Questions to Analyze an Early Stage Startup

After talking to a couple early stage startups this week, and trying to help, I realized it would be good to have a list of standard questions to start with to help analyze and understand a business at this stage. By early stage, I’m referring to a business that already has a product and paying customers, but under $1 million in revenue and no repeatable sales process.

Sales

  • What are some of your customers?
  • How did you find them?
  • How long was the sales process from first conversation?
  • How much are they paying?
  • What’s your ideal customer?
  • What have you tried to generate leads?
  • What are your sales challenges right now?

Marketing

  • What’s your positioning?
  • What’s your pricing model?
  • Where are you advertising?
  • What have you tried that didn’t work?
  • Who are you competitors?
  • What Google search term best represents your business?
  • What do you want people to think of when they think of your business?
  • What are your marketing challenges right now?

Operations

  • What’s your burn rate?
  • How many months of cash do you have left?
  • What are your fixed and variable costs?
  • Where are you in the fundraising process, if at all?
  • What are your operations challenges right now?

Technology

  • What’s your product written in?
  • Who does the development?
  • What’s the engineering process like?
  • What’s the product management process like?
  • What are your technology challenges right now?

This is a good start to analyzing an early stage startup and I’m going to use it in the future.

What else? What did I miss that is useful to analyze an early stage startup?

One thought on “Questions to Analyze an Early Stage Startup

  1. David, this discussion framework is extremely useful for conversations with early stage companies as you define them, but also for talking to and analyzing larger companies.

    I am interested in the sequence in which you present the categories of questions, beginning with sales, then working deeper into marketing and operations, and getting into technology last. A pitfall many early stage companies experience is falling in love with their technology and neglecting the fact that, to thrive, they need to get customers to fall in love with it too.

    Great post.

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