Anyone in my position has seen somewhere in the low thousands of pitches. Everything from students to entrepreneurs to corporate intrapreneurs. I was struck by this recently, looking at someone present a chart of the size of their market and the rate at which customers would flock to this young venture’s offerings. When I questioned the numbers, he blustered on with full confidence.
I had an image, at that point, of this good-looking, articulate, and clearly capable entrepreneur at home late one night, the kids were tucked in, and sitting across the kitchen table from his wife. The business plan was in front of them, next to their family budget, the paychecks, and mortgage payments, deciding whether it was worth quitting his job and chasing this dream… and, with those numbers, I just couldn’t see him looking her in the eye.
This is the kitchen table test, and it’s become for me one of the most important tests, real and imaginary, that I use to gauge how serious someone is about their venture opportunity (or their marriage).
It’s easy to come up with numbers describing the size of your market, the price your customers will pay, the cost of doing business. Too easy, these days, with google, excel, and cool powerpoint charts. All this makes it easy to forget that these are only assumptions about a reality on which your actual success will depend. Make them up, grab the first remotely related numbers off a google search, or in other ways work the data to fit your story and you will fall. Hard.
If you’re sitting across the table from professional investors, they will either know those numbers already or find them out soon after talking with you. If your numbers aren’t right, they will simply not take your calls anymore. No more harm done than that.
But if you’re sitting across the kitchen table, betting your job, mortgage, and marriage on those numbers, that’s a different story altogether—and a better test of whether you’re ready to make the leap.
There is no such thing as perfect information. Instead, you need to have the best numbers you can find, balanced with a healthy suspicion they’re probably wrong. That doesn't happen by spending more time with your excel spreadsheet, or even with google. It happens by making assumptions and then, recognizing them as such, getting out and testing whetherh they're the right assumptions or not. Talk to customers. Talk to investors. Talk to anyone and everyone with a good perspective on the market you're looking at. By doing so, you will gain better confidence in not only your assumptions, but in your doubts as well.
As Dale Carnegie said, "Inaction breeds doubt and fear. Action breeds confidence and courage. If you want to conquer fear, do not sit home and think about it. Go out and get busy." When your confidence and doubt are both present and grounded in experience, then you can pass the kitchen table test.
Great article! Being an entrepreneur when you have people depending on you makes life that much harder. Of course when starting out, one person’s delusion is another’s inspiration. Only time can tell what’s real and what’s fantasy.