Ways to Minimize the Failure of a Startup

September 7, 2010 at 8:51 am
filed under Starting Up
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After having started up a company, I realized a couple of core values to watch out for in able to minimize the failure of starting up your company. One must keep in mind that it’s not the positive features that your product has that will make it successful. It’s really about avoiding the things that’ll make it fail. Of course, we’re talking about the basic big picture/direction here.

1. Do not try to invent something
Inventing a new way to solve an existing problem is fine, but just don’t try to create a brand new product. The reason is because it’s not very easy to educate people, and unless if you have a few million dollars lying around to market and to educate your customers, do NOT try to create a novel product. Breakthrough and popular innovations must come from baby steps, kind of like our evolution of Motorola Startac to Apple iPhone now. I’m not saying that it’s impossible to invent something as relatively novel as Twitter or Foursquare, but I’m just saying you need to look at it this way: Try to dramatically enhance or “reinvent” an existing product or platform such that you fix the problems that the existing products don’t. Whether or not something is an invention is very trivial. I think the iPhone is an improvement, but not an invention, though many people may argue that it IS an invention. I think it just changed the way we interact with our phones, and it’s quite awesome at that. Oh, and of course, you can invent the Time Machine or a website that miraculously cures diabetes, then I’ll totally take back what I just said.

2. Does your product fix existing problems (or is it super fun?: solves boredom) and is it worthy of being solved?
This is very trivial because almost all products solve some sort of problem. The question is if your product fixes problems that are big enough for people to want them to be fixed. Google fixes the problem of inefficiency in the past search engines (more like directories). Some people might think, okay, Swagly is going to solve the problem of people not being able to identify products they see in pictures or something. However, the problem itself isn’t a big problem. Being able to identify those products won’t necessarily make anyone’s life easier. Many people might wonder, but they can visually take down the style and maybe find it somewhere else with very little trouble.

3. Build on established platforms
Try to create your product on establishes platforms so it makes it easier to spread your product. What I am literally saying is: Build your product on Facebook, Apple App Store, Twitter, and other platforms where your product can be spread around socially.

4. Not making money as the first objective
This is a hard one. I have heard many people say: “Next time I start my business I will need to have a revenue structure.” This statement itself is right AND wrong. It’s right, your product must have a product structure, but it’s wrong in the sense that you must not have revenue in mind when you’re developing your product. The only thing you should be thinking in your head is: How to make users come to use it, love it, and keep coming back. I have seen too many companies try to figure out ways to make money even before they have any users. Look at current successful companies out there. Google, Facebook, Twitter, Craigslist, Foursquare, etc. Of course, there are other services where it’s subscription based and you can get a revenue structure going immediately. Sure, but I think that’s just a very small percentage of them. Therefore, I think cash flow must come, but just the matter of when.

5. Start with a very small and fast prototype first
This has been repeated over and over again, but try to develop your product in the shortest time possible, acquire the early adopters, and slowly tune your product. I made the mistake in trying to squeeze too many features at once into the product, and I lost time, money, and users. You just want your product to do 1 or 2 things at once, and you have to minimize the procedures and understanding as much as you can, since people are slowly losing more and more concentration as the internet is getting more and more distracting.

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