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Gold Rush Of Startups

Gold Rush Of Startups

Today it is very fashionable to do startups. In some way it’s like a gold rush. A huge number of people having read the finished algorithms want to open their own startup.

My acquaintances and friends are turning to me two times every six months (previously – every month) and asking me for help when they have some obsessed ideas. They only have one thing in mind – “I have an idea, so you should help me with this project (you’ll draw it, mark up it, program it, promote it, etc.) and you’ll get 50% of the profit”. In response to my questions about the strategy, competitors in the market, about the expected return, risk management – I hear nothing but silence. Therefore, people write me less.

So, that is why I strongly recommend to anyone who makes his start-up or just going to, to take into account several issues.

Startup is a kind of business

Every business is aimed at receiving a profit from the results of its operations. If you do not have this – you are doing charity work. Therefore, the sooner you’ll start thinking about the question “how are we going to earn some money on this thing?”, the better.

Every business is created by man

This means you must be willing to become a professional businessman. There is a view that it requires skills in three areas: sales, administration and finance. In addition to the related technical (we’re still in IT), legal, accounting spheres and so on. Moreover, look at any example of companys which are ruled and developed by one person (Apple – Jobs, Microsoft – Gates, in the past, Google – Brin, Facebook – Zuckerberg, etc.). Please note that according to statistics only about 4% of people have a talent to be an entrepreneur. Are you sure you want to develop your life in this direction (where you’ll have to compensate the lack of talent with a really hard non-stop work during 7 days, for the first two or three years), or you already have some skills and experience in programming, management or something else? Life is given only once.

Do you know how to manage risks?

At one of the start-up meetings, I asked the team – “What will you do if investor leaves you, and the programming supervisor will just slip away?” I didn’t receive any answer. It is essential to consider the risks and work out a reliable protection from them, for you to be ready for troubles, and if they happen, you’ll know what to do, not wasting time on being worried.

How effectively do you work?

Most of the start-ups do not require investment at the initial stage. Moreover, it doesn’t require endless presentations, parties to start-up meetings, and so on. Anything that doesn’t apply to the development of the project is unnecessary expenditure of time – and this is the only resource that can’t be restored.

You can turn uncertainty into certainty and quality into quantity?

The first is to be able to see a concrete implementation of the project from an idea and organize people to achieve results. It is also necessary to see the strategy, because it’s not that hard to cut one’s way into the leaders, as to hold leadership in a situation where competitors will grow by leaps and bounds (in fact, the ability to think strategically, to see how your market will change in the future). The second is the ability to calculate any rate, for example, the performance of every programmer in money, or to estimate the approximate profit (several scenarios – from excellent to very poor) in figures in 3 months after launch, and a year later.

Conclusion

So if you have an idea to earn millions on a clone of already existing service, please, ask yourself these questions before you’ll start annoying programmers and project managers you are familiar with, promising them the money that you cannot even count? If you have read this and realized that you are close in spirit to the idea of your own business, but not the startup, then I wish you good luck!

  • Cord,
  • June 14, 2011

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