falling” reporting going on yesterday when ZipCar announced a new fund raising round. I exchanged DM’s with a couple of local reporters on how the Series G round didn’t have to mean that the company was having trouble, and looks like (hopefully for ZipCar fans) I was right.
Dan Primack actually did some real reporting here and got the scoop - ZipCar’s IPO was taking longer than expected due to regulatory issues and the company needed a top off round of capital prior to going public. These types of last minute financings (i.e. right before going public) can be really lucrative to investors, so props to the firms that stepped up and good luck to them on making a quick, solid return. And serious Kudos to Dan for taking the time to find out what was really happening.
Also, props to Galen Moore for taking the story in a totally different direction and commenting on the lack of ZipCars in less ritzy neighborhoods. As the company grows they are probably going to have to take this sort of publicity into account…
In how to choose the right business idea, I introduced the concept of the Idea Funnel. Like me, you could use the idea funnel to narrow down a bunch of startup business ideas into few viable ones. I talked about stage 1 of the due diligence process, namely, “Is the idea viable?”. In this post, I will present the second and final stage, namely, “Can I execute on it?”.
Stage 2: Can I execute on the business idea?
In stage 2, you are focused on things that you need to successfully take your business idea to the market. Here are the few things you need to have:
Last week, I gave a talk on “Starting a Business upon Graduation” to a group of Harvard Business School students. In addition to sharing my experiences in starting Pixily right after graduating from Wharton, I shared my approach on how one should zero in on a viable business idea.
I approach the idea development process similar to how one approaches sales leads within a sales funnel (see below). I start of with a number of rough business ideas and put each idea through the due diligence funnel. Some make it through the funnel and some don’t. Ideas that make it through the funnel are more viable and have a higher chance of being successful.