Investing in your own ideas is quite different from investing in other people’s ideas. This sort of investment should be approached with the same level of caution if not more as when you invest in other people’s ideas. You’ve probably heard many stories of people who have invested their life savings and more into ideas that never brought the riches that they imagined.
In some cases, the ideas were actually not as good as their creators imagined they were and in other cases the ideas were good but the owners of the ideas through their actions or inactions drove the business to failure.
When investing in your idea you must know that you face the same risks as when you invest in other people’s ideas. If you are worried that you can’t trust people’s ideas with your money then you should also worry that you can’t trust your own ideas. Some of the things you should know before investing in your idea are:
The risks are the same: You may think that other people’s ideas fail because their ideas weren’t as good or they didn’t put in as much effort as you. This may be true but you also need to consider that your idea may not be as good as you think it is and you may also be overestimating how much effort you’ll actually be able to put into the investment.
Unless you’ve invested before, hopefully more than once, you may not know the risks involved or just how much work it takes. Analyze the risks as you would for other people’s ideas and don’t overestimate your abilities because of passion.
There’s no room for emotion: As an investor you cannot make your decisions based on your emotions. You may love an idea simple because it is yours or you may try to control all aspects of the business because you are afraid to see somebody screw up your idea.
The result is that you’re liable to make a poor decision. Take a step back and try not to get too attached to the idea.
Seek and Heed counsel: This may be harder than most people think. First, you may have to listen to a lot of negative comments about something you created and love. Secondly, you may have to admit to yourself that somebody else’s idea may improve your own.
When seeking advice ask objective people and people who may also be experts in that field. If you have to ask a friend let it be the one friend who won’t spare your feelings.
A good partner may be the difference: A good partner may add onto your idea or they may offer expertise in areas that you are unfamiliar with. Don’t be afraid to seek partners or share the glory because a good partner may be the difference between failure and success.
Don’t simply look to friends and family but branch out and find a partner who will compliment your own efforts because you’ll always know that as you work on your end they too are working on theirs.