This is the second post of an ongoing blog series called How to Start an Internet Company That Will Be Noticed: A Framework. The series aims to use an online marketing perspective to create a framework for starting a successful internet company.
Starting a company is a lot like streaking. Coming up with the idea and brainstorming the execution is exciting but performing the action is difficult and rarely done well.
I, like a lot of people, have had my mind hijacked by a new business idea that fools me into believing I came up with the next big thing. Unfortunately, most of these plans ended in complete failure. As soon as I started to make progress I would inevitably run into an unforeseen problem that would, like a bad streaking plan, leave me embarrassed and out of breath.
Fueled by my failures, I have used my more successful business and internet marketing experiences to create the following checklist. My hope is that this list will prevent you from repeating my mistakes. Good Luck!
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Come up with an idea that solves a marketable problem - Many web business ideas I have followed (or pursued) have failed because their benefit was not marketable. Before checking this box I now ask myself the following questions: Can I explain this idea in a language that makes sense to applicable people? Does the solution sound plausible to someone who hasn't tried it? Am I trying to sell a solution that people can get for free without a lot of additional effort?.gif){kind=small}
Determine what kind of people will want to visit the site - I have seen many developers fall into the trap of solving a problem in a way that is optimal for them but not for users as a whole. To avoid this pitfall, it is important to understand your prospective users. For now, it is okay to simply outline the persona of a potential user. The next segment of this series will go in depth on answering this question. To see an expert example of this, look up Max Levchin and his work with Slide. He is one of the most mathematical and technical focused leaders in the internet industry and his current company deals almost exclusively with glittery slideshows for teenagers..gif){kind=small}
Identify and obsess over what tasks users will be able to accomplish via the product or service - It is practically impossible to execute an idea without feature creep (adding more and more new features as a plan expands). This makes it painfully important to resist the urge to expand and instead focus on the primary objective. I find it best to write down all of my expansion ideas in a notebook but not act on them until after the primary objective is done. Keep asking yourself what will make users want to recommend this service/product to their friends. This is the key to viral marketing.Secure an "unfair" advantage over your competition - If you really do have the next big idea, be prepared for a lot of copycat competition. The best way to prepare yourself is by securing an unfair advantage. Sometimes this is by finding a more influential user-base (Facebook), other times this is by harnessing an untapped technology (YouTube), and more often than not, this takes the form of hiring superior staff. (Google, Wufoo, Twitter, 37 Signals) Remember, first comers' advantage is important, but without something special it is not enough to carry your business.Identify two degrees of difference - Far too often people create clone companies that don’t offer anything new. For all of my ideas, I try to identify two degrees of difference. For example, if you are creating the “YouTube of refrigerator magnets,” you could consider the refrigerator magnets as one degree of difference (from YouTube). Expand on this by adding a second degree of difference. This could take the form of “YouTube of refrigerator magnets based on a fremium business model.” Two degrees of difference helps promote diversity and innovation which helps build a stronger and more marketable product/service.Figure out how to make your content build links - Search Engine Optimizers roughly agree that 70% of ranking metrics are directly related to links. This means that optimizing your business's link-worthiness is vitally important. You must decide early on what type of link-worthy content you will initially focus on. Is your content, service or product going to be: Practical, Interesting, Funny, a News Source, a Time Saver or something else? Secondly, it is important to make sure that the users that you plan on targeting are capable of giving links. The easiest link producing users to target are webmasters and bloggers. If applicable, try to attract their attention.Determine who will write your unique content - The reality is that search engines are very limited in the type of content that they can index well. Text is the currency of the internet. Don’t be fooled into believing that you can be an exception. Who are you going to get to write? Are they a talented writer? Do they LOVE writing? Can you get them under contract? What will you do to avoid fluff? You should answer all of these if you want to show up highly ranked in search engines.Ask yourself how will this website do if it only has 10/100/1000 users - There are several hurdles your idea will need to overcome. To prepare for this I have learned to ask myself the following questions: Does the idea rely on the network effect? If so, how will it be overcome? Can a community be gleaned from a different website? Why are complete strangers going to spend their time on this new website? It helps to look at the big picture and imagine why a user will pick this new website over the millions of other options.Throw away the idea that you will succeed because you’re an exception - It is very unlikely that you are the next Bill Gates/Steve Jobs/Mark Zuckerberg/Peter Thiel. These people did not start their companies believing they were exceptions. Instead, they dedicated all of their thoughts and efforts to proving it. Cast a wide net, be flexible and work harder than your competition. These are the real ways to become successful.I look forward to hearing your opinions and expertise in the comments. As always, e-mail me or send me a private message if you have any suggestions on how I can make my posts more useful. If that's not your style, feel free to contact me on Twitter (DannyDover) and/or Linkedin (Danny Dover). Thanks!
P.S. Thanks to Jacob Morris for some of the inspiration for this post!
Excellent post Danny, I also think that a large proportion of it could equally be applied to existing businesses which do well offline, but are struggling to make the leap online.
I like the concept. Also, I think that you should change the first point to "solves a remarkable problem," even if you can explain it well that doesn't mean anyone will connect with it. I think that will support point two better.
Like this:
1.) Solve a recognizable, remarkable problem
2.) Speak in the language of your intended users
Late to the party (busy) But I do want to add my thumbs up to Danny.
Years ago I was attending college classes on Business Management because I had a business making good money but I didn't know a thing about running one.
I always tell people trying to come up with a business idea (believe it or not it is a subject that comes up quite often) That you don't have to come up with something never seen before. You just have see something lacking in an existing product or service that you could improve on.
The biggest stumbling block I have found over the years is (in my opinion) over analysis. Yes, it is important to go over your idea with people that have been where you want to head, (successful business owners)and listen to what they have to say (take critical advice) but don't try to think up every possible problem and solve all the hypothetical possibilities before you ever start.
Problems pop up in every business. Some just can't be predicted, but working through those challenges is what makes a success.
The only way to insure failure is to never start. Using your list will give anyone who honestly goes through it a huge head start. You make Great points. But I still say they need to eventually Start Something. They can always improve on it as they go along.
As Always, just my take. And Danny is still the King of Great Lists!!!
Jeff,
Helpful and well thoughtout advice as always. I really appreciate hearing the thoughts of someone as expereinced in business as you are. It lets me know I am doing something right.
Let me know if I start heading in the wrong direction. I am one to overthink things :-)
If I could I would give extra thumbs for this...
As a young person when streaking was popular, (before jogging outfits were invented) I can say with conviction that even with considerable planning, being embarrassed and out of breath was inevitable. But maybe, like Frank the Tank in Old School, I was just running when it was really cold or with inadequate equipment. ;)
Danny, great advice for any business.
I personally, need to take a step back when ideating about online businesses to create. I'm victim of owning one too many domains based on lack of attention to a few, if not many, of the points above.
I'll be sure to keep the points in this post in mind the next time my mind starts to wander about the potential of a business idea.
Great stuff (as usual) Danny. Particularly like the "two degrees" bit. I often think people base everything off one differentiator and find it's either not enough or the competition quickly catches up. An existing site will often have an "unfair advantage" - their own user base.
I already do something similar to this, though it mostly just boils down to asking my wife if she thinks it would do well. It helps being married to a woman with both a psychology and an education degree.
I love this checklist though, because it turns it from a "Will it be a good idea" to "Will it succeed?"
Any pointers from your internal list? (Maybe, I should ask your wife instead)
I have seen many developers fall into the trap of solving a problem in a way that is optimal for them but not for users
That is so TRUE!!!!!! ))))))))) I caught myself doing this lots of times, whereas what we really need to do instead is to put ourselves into our visitors' shoes and think in simple clear terms!
The key is that site should plainly convey the idea of what is being offered and what needs of the targeted audience it meets. And here web usability is of primary importance too, as even if you have something great to sell, if your visitors don't get info they need or can't figure out how quickly and painlessly to buy it - the whole thing is bound to fail.
Anyway, great article Dan, thanks for sharing!
Good post, Danny.
Straight to the point with direct list of items every marketer should have in hand.
When it comes to business ideas, I always allow myself to be surrounded by a few types of people - My CFO, my finance/accounting staff and corporate consultants who are not marketers.
They offer me solid, straight to the point corporate advice that makes me think again and again although I know this point is good for SEO, Internet marketing and so forth. If there's any chance anyone can get these 'devils' to strike you down, it's a good learning process.
One thing I learnt the hard way last time is that, building/starting/financing a business is not as easy as it sounds, at all.
Anyway, excellent points you made up there, especially the Identify Two Degrees of Difference. People in Japan have been trendsetters all these while, Malaysians only follow. =(
Danny, I just had a discussion with some people about a new business idea this morning. It was great to read this and gave me some things to think about.
Great post.
Great to hear! Best of luck and let me know if you learn anything worth sharing :-)
This is a really incredible post. Allready forwarded it!!
This is an incredibly useful, amazing and clear list!
Great job Danny!
Excellent post Danny.
For those of us who tend to take off like a "Bull out of the gate" whenever we get a great business idea...your post certianly gives us grounds to pause.....----.....take a breath......---.....and insure we have considered all steps in both the marketing and business.
I've printed out both articles, begun to action and eagerly await your next post.
Kel,
You and me both! That is the reason I came up with this checklist.
I appreciate your enthusasim and should have the next post early next week (if not sooner)
Danny
Very timely post Danny! I was just discussing new internet business ideas this morning, and this is a very thoughtful, well-written, and handy checklist. Thanks!
Following these steps could have prevented me from reading a lot of useless press releases in the last year. Most of them wouldn't have come past point one if they didn't have a (more or less stupid) VC giving them too much money.
I especially like your comparison with streaking - however I doubt that there's much brainstorming involved :-)
Fantastic post, will be printed off as soon as I get home, and I will be going through my latest website with a fine tooth comb to meet some of those points, and nice to see that I have done most of them already :)
Glad to hear you are be actionable with this post. I wrote it for just that reason.
Good luck and let us know if anything comes to mind when you start implemeting this list.
Great post Danny! Lots of things to consider that I think many often overlook.
I'm working on a project consulting a new venture group right now and one thing I keep asking them is, what are you bringing to the table that isn't already being done, and how are you doing it better than "x,y and z".
While differentiation and improving on an existing idea aren't the only things to think about, I think that a good idea isn't always enough. What are you bringing to the table, and what can you offer that isn't being offered currently are questions that aren't necessarily asked often enough 'before hand'. Its super important to think about the unfair advantage that you can create that ultimately results in a barrier to entry!
With that line of thinking, I would gladly hire you.
The concept that coming up with the idea is the easy part was one of the hardest parts for me to learn. Paul Graham is able to explain this better than me in this essay
Hire away :)
That was a great essay. Lots of great material in there. I thought the part about the friends/collaboration and the extremely small percentage of women in start-ups incredibly interesting.
One of my favorite parts though:
That unacceptance that things are impossible is critical! Sometimes they are, but most times I think they're not. Just takes a particular perspective to uncover the solutiion.
I'm living this now and I'm scared out of my mind! Thank you for the reality check.
For all of those who are now the masters. remember we who now first uncover SEO, AdWords et al.
Nice 1.
The best advice always seems obvious in retrospect. A lot of this may seem obvious, but even when i look down my client list, I see how few are actually able to meet even half of these criteria. That may be because they have "old" websites that grew organically.
Maybe its a sign of a "mature" market. We can build from solid foundation of knowledge, rather than having to learn as we go along.
So we now go from organic content growth to mechanic content growth. Seems creepy, but Google will have its way!
The best part of this list is that you can fail quickly - ie discard bad ideas before they waste your time. Ill be applying these to my next flights of fancy tho!
I think you hit perfectly on that makes Google so brilliant. It has crafted its technology to work with the natural progression of the web rather than against it.
Best of luck with your future ideas!
Market first... Without a doubt, this is the best approach.
Danny,
Excellent post with great well thought ideas in an awesome series. I am definitely looking forward to the next part.
Great article, Danny!
This is now posted on Sphinn: https://sphinn.com/story/103749
There's a fine line between jumping into an idea or overthinking it, but the list you put together covers the basics that all ideas should follow. It's important to at least consider each of those steps and (if anything) have it in the back of your mind as the business idea develops. Sometimes I get so fired up over something that I skip practically everything and just go with it...and then spend WAY too much time "backtracking" to do it "right". I'm definitely printing your list out as it applies to so many projects I work on...or will work on!
Thank you!!!
Sometimes I get so fired up over something that I skip practically everything and just go with it...and then spend WAY too much time "backtracking" to do it "right".
I have done the exact same thing. :-) I am hoping that I will have the discipline to do it differently with my current idea.
This really is good information. Very practical, and well thought out. I can tell it was tested in the fires of experience.
After you have a idea ...calulate ROI (return on investment ) .This investment can be invest of time,money ,resources etc.
Even an excellent idea which has high market demand can fail if the ROI is not good or may be the market is still not ready for the idea.
Great post Danny. Being in the business of marketing, I really appreciate these business insight posts. Keep them coming. Thanks!
Will do :-) Thanks
Great article! I will also suggest writing a business plan for your idea even if you aren't looking for investors. Many of the questions that you have to answer in a business plan are also the same questions you need to be asking yourself.
Looking forward to see more articles, this blog series is amazing!
I really appreciate the kind words. Thanks ;-)
I feel your blog really useful and inspiring me. Thank you. Thanks for sharing information and i appreciate it.Looking for more discussion and waiting for new topics here.
* Edited BY Danny - Deleted Link