Over the past three weeks, we’ve looked at a number of entrepreneurs who have jumped into the technology startup world.
From car buying to photo sharing, the services they’ve founded tended to have just one thing in common: None of them would be possible without the cheap, easy communication platform known as the Web.
But for those looking to join the ranks of Internet startups, there are some lessons to be learned from today’s Web entrepreneurs, who, in many cases, had to experience repeated failure before finding a tech business that worked. Among those pieces of advice:
Brace for some spectacular screw-ups
Tech entrepreneurs often put a lot of effort into ideas that ultimately prove untenable.
The ones who succeed, however, tend to be the ones who try again after the first two or three or four failures.
The good news is that the tech startup model tends to be, by small business standards, relatively cheap. A number of the hottest startups out there right now were founded on just a few thousand dollars of initial cash.
Additionally, tech businesses tend to be at least somewhat salvageable. Your pet photo-sharing site may not have worked out, but that doesn’t mean you can’t reuse some of the same programming code in your baby photo-sharing site.
Worry about the user experience first
There has been a trend in the tech world over the past few years, exemplified best by the likes of Facebook and Twitter, that startups should focus first and foremost on building as large a user base as possible. Create a following, the theory goes, and revenues will follow.
While not all startups adhere to the strategy – plenty of young entrepreneurs are interested in generating revenue as quickly as possible, in large part because they often fund the businesses with their own money – virtually all of them tend to try to create a compelling customer experience from the get-go.
As Google’s executives like to point out, competition on the Web is just a mouse click away. You may have a great idea for a startup, but it’s more than likely someone else out there is working on a competing service – and there’s nothing stopping users from going to their site instead of yours.
There’s plenty of help out there
Even though the 2008 global economic slump caused a lot of investors to tighten their purse strings, there are arguably more resources available to startup founders today than at any time other than at the height of the dot-com boom.
There are incubation chambers that offer young entrepreneurs office resources, advice and mentoring (for example, Ryerson University’s Digital Media Zone in Toronto or the University of Waterloo’s VeloCity).
There are services that match startups with potential investors ( AngelList).
There are social and networking events ( DemoCamp).
And, of course, there are traditional venture capital firms and angel investors (too numerous to mention).
Even though most investors are writing smaller cheques today than they did a decade ago, the number of helping hands for startups has skyrocketed.
At some point, you’ll have to go all-in
Most of the startups we spoke to for this series (and generally) describe a moment when it simply became too much work to try to balance working a day job and building a new business.
Sometimes, that moment comes before the new business has secured much funding, making for a frightening leap into the unknown.
The good news is that just about every traditional small-business entrepreneur will face the same challenge – only tech startups tend not to have the additional worry of paying for things like retail space and expensive equipment.
Still, some startup founders were close to cleaning out their bank accounts entirely before their businesses finally took off, and others weren’t even that lucky.
The tech startup world may look more alluring today than it has in a decade, but it’s still not for the faint of heart.
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