I've started and run two high-tech businesses (the first one was barely successful; the current Web-centric one is turning out to be very successful). I've come to believe that there are two critical questions that you must be able to answer before you can dive in:
How do you find your customers? Since you're starting a Web-based business, it is tempting to think of this as "how will our customers find us?" (ie, 'I need higher rankings in the search engines!'), but this is not the same. You need a coherent, complete, and sustainable strategy for generating a steady stream of new, paying customers. The inputs to this process must be under your control, so that you can scale them up (or down) as your business demands.
How do you get paid? You need to be able to articulate what exactly you will be paid for, and by whom. You also need a specific pricing model, as well as how customers will pay you (ie, credit cards, POs, pay in advance of services).
If you can answer these two questions, then you may have the 'marketing' part of your business plan under control. Try explaining it to a 60+ -year-old executive business veteran from some other industry and see if they 'get it.'
Here are the other one-liners that I'm carrying around in my head for when I start my next business:
You need real capital. Like maybe $1 million in the company bank account, and another million standing by. An underfunded business will fail because it won't be able to spend money fast enough to get to critical mass.
If you don't have capital, this is just a hobby, and that's OK.
Have a partner; there's a lot of work to do.
Make a plan for dealing with the fact that you'll never see your significant other. Knock off work at 5 PM every Saturday, and go out for a date. (This 'date' lasts until AFTER you've had coffee Sunday morning.)
Make 'shareholder' agreements the same day you form the business. What happens if a major shareholder dies? By default, their spouse gets full voting control of their stock...is that what you want? Be deliberate.
Keep your fixed costs (rent, internet bills) low.
Some particular thing makes your business special; offload and outsource everything else. Use ADP for payroll. Use an outside design firm. Use Quickbooks or Peachtree for accounting, whatever your accountant recommends. Find a lawyer you can talk to, preferably one who's a bit of geek. Ditto a patent attorney.
If you're going to be > 10 people, the first person to hire is the person who will hire the rest. Hire someone who's 'built a team' before.
Hire veterans of other real-world startups, not newbies excited about the idea of startups. The vets understand, and have wisdom to offer (doesn't matter whether their old ventures succeded or failed).
"You will hit your sales projections -- a year later than you planned." -Sam Farber, founder of COPCO and OXO/Good Grips. Did I mention that you need real capital?
As for technology issues, start small, and favor the maintenance-free (for you) options. In business terms, it doesn't take that long to get more bandwidth, or a faster server, or whatever.
Your time is precious -- be very, very careful how you invest it.
Slashdot Mirror
Anyone know of this technique being used today?
The Closed-Captioning FAQ seems to think that using speech recognition to generate text from broadcast audio "isn't there yet" technology-wise.
- How do you find your customers?
- How do you get paid?
If you can answer these two questions, then you may have the 'marketing' part of your business plan under control. Try explaining it to a 60+ -year-old executive business veteran from some other industry and see if they 'get it.'Since you're starting a Web-based business, it is tempting to think of this as "how will our customers find us?" (ie, 'I need higher rankings in the search engines!'), but this is not the same. You need a coherent, complete, and sustainable strategy for generating a steady stream of new, paying customers. The inputs to this process must be under your control, so that you can scale them up (or down) as your business demands.
You need to be able to articulate what exactly you will be paid for, and by whom. You also need a specific pricing model, as well as how customers will pay you (ie, credit cards, POs, pay in advance of services).
Here are the other one-liners that I'm carrying around in my head for when I start my next business:
- You need real capital.
- If you don't have capital, this is just a hobby, and that's OK.
- Have a partner; there's a lot of work to do.
- Make a plan for dealing with the fact that you'll never see your significant other.
- Make 'shareholder' agreements the same day you form the business.
- Keep your fixed costs (rent, internet bills) low.
- Some particular thing makes your business special; offload and outsource everything else.
- Buy every relevant book from NOLO Press, everything written by Guy Kawasaki, and For Entrepeneurs Only. Read all.
- If you're going to be > 10 people, the first person to hire is the person who will hire the rest.
- Hire veterans of other real-world startups, not newbies excited about the idea of startups.
- "You will hit your sales projections -- a year later than you planned." -Sam Farber, founder of COPCO and OXO/Good Grips.
As for technology issues, start small, and favor the maintenance-free (for you) options. In business terms, it doesn't take that long to get more bandwidth, or a faster server, or whatever.Like maybe $1 million in the company bank account, and another million standing by. An underfunded business will fail because it won't be able to spend money fast enough to get to critical mass.
Knock off work at 5 PM every Saturday, and go out for a date. (This 'date' lasts until AFTER you've had coffee Sunday morning.)
What happens if a major shareholder dies? By default, their spouse gets full voting control of their stock...is that what you want? Be deliberate.
Use ADP for payroll.
Use an outside design firm.
Use Quickbooks or Peachtree for accounting, whatever your accountant recommends.
Find a lawyer you can talk to, preferably one who's a bit of geek.
Ditto a patent attorney.
Hire someone who's 'built a team' before.
The vets understand, and have wisdom to offer (doesn't matter whether their old ventures succeded or failed).
Did I mention that you need real capital?
Your time is precious -- be very, very careful how you invest it.
-Mark Kriegsman
Founder, ClearWay Technologies