Why your start-up doesn’t need a million dollars of venture funding to succeed
This is the last post in a series on starting minimalist businesses. Previously I wrote about the art of high-impact income and the power of passive income. But it’s not over yet! Tomorrow I have an interview with The Art of Non-Conformity’s brilliant Chris Guillebeau. Don’t miss it! Sign up for free updates via EMAIL or RSS.
Written by Everett Bogue | Follow me on Twitter.
A number of people have come to me recently to evaluate their business plans for their online start-ups. I’m not usually a business consultant, but I decided to offer my services for free to these people, because they asked for input.
While I don’t pretend to be an expert at these things, (I was a part of Nymag.com’s blog launch and had my own start-up launch,) so one common element stood out to me in all of these cases:
All of these people thought they had to spend hundreds of thousands of dollars to start their business, when in reality their business could get off the ground for under $15.
That’s right, you can launch your start-up for fifteen dollars.
When you launch a start-up, everyone assumes that it’s going to be very hard. They’re going to need an investors. They’re going to need a cutting-edge team of marketing experts. They’re going to need to work 16 hours a day for the next 3 years in order to make their business succeed.
That’s all great, if you actually have a business model that is incredibly groundbreaking. But, most business plans aren’t. They’re simply offering a service and making money.
Why over-complicate things?
Make your start-up as simple as possible, and you’re way more likely to succeed.
Here are 9 ways to simplify your start-up launch for success.
1, Don’t invent your own infrastructure.
If the wheel already exists, you don’t need to reinvent it.
Your business plan has a problem if it assumes that the Internet hasn’t already been invented and companies like Twitter, Facebook, and Google haven’t been innovating on it for a long time on it before you came along.
Infrastructure on the internet is serves the same purpose as it does in the real world. You wouldn’t build your own roads next to the ones that the city government already built for you, right? A lot of start-ups do this though, they build their own roads instead of using existing ones.
There are thousands of useful tools available on the Internet that you can build your business on top of, you don’t have to start from scratch.
In fact, if you do start from scratch you’re much less likely to succeed because you’ll spend a lot more money, your infrastructure will suck compared to the one that already exists, and you’ll waste a lot of time.
I know this might seem obvious, but it isn’t to a lot of start-ups.
Facebook already exists, you don’t need your own social networking platform to run under your service. The solution here is to integrate with existing social networks, because honestly, no one will join yours (Facebook already takes up enough of their time.)
Video blogging software already exists, you don’t have to code your own before you launch a video blog. Just install WordPress and upload your videos to Vimeo or Youtube. Simple, easy, you’re up and running in less than an hour in both of these cases.
2, Use the existing infrastructure.
If the infrastructure exists, by all means use it! Start-ups that ignore the existing infrastructure are going to exist in isolation. This goes for bloggers too. You are 500 times more likely to have more than 1 reader/customer if you find ways to integrate with existing infrastructure. Simply offer social media buttons for people to share your content with, and you’re way more likely to succeed.
Ignoring existing communication infrastructure is to exist in a vacuum. You’ll have to rely on word of mouth to get out the word about your start-up. That’s the equivalent of hiring a guy to pass out fliers on the street. Yes, you might get a few customers by taking that approach. But do you want 5 customers who stumbled across your site because your mom told them or 5000 because you were willing to install a Retweet button?
Five ways off the top of my head that you can use existing infrastructure for your business plan right now:
- Start a blog and publish daily.
- Use a Twitter account and help people with it.
- Use Facebook to interact with customers.
- Use Aweber for your communications with clients.
- Use e-Junkie for your checkout and affiliate marketing.
This might seem obvious, but I’ve observed people coding newsletter systems from scratch and closing transactions via emails. It’s not 1982 anymore folks, these services exist to automate and simplify those areas of your business.
3, Reduce business to the most basic element.
Figure out what your business is about before you launch it. A mission statement like “We’re going to revolutionize the way that people think about publishing.†is not a business idea, it’s an abstract idea.
Business ideas need to be simple, they need to focus on what the business actually does to help people. Simplify, simplify, simplify until a real actionable idea is present.
4, Launch immediately.
If you don’t make the mistake of building your own infrastructure, you can start working immediately.
Register the domain, install a blog, and start talking about the services you’re offering. I don’t care of the service isn’t ready yet, talk about it, gather interest. A lot of start-ups exist in lock-down mode until their product is perfect, but this is the opposite of what you should do.
Make every action you take public, and judge the reaction that people have to it. If you create a product in a vacuum, you’ll launch in a vacuum.
This means that three people will know about you when you launch, and you’ll have to spend another twelve months on marketing before anyone buys it.
5, Focus on a niche.
Many start-ups suffer from trying to tackle too much at one time. Instead of launching one product, they launch five. Instead of focusing on one area of interest, they aim for the center and end up interesting no one.
Pick one incredibly slim market to focus on.
One of the biggest offenders in this area is photography businesses –yes, photography is a business. Many photographers launch as generically as possible. “Hi, I’m jack, I’m a photographer.†The problem with this is, no one knows what you do. You use a camera, but so do the other million people with Digital Rebels and iPhones. You have to focus on a niche, or no one will seek you out.
Writers suffer from this too. I’ve been to endless blogs by people who are ‘writers’. That’s great, but what do you write about? You and every other person on this earth has the ability to write. You have to pick a niche to succeed at in any business.
6, Don’t hire people until you need to.
Most start-ups can be launched with one man and a laptop. But many start-ups insist on hiring five designers, three managers, and a secretary before they’ve even decide on what they’re selling.
No amount of new hires will make your product succeed if it sucks. Launch the product first, hire people when it becomes clear that you need them. Adding additional people to a staff just over-complicates things, making it harder to get things done.
7, Don’t rent an office.
Most people hate going to offices and chances are your business doesn’t need one at this phase. Can you do your work from a coffee shop? Can you do your work from your home? That saves you a hunk of money you didn’t need to spend if you just choose to use email and video chats to communicate with people, instead of renting.
Another bonus of not having an office is you can work with talented people who might not be in your area.
8, Offer a free component.
Freemium works for a reason. For instance, this blog provides free information constantly, and yet I’m able to pay myself a nearly livable wage. Your business has to do the same to compete. As Chris Anderson covers extensively in Free: The Future of a Radical Price.
We’re rapidly heading to a point where everything has to offer a free component.
If you don’t offer a free services, you’re missing out on a way that you can help 80% of your audience and retain potential customers for the future.
Maybe this is a version of your product that offers limited features. Maybe you just offer everything free and accept donations. It depends a lot on what you’re offering, but chances are there is a way to give away something to people.
9, Focus on your product’s value.
No amount of anything will help you succeed if your start-up doesn’t make something that people want to buy. And yet so many start-ups launch without thinking about the simple fact that they need to contribute value. Instead they spend $100,000 reinventing existing infrastructure, or hire five people to yell at each other over a table.
Before you launch, think about how your product helps people and contributes value to their lives. That is the most important element of any start-up.
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