David Cummings on Startups

Answering the “How Big Do You Want to Make Your Startup” Question

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David Cummings

in

One of the questions I like to ask entrepreneurs is “How big do you want to make your startup” so that I can get a feel for their ambition. At this morning’s Shotput Ventures office hours at Emory, I asked the question several times and received vague, indeterminate answers, mostly centered around being large and dominating their industry. I think it is important to have a more concrete answer to this question and it should incorporate the following:

  • How much do you want the company to be worth in enterprise value?
  • What timeframe do you want to achieve this?
  • How confident are you that you can do this?

My advice is to think through these questions and have a consistent, cohesive answer.

Comments

4 responses to “Answering the “How Big Do You Want to Make Your Startup” Question”

  1. Paul Freet Avatar
    Paul Freet

    Great question! Most entrepreneurs have not thought this through. They want to be a tycoon more than a businessman.

    My ideal startup is a 12 person company, that I own 100% of, which throws off tremendous cash. What is yours?

    Reply
    1. davidcummings Avatar
      davidcummings

      Thanks Paul. Here are some criteria I like:

      Defining a Successful Business

      For me, it depends if I’m shooting for the moon or looking to build a company like you describe (which is great!).

      Reply
  2. Wade Sonenberg Avatar
    Wade Sonenberg

    Hey David, it was great meeting you & the team today. I think we’re as guilty as anyone on this. I can’t speak for everyone else, but I think there are two things that might go on more than we’d like to admit:

    1.) Too often we spend all our time focused on making the project work technically, and ignoring the business end.

    2.) Even when we’ve done some preliminary projections, it’s hard (and shouldn’t be) to present them in front of person(s) that may be quite more sophisticated in terms of financial models and product life cycle.

    Reply
    1. davidcummings Avatar
      davidcummings

      Thanks Wade. Great points about thinking about the technology more than the business and not spending much time on projections.

      Reply

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