Archive for the ‘What not to do’ Category

Top 5 Web 2.0 startup pitfalls

1) A site that totally dependent on user data to succeed – Most sites die because they get no user adoption. However, user adoption is dependent on other users being present and creating enough content for it to be useful for new users to join. It’s kind of a Catch-22 that you need users to get other users but the initial users have no reason to contribute. A good way would be to start off with something and then allow users to build on it. Spock is doing well on this model.

2) Mashups – Mashups are very popular with Web 2.0, however a lot of them may not be useful at all. They also severely limit the number of users to the people that use the services that were mashed up.

3) Unnecessary “tags” and Web 2.0 look – Some sites create unnecessary Web 2.0 like functionality because everyone else is doing it even if it does not benefit users. Also, the look and feel of the site is very Web 2.0 like and does not work for their visitor segment.

4) The same idea with a “twist” – This is the pitfall where people create just another video site or just another photo site with a “twist”. That twist is sometimes to insignificant for users to shift to this new site.

5) Solving problems for too small of a constituency – A lot of applications get great buzz from the geek community but that community is very small and the application is sometimes not designed well for non-techies to understand and use it.

Top 5 pitfalls when evaluating a startup idea

I was at a meetup last night with several new entrepreneurs that were working on their ideas. When I asked them questions on their ideas, the answers I got did not sound too satisfactory. Here are the common pitfalls when choosing an idea that may hopefully help some of you.

1) Not knowing the market size – sometimes we jump into ideas that apply to only a subsection of people. Not knowing how big the potential market for the idea is is a big problem with several entrepreneurs.

2) Are you trying to solve a problem that does not exist? – In other words, Is this a real problem ? I met a founder that was trying to solve a problem related to travel. His take was that there were a few companies that are trying but no one has really succeeded. Any my take was – is this really a problem ? Has there been enough research to determine if this is something that needs an online solution ?

3) Over-estimating what you can do yourself – I met a few people that are going at it on their own. Great for them, but there is only this far that a single person can go.

4) Not being able to present the idea in clear, concise, non-technical language – If you cannot successfully explain your idea to your mom, then you need to rehearse your speel.

5) An idea in itself is of no use at all – I met several people that had “ideas” for a startup. Everyone has ideas. Doing well is about who can execute them. The question once you have the idea would be – do you have what it takes to execute it and the flexibility to iterate as the market and your users demand ?

Here is a good post from an entrepreneur on his method to generate ideas.

Top 33 things NOT to do in your internet startup

Again, in no random order – however all great tips to make your startup fail.

1) Do not hire relatives if you are too family oriented. You will have a hard time staying impartial and will drive other employees nuts.

2) Do not hire unless you really have to.

3) Do not look for professional investment unless you have at-least a working prototype in place and more likely wait till you really really need it and have exhausted all your other resources.

4) Do not move to Silicon valley just because every other startup is doing so. It has it’s pros and cons – define what you need and make a judgement based on that.

5) Do not hire too many “managerial” type people too soon (if ever).

6) Do not tolerate anyone that indulges in any kind of office politics. Clean up the mess asap.

7) Do not rush to hire an offshore team unless you have experience in building one up successfully before.

8) Do not wait to fix hiring mistakes. People do not change, once you find that someone does not fit in, make a change immediately.

9) Don’t wait too long to release your product. Iterate quickly.

10) Do not let the entrepreneurial spirit die down in your company even as you grow big.

11) Do not hire a sales team before you have a completed product.

12) Do not encourage the use of email for small communication, let people talk it out and resolve things quickly.

13) Do not worry too much about failure.

14) Do not discount suggestions from your key employees.

15) Don’t rush to patent anything unless you have market feedback that it is useful.

16) Don’t write a 50 page business plan unless you plan to use each and every word to help you build the business.

17) Do not ever assume that things will happen unless you take the effort to follow up.

18) Do not get discouraged when you get a “NO” from any one (investors, journalists, employees, analysts, customers etc.)

19) Do not buy expensive furniture – or for that matter expensive anything unless you can demonstrate a clear ROI for having it.

20) Do not hire MBA’s for just their degree.

21) Do not eat junk food while you’re up late at night working on your startup.

22) Do not invest in expensive software if a free version can meet the need at least initially. Example: Do not get Webex if Zoho meeting can do the deal.

23) Do not start a startup just for the sole aim of making money.

24) Do not loose focus that your business needs to make money to survive.

25) Do not focus on building partnerships with large companies at least initially unless you have a good runway and enough cash to last you till you can get the deal done.

26) Do not hire people that cannot communicate well.

27) Do not assume how customers will use your product unless you’ve tested it with a significant size to back that assumption.

28) Do not neglect your family in this process.

29) Do not discourage people from trying out new ways to solve problems.

30) Do not take too long to make a decision, be ready to change direction quickly.

31) Do not eat alone, establish a relationship with the people you work with.

32) Do not assume what worked for you at the large company you worked for 5 years ago will work here at your startup as well.

33) Do not loose sight of the big picture and get caught up in the small things.