03 Dec The Startup Chasm
Currently I am in the middle of my own start-up, called “Take It National“. And apart from my own business, I am quite often chatting with others about their start-ups, or just having conversations with people about start-ups in general. Now that I am in the middle of my own, and not just an outsider looking in, I am experiencing some new feelings and empathy for those taking this journey, that I would have not really taken too seriously. So these are just some of my recent thoughts about start-ups and small to medium sized Internet companies, good and bad, for those who are already in the know or just want to have something to think about. (I know when you work for a large corporation, often the lament is to think you should run your own business and do your own thing. Acting on going on your own is only for the strong-hearted, seriously!) So these paragraphs below use big company life vs. small company life and some of the start-up ups and downs as discussion points.
Freedom Pays Less But You Are Happier
Well, lets start out by saying quite often freedom means no pay (at first). I am noticing that while I am, of course, feeling the stress of getting my business off the ground, I am generally less stressed than at a big corporate job. Who knows why, but I am much happier in my own business. I would often get all stressed out and unhappy about having to be at a meeting at 10:00 AM (a time most software developers abhor), to discuss very little with people you really don’t want to be in the room with. In fact the lack of getting anything done was downright pissing me off in my corporate life. It is a fact of life in corporate life. Accomplishing something everyday is a happier way to go for me. I will of course have to get back to big company life one day where we hang around the coffee room, but for now I have to get things done!
Freedom Is Not Really Freedom
Just a reminder point that freedom is not really freedom. This counter point is just the reaffirmation that we all have to report to someone and a start-up person has to face the music, every day.
A small tinge of self-doubt is apparently always there in being an entrepreneur who was an ex-corporate person. I was telling somebody recently that my hands start typing Indeed.com, when I start to feel the burn of not having revenue flowing in my business yet… You can liken this to the experience of giving a major speech to a very large audience. Everybody feels the nerves of a speech and everybody feels the pull of going back to a soft cushy company job. But like a speech, you have to just make sure the audience doesn’t really know you are nervous, and like in “You Got To Be Believed To Be Heard” by Bart, you just have to make sure the audience does not know you are nervous. Believability is everything. You have to convince your mind you are on the right path, and quite often you are.
Another reality check with start-ups is people. These people, who, if they took the time to read this blog post, are the people you do work with on a regular basis. In a start-up you are constrained for time and money, and often because you don’t have the big money, you have to take what you can get in certain areas, and often these people lack the training that people have at big companies. Not that they all suck, but you have to just accept the fact that they are not going to be perfect. I am talking your partners, your employees, your customers, everybody sucks. Sorry, but get over it and just let them do what they got to do (Even though you feel like doing it yourself…)
You Thought You Knew Something But You Didn’t
I love this article that came out in the late 90s about a Stanford class of young ladies who made thousands picking stocks… Gailbraith was asked about this group and he basically said they were lucky. Those successful the first time and even sometimes both the first and second time often are unlucky the third time. Luck still has something to do with success and nobody has a perfect record in the end (I know a few, and they were extremely lucky). Have the attitude that you don’t know everything and do not get emotionally attached to your ideas! Have the attitude that you can flex to survive or pull the plug and take a parachute out. Don’t go down with the ship! If you see the hurricane ahead get out of the way. You know what happened to the WindJammer Cruise Ship that defied common knowledge and attempted to sail through a hurricane from the Yucatan to Miami years ago. The boat is gone without a trace along with the crew…
Mimicking Has Its Limits
There is this mimicking business theory I am understanding and adhering to more and more, especially after being introduced to the concept of your story by David Tyreman and World Famous “Branding Experts”. You got to be yourself. You have to develop your own brand and niche. Every time some company makes it big, either Yahoo, Google, Twitter, Meetup, Facebook, Digg, etc, you see a sea of mimicking companies. What else are thousands of programmers to do, but make a Twitter Copy… What they did not understand is copy-cats have their limitations. If you are going to be the next Twitter, just quit now! You have to be your own company and your own thing. Being the same as others is not a winning strategy, with a few minor exceptions. Those exceptions have to do with commodity markets, like 4 gas stations on a corner, where nobody can identify the brand… Other than that, your web start-up needs to be unique and have its own story, or it will fail. It may just fail as well if you are a niche and have your own story, so this can’t be guaranteed, but it is a start towards success. Be yourself.
It’s The Asset Value, Stupid!
Online start-ups need to be accessed and valued for their asset value and not revenue. This doesn’t mean I believe in advertising models… I do however believe in the following as assets:
Monthly Unique Visitors
Number of Valid Email Addresses
Number of Online Members
Patents, Trademarks, etc.
Resources Such As People (Networks, Contacts)
Building And Physical Stuff
Revenue & Net Income (of course)
In an online start-up it may never be about revenue or net income if your membership is enormous. The valuation is all about critical mass. It is counter-intuitive to old time accounting, but this is where the value is, at least in selling your business off.