If you are thinking about starting a business, especially a business that is either directly involving digital media, technology, application development (marketing, operations, ecommerce, etc.) or even just related to these industries I am dedicating this blog post to you. I want to share some experiences I have had in hopes that you will take them and steer clear of some potential snags. Hopefully you can learn from my experience and take advantage of the opportunities that exist in our beautiful free market while avoiding some potential pitfalls.
This could be a very long blog post. I have enough mistakes over my career to fill several posts. In the name of keeping this somewhat manageable, I will only focus on a few key and, in my opinion, critical things to be aware of.
If you have started a company or are planning on launching your own company and you have what you believe is something of value (service or product or combo of both) I recommend you do a few things:
1. Research the hell out of your offering and the industry/market you will be in, the current state of your industry, current offerings, and the companies/people who are offering anything closely related to what you want to sell. You need to understand the competitive landscape. I have launched four companies, none of them launched with a single client. Three out of the four have seen success in a relatively short period of time. The three that are successful - a ton of research and market analysis prior to launch. This analysis included an honest assessment of potential clients, how many exist, how many realistically would engage with my new venture, and how developed the market was/is for these offerings. After all, if the market is not ready for you, or if it is past you, you will not have much success. Timing is critical. If you have competitors, are they good? Are they mediocre? What will make you unique? Will you blend in with everyone else? It is always tougher to ski on a crowded lake. What about the company that did not find success you ask? We rushed in with what we thought was a phenomenal idea. We were first to market with our idea, the technology was ground breaking in an industry that was and still is growing by leaps and bounds. Sounds perfect right? Wrong. We did not have a good enough understanding of all of the hoops we would have to jump through to get the necessary clients, we did not have a good enough foothold in the industry we were entering because we had not done our homework. We rushed in and the result was a quick start with eventual tapering results. If your technology is that good/unique, you most likely will have enough time to handle the pre-launch due diligence.
2. Avoid those trying to get your something for nothing. If someone you meet makes you an offer that seems to early, to good to be true, or too eager to make you a deal consult your business attorney. If this saint in a suit is truly looking to help you launch, secure the big deal or simply leverage what you have for their interests, that is great, just don't go too far down a road without consulting others that have more experience in these matters, specifically your attorney. After all if this person or group is a legit opportunity and they really have a good business relationship in the cue, they will have no problem getting it set up right from the get go. If the approaching party is shy about involving attorneys or even documenting the relationship details, run the other way. You will only be avoiding future headaches and potentially losing your intellectual property with no recourse. Even if the deal does not work out, and your suitor is not legit, that is a good sign you may be on to something.
3. If you are dealing an application play never let others see your source code unless you have a document that protects your ownership rights to that code, or a document that outlines the sale of that code. Seems obvious, but you may be surprised at how many coders and app. developers get ripped off.
4. Review #2 - when people throw money around multiple conversations, it is easy to believe it especially when your new company is hungry for revenue. Do not drink the kool-aid.
5. Stick to your guns. This may be the most important point. If you have done your due diligence, you have a truly unique offering, a better way to do things, a superior product, a unique position in the market, the next big app., whatever you believe is going to be a success and make you a successful entrepreneur, if you take the leap - do not give up. Do not listen to naysayers (they are probably scared of your offering, esp. if they are perceived competitors). Ignore the nonsense and focus squarely on your plan, your offering, your clients, your business development efforts, your operations. Give it every ounce of energy you have. Work it until you feel like you are going to die. If you stop short of any of this and quit believing you are the only one to give the market your "thing" you will fail. Stick to your guns. Stick to them despite a bad month of sales. Stick to them despite a server meltdown. Stick to them despite your friends not understanding what the hell it is you do for a living. Stick to them despite not being able to talk shop with your family at Thanksgiving. Don't look back, keep moving forward.
One quick story about sticking to your guns. We launched The Basement when I had less than a month's income to my name, two children, a wife who had been dealing with a wacky self-employed husband for years, our family house was up for sale do to the whole lack of income thing, and we did not have one client or one dime in our company bank account. We stuck to our guns - all I can say is my family is still in our home, it is not up for sale, we are running a successful business with a great client list (most of which are return clients many times over), new clients jumping on board monthly, we have a ton of positive new opportunities on the cusp and an awesome staff. Sure this year has not been all roses with a nasty economy, but that being said, we are hanging tough and there are blue skies ahead.
We stuck to our guns.