I have created several startups over the years, some of them failed others managed to stay afloat. At one point I even had under my command the biggest jRPG Portal in Poland.
While that’s not totally relevant I just wanted to back up my claims with some real achievements, so you know I don’t pull stuff from thin air. Either way, we got the introduction to the article underway – we will try to figure out the good and the bad startup ideas.
What this article will not be is another list of things you need to have to create your own startup. You probably can get tons of those from uncle Google, so let’s not be repetitive and try to dig deeper. This article is going to be more about the factors you need to take into consideration. Launching a startup is actually not that hard, the tricky part is not letting it die.
So let’s begin with an optimistic question:
Why will you fail?
You really need to be realistic with your own project. Otherwise you may end up wasting not only your time, but the time of others and that hurts your reputation for future cases. Ask yourself what are the weak points of your projects and try to patch them up as good as you can. The issues will vary depending on individual projects, but let’s try to look at some general ones. You might think that you don’t really need to do it and that you will somehow manage everything on your own. That may be true sometimes, but in the majority of cases, if you have not planned out everything beforehand, you might as well not even start.
When we had talks with some investors on one of our startups, they were very keen on asking how our project brings something new to table. The “new” factor is a very important element in today’s market.
Don’t get the wrong idea though. Copies of different, successful sites are a common practice. If yours is one of them, ask yourself – does it have elements in it, that will make it better than the rest? It’s very important that you have something different, new, or better to offer. Even with a great and innovative idea you will still have problems with generating website traffic, with a bad idea it will be much harder.
Either with a new or existing idea you still face the same follow-up problem:
Do we really need it?
If you copy somebody else’s idea than make sure there is still a need for another website of its kind. Take a look at your future competitors and find out why they are successful and why some of them failed. You will need to learn from both if you want to have a shot. Sometimes patent issues may become a problem as well. Facebook has sued some of its local ripoff like StudiVZ in Germany. Wizards of the Coast have extensive patents on Trading Card Games which resulted in many lawsuits over the years, recently Nintendo has settled on undisclosed terms with Wizards regarding their Pokemon Card Game. Keep that in mind if you’re trying to copy ideas from different sites. If you have a new, brilliant idea you can try to get a patent on it yourself.
So what if your idea is a new one out there? In that case you need to do some research. Pitch your idea to some people and ask them if they would be interested in your service. Try to ask a variety of people, people that are different ages, gender, race etc., you want to get as much info as possible. You’re not only looking for the amount of interest, but also specifying your target audience. Going after the wrong type of folks with your project may very well be the difference between it being successful and dying a quick death.
The “need” of the market leads unavoidably to looking at the market itself.
Know your market
You may choose to have a startup targeted at a local area, to one country, a few countries, or even the whole world. Whichever it is, you need to know not only the audience in it, but gather knowledge about the market itself. For example, if you want to create a portal about racing games, you will want to find out as much about the market for racing games as possible. How much people play racing games, what figures do the units sell in, where are the best buyers etc. but the most important factor you might want to look at is: is the market going up or down and what are the future predictions in that regard. If you manage to step in during the early stages of the market developing then all the treasures later will be yours to take. On the other hand if the market is going down than it’s not really looking for more products, but rather to close down the least efficient ones and if you’re just starting, then you are one of the least efficient ones.
Another important factor we should look at closely is – how many people are there in your target audience. Try to come up with an estimate. It doesn’t have to be very accurate, anything close to 30% correctness is all right really. Then take this number and find what percent of this audience your competitors attract. Low numbers mean there’s still a lot of space for improvement and for you to come in. High percentages mean the contrary, but they also mean, that lot’s of the target audience is already aware that the Internet can expand their experience of their hobbies etc., which is a good thing as well.
Would you be interested?
That’s a question you have to ask yourself and answer it as honestly as you can. Actually not even that, answer it as skeptically as you can. Write down thoughts why you hate your own project, your fears with it etc.
When you have them down, you know what you still need to work on. Nothing can be too perfect and nothing really is. The flaws which you miss now will come out eventually at which point it maybe hard to counter them.
Finally we come to what we started with. You just absolutely have to have this checked. If your product will not be superior ‘on paper’ to the ones already out there, then your just wasting your time. While you work on your project, your competition is already working on making theirs better, so by the time you launch, they will be already way ahead.
Your only advantage is that your project is still flexible and you can take care of some core problems. Functioning projects don’t have that flexibility and the bigger they are, the longer and harder it is to make decisions about changing them.
That’s how you get ahead, or at least how you try.
What to take into consideration?
So now that we’ve got your start-up working on paper, let’s figure out if it will work in real life… or at least the virtual one.
The lazy crew factor
If you’re working alone, than you can skip this one all together, as only your motivation to work will impact the project. But chances are, you have a crew to work with you. In any project I’ve led/been a part of there always was a problem with some people being less motivated to work than others. You would imagine that this problem is non-existent if you choose to pay the crew to do their work. It’s not the case though. Even if their wages depend on it, some people will just not work at 100% or anything close to that and some will not work at all.
The problem is quite hard to tackle and will probably be one of your main issues. We can read coaching books, threaten, torture (in some countries at least) and so on, but the problem will remain. What you want to do, is minimize it as much, as possible. Demanding work reports from everyone including yourself at specific intervals of time (maybe once a week for example) seems to work quite well. Remember though to keep the balance between fighting laziness and becoming a despotic tyrant. If you push your crew too much, they will start to push back. You can’t expect too much from folks who don’t enjoy doing what they do. Startups are about vision and passion. Not only yours, but your teams as well.
Necessary skill set
So what do you really need to get the project up and running? There are some essential skills and some optional ones. In a perfect world you want all of them at the highest level possible, but in the real world that’s not likely, unless you have enough money to hire the very best (at which point you probably wouldn’t need to create a startup in the first place).
Designer – somebody has to prepare the mock ups of what the site will look like. Without a Graphic Designer, who knows what they’re doing you probably will not only end up with a site that looks non-professional, but you run the risk of your project being very hard to use. Reading three design books per day is one thing, but you won’t get anywhere without experience. Knowledge is one thing. The ability to adapt to various situations people gain by doing, not seeing.
The first impression of your start-up a person has is usually the design. In that crucial few seconds your visitors will decide if they want to stay for a bit or move on. If your landing page can’t catch their interest, then it doesn’t really matter if you have the most brilliant coders on the clock.
Coder – making it look nice is one thing, making it work is another. There are many programming languages out there and many ways to get you to your goal. You really need to be able to trust your programmer(s). If you have multiple coders on your project, initiate a brainstorm between them so they come up with the best solutions between themselves. You will avoid many complaints of one programmer saying about another “I could have done that better.” They just love to point this out.
Project Manager – someone has to coordinate the work of your team. In most of the cases it will be you. It helps a lot to know a thing or two about the limitations and capabilities of each technology. Without it, you might request things that are actually more harmful than helpful. Don’t be afraid to listen to your “minions”. Their input may not only help you, but will keep them feeling happy and valued.
Public Relations – most people think they can do that by themselves, most of them can’t, or do a poor job. You need a diplomatic skill set and an open mind. When on the phone or other “live” chats, you need to be quick on your feet and come up with the best answers and solutions on the spot. Too many pauses, too much “I have to consult with a colleague about that” and you’re going to lose your client or partner. At some point you will need someone who can speak with other people. There are many valuable assets that can make a big difference, the art of persuasion is high on that list.
Writers – you probably think I mean people who write articles for your website etc. While this is true, there’s more to it than that. If you need people to write articles or not depends really on the project you undertake. But you will need someone to write official documents, letters, summaries etc. It’s beneficial if your PR person can do that, it helps to keep things running more smoothly and coordinated.
If you’re thinking of pitching your idea to investors at some point, creating documents one after another will be demanded of you and you want to have those made correctly if you are to succeed getting some extra money. Not to forget, The European Union loves start-ups and they have special programs to fund those, but more on that later.
Accountant – when the money starts flowing you might want to keep track of it. Make some mistakes and your IRS counterpart will find them. Not only that, a good accountant will help you to actually get more money with the knowledge of various laws and workarounds.
If you’re natively an English speaker, then the problem is non-existent for you. But if you’re starting in a country with a different language, then you have to decide which people are your primary concern.
The home field advantage of your own country is a big help. You know the culture and customs of your own nation, which can be very helpful. It puts you in front of any “outside” projects trying to make it in your region.
But of course, you’re restricting yourself to a smaller audience. English is pretty much the basic language of the Internet now and if you choose to use it, you can get exposed to a much broader audience. But with a bigger field comes more players, so your competition will be much more fierce.
Another downside to choosing English, is that it may prove hard for you to find team members which will be able to contribute any written content to your website. Understanding the language and writing it correctly are two separate things.
This comes back a bit to the Target Audience factor. We’re going to build on it a bit more. Depending on your primary audience you should build and design your start-up accordingly. Like, you won’t put Ponies on a site selling heavy metal accessories (though it’s probably coming…). But that’s just the most simple example, the implications are really very vast. The idea is that you have to find a way to get to your audience whenever possible. Attention to the smallest details separate the wolves from the sheep.
Recently on one of my projects we implemented ClickTale , a software which tracks what your visitors do on your website and puts it into various graphical statistics and videos. I guess how useful it can be is self-explanatory. Being able to see where your visitors struggle and what parts of the website they tend not to be interested in at all is helpful in improving your business. It takes a lot of time, yes. But the data you get is invaluable.
I encourage you to try different software of the sort as well, by no means have I enough information to claim that ClickTale is the best one out there, but we like it.
Do you need funds?
Depends on who you know. Theoretically, you can get away with creating a start-up without putting any money into it, but you need to convince some people to do it with you for the promise of future gains.
Your chance at doing that depends on what you have achieved so far and who you already know. If you have friends you can ask directly, do so. Nothing really to lose, is there? If you’re short-handed though and don’t want to spend money you might try advertising your idea on various forums or places which allow you to search for specialized people for a project.
I have tried all of the above and all of the above actually work. The problem is (obviously), that you don’t really know anything about the people you get from the Internet. Nothing really stops them from walking away after a month and leaving you on ice. You don’t know how reliable or fast they are. So it’s a bit of a crap shoot.
On the other hand, if you’re willing to put up some money for the work, you have a better chance of more serious people coming forward. Don’t take it for granted though. Trial periods and work history checks are your friends. Contracts are another thing that keeps you safe.
You need a server and a domain. Although nowadays there’s so many hosting companies fighting for clients, that if you look around enough you might get a year or two of both for as little as a few cents. It may not be something you want for the long run, but it’s definitely going to be enough to get you started and see if it goes anywhere.
Can you get funds?
Another thing, which is often missed, is the fact that you can actually try to get money for your start-ups. Ever seen the Dragon’s Den TV Show? There are investors out there willing to give you money for equity in your company. More often than not, you’ll get not only money but you’ll get their help as well, which can be the real difference between success and failure.
The best part is you don’t really need your start-up working! If your idea is really good, you can pitch it as that – an idea, for which you need funds. I know of several projects which got funds without having a working website. Most of them are doing well now, some of them even very well.
Be prepared though. The investors will most probably want you to create a lot of documents and provide a lot of data during your pitch. It is a pain to create tons and tons of pages of documents, but hey, you want the money – earn it. Especially since the money we’re talking about usually starts with tens of thousands of dollars.
Where to look for your Dragons? Depends on where you live. It’s impossible for me to tell you where to go, because it will vary depending on where you live. Your investors will probably want to meet you in person a few times before they make their decision, so you probably want to look for someone fairly close to where you are.
I mentioned before that the European Union has its own programs to help you as well. You need to create a good business plan for them though. There are some people out there that specialize in writing them exactly for that purpose, some of them have a high success rate. You need to provide some financial input yourself though, if you want to ask the EU for money. So it’s your choice really if you want to go that way.
Good luck then
That would be it. Now get out there and show people what you are made off. If you don’t make it, you’ll have gained valuable experience should you ever want to try again.