When I was a senior in college at the Wharton School of the University of Pennsylvania, already hard at work on my first start-up, I found myself standing next to the Dean of Wharton, Thomas Gerrity. Dean Gerrity was a pretty impressive guy. He was renowned for being the only Dean of a business school that had actually run a huge business. He had gotten a double undergrad from MIT, been a Rhodes Scholar, then gotten a PhD from MIT, but then he started the Index Group and grew that to be a billion dollar consulting company.
Yeah, he is a lot smarter than me.
So I told him that I had a consulting company and asked for his advice on starting a company and he said simply, “Have your first customer before you start”.
It doesn’t get simpler or truer than that. The first paying customer is always the hardest one. Now you have a reference-able client, you have revenue, you have success stories. That is half the business right there. Getting that first customer is similar in many ways to finding a co-founder. If you struggle to find a co-founder and can’t find someone that is interested in buying before you start the company, you might be barking up the wrong tree. These are all good gating criteria to tell you if you are ready to be an entrepreneur or if your idea is credible.