People so often begin their adult life (teenage?) chasing financial wealth without even thinking about it. They believe the benefits of money automatically outweigh the costs of its accumulation. That there is no downside, and that all problems in a world of endless cash flow can be bought out.
It is certain that too much money is a better problem than not enough money. But the overriding misconceptions of wealth are simple:
We only ever have 24 hours a day.
We can only ever eat 3 meals a day.
We can only sleep in 1 bed each night.
No amount of money can change these things, or improve the relationships with those around us. It’s worth remembering this in 2011 before we embark upon a new program of attempting to garner things we might not actually want.
Have a great year, Steve.
1. Technology is easy – getting customers to pay you is outrageously difficult.
When was the last time you heard about a web startup failing because the product didn’t work? Almost never. With the greatest respect to all the hackers and engineers out there coding away, making a product do what you want is simply a function of time. Spend enough development time on it, and you can write code to do almost anything you want. Getting a customer to pay you some money for that feature you just added? That’s an entirely different proposition. The vast majority of web startups fail because they don’t find enough customers, at the right price and in enough time before they run out of cash. If we spend as much time on marketing your startup as you do on writing and shipping your code, and we just might beat the odds.
2. Customers can always choose to do nothing
When pitching a prospect we are generally trying to convince them to do one of two things:
(i) Leave a competitor and join you
(ii) Stop doing nothing about their pain problem and join you
Who knew that getting them to leave a competitor was often easier than getting them to stop doing nothing? At least if they are using a competitor they recognise that they have a problem that needs solving! The truth is, many prospects are indecisive, stagnant, glacial, apathetic, unwilling, and unmotivated. Demonstrating your product and then asking for the sale is just as likely to be met with a yawn and a scratch of the arse as it is with a chequebook. If you understand how difficult the process is, then there is a good chance you will approach it with the right amount of preparation and effort.
3. Financial models are fantasy
Their is one good reason to construct a financial model prior to having any real customer data. Do it to prove to yourself that the fundamentals of your model will produce a profitable business over time. Think of it as a sanity check. Once you are happy that the model works in theory, throw the spreadsheet away. Never look at it again, and for christ sake don’t go out and try and raise investment funds off the back of it (guilty as charged!). Just launch your product and get as much real live data as you can. Months later you can giggle about how wrong your projections were, but at least you won’t be making life altering decisions based on nonsense.
4. There is no replacement for quality user testing
User testing pays for itself many times over. This doesn’t mean getting your mates over to play with your creation in return for a 6 pack. It means getting real life customers/strangers to use your product while you watch. True story. Our startup is an online event registration solution that allows customers to sell tickets and accept registrations for any sized event. Three months after launch, we sat and watched via web cam while a Canadian tester spent 15 MINUTES just trying to create an account. In one of our releases, we had cannily decided not to display a “register button” to anyone using Internet Explorer. No-one using this browser could get in and use our product, and it had been that way for over a week. He eventually managed to get in, but man was he pissed!
What else do you wish you had known before you did your own web startup?
Post by Scott Handsaker founder of Eventarc
I love the story of James Podsiadly for one reason. He has broken convention and in doing so, will change peoples perception forever.
For the uninitiated, James managed to break into the AFL ranks for the first time at the age of 28. Playing his first game for Geelong in season 2010. In football terms he’s a senior citizen. In fact, most people start retiring around that vintage. But James wasn’t fortunate enough to get picked to play at AFL level at a young age. Geelong is his third club, and he has been starring this year.
He’s proven that age is relative to development.
He’s proven that age is relative to opportunity.
He’s proven that desire can be translated into results.
He’s proven that great work eventually gets noticed.
He’s proven that sometimes people / companies / clubs get it wrong.
He’s proven that staying the course over a a long period is where results live.
So far in the year 2010, he’s the most inspiring person I’ve come across. Before we make an assessment of someone’s worth, we should think of James. He’s also who we should remember when we think of quitting, or we’re overlooked in whatever we are doing.
Startup Blog says: Thankyou James.
I had this discussion yesterday. I walked past a hole in the wall cafe. (Tiny cafe which serves take away and stand up coffee in inner city area)
Friend: Wasn’t Joey going to open a business like that?
Me: Yeh, I remember him talking about it before I had even seen one of these in the city.
Friend: What happened to it?
Me: I don’t know, I guess he just didn’t get around to it in the end. Got distracted.
Friend: That’s a shame, looks like a good little business model. What’s he doing now?
Me: He’s in the same job.
Friend: Oh. Ok.
We keep walking …
Don’t be Joey. It at least try and fail. The old job will be waiting for you if you have to return.
Small tip for startups for today.
Trim the ‘to do’ list and actually deliver on something.
All to often we get caught up in ‘options’ and priorities and a simple solution is to have 1 priority, and 1 thing to do.
Then do it.
Take your to do list and put everything which isn’t number one and file it in a digital format somewhere to return to later. This way you’ll ensure that the ideas and projects aren’t lost.
I know, you know this. I know you’ve heard this idea before…..
But if you’ve forgotten it, or you don’t do it – do you really know it?