Tag Archives: entrepreneurship

Why Web Startups Need To Think small

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I’ve been a fan of 37signals ever since I first used Basecamp during my stint at Slideshare in 2007 and later while working on Kwippy. What’s also special about 37signals is that not only they build great products that make money, they are also doing a fabulous job at sharing their experiences and learnings with the community using Social Media long before it was a buzz word. If you haven’t done it already, you should checkout their blog where they talk about design, business and other things.

Sometime back I happened to listen to this talk given by DHH on ‘Making money online’. Despite a cheesy sounding title the talk is a great primer for web entrepreneurs  starting up or thinking of starting up. DHH touches upon a great point when he says

The odds of you in here making the next Facebook or YouTube or MySpace are tiny, the odds of you just actually just creating a product that few people will like and pay more for, not that shabby.

It’s kinda like reverse terror alerts, the probability of something like this happening, like the probability of you being crashed in the plane, tiny, but the fear you have of it or the desire you have to be the next Facebook, Huge, because it’s been broadcasted over and over again, you are being brainwashed

DHH further goes down to put forward the maths behind making a million dollars in an year by having  2000 customers and charging them 40$/month. Adding decent  conversion rate(5%) to the equation it would take about 40,000 signed up users to get 2000 paid customers. Taking it down one more level to make 200,000$ a year you would need just 400 customers at 40$/month.

The number of problems/niches one can attack trying to get this many customers are a lot, but not surprisingly we still find most web start-ups aiming at building the next Facebook or YouTube. Its not uncommon to find entrepreneurs by the dozen running after VCs and Angels to raise money for the next big thing on the internet despite the fact that most of them can get their venture started without too much money. One of the primary reason for this is the fact that raising million dollars for building(or the mere thought of) a global product that might be used by millions is SEXY however building a web product that’s being used by a few hundred or thousand users while making you some money isn’t.
This frenzy is fueled by media and consumers alike and the entrepreneurs(esp first timers) get unknowingly drawn into this trap and the next thing you know is everyone trying to make it big without even trying to taste success in building a smaller yet useful product.

While I won’t discourage anyone from taking big shots right from the start, I strongly feel its a lot better(and practical) to solve a small problem first before going for the bigger one.

Proto.in, Be There.

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The stage is almost set for the fifth edition of India’s biggest startup event “Proto.in“. This time’s proto would be held on the 23rd and 24th of January 09 at Bangalore.

About Proto(from their site):

Proto.in, Today, is about giving entrepreneurs a platform to express their visions and showcase their imagination, with a working prototype, for the world to see. It’s about increasing partnership, collaboration and mindshare among a distinguished, qualified and well-connected audience. Proto.in provides a unique platform for promising startup talent to communicate their creativity and innovation potential. As a meeting place for the smartest entrepreneurs, venture capitalists and professionals, Proto.in stands true to its mantra “Create, Contribute, Collaborate.”

Proto is about celebrating entrepreneurship, and encouraging it where it matters the most – at the startup level!

1. To Showcase Innovative technology products borne out of India
2. To Encourage, grow and create entrepreneurial awareness
3. To create a community of startup entrepreneurs, who can grow in strength and numbers, drawing wisdom from each other.
4. To act as a bridge between well-established companies, veteran entrepreneurs, venture capitalists, analysts, journalists, professionals and grass-root entrepreneurs.

I’ve said this before that Proto is THE place to be for all startup junkies, entrepreneurs and wanna be entrepreneurs. This edition of Proto has some really interesting sessions/camps including

Shotgun Startups – Teams of technologists, programmers, designers, and product architects compete with each other to build a product in 24 hours, and get them voted by the audience at Proto.in, with one emerging as the winner.

Pitchcamp! – The first pitch that you make, be it an investor, partner, employee or client about what you do, makes all the difference to that first impression. Pitchcamp will be a workshop for startups to help them sculpt their pitch that will sell every time.

Innovation Jam – Ideation is a simpler process. With the success of the process that started last time, at this proto.in, here’s a chance for the entire audience to participate, in chipping and brewing fresh ideas off of their head. If you have a creative block, this will ensure that its flushed out.

Registrations open on Monday, go book yourself a seat. Checkout their blog for more and for any queries Vijay is the man.

What game are you playing ?

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I remember reading some time back about it and for the past few days the realization and understanding of this has got stronger.By game here I mean the business you are into or upto.

While there’s nothing abstract or profound about the thought but still I personally feel most people including me(till a while back) don’t tend to think on these lines. The point being simple, what’s the size of the game you are playing ? …Every business can be done/run in various sizes or scales, with or without the involved people realizing the current size and to what size can it extend to in the existing setup.

Consider these sample cases for a bunch of guys working together

Case 1: Game = small
Building products/softwares for small clients. ex: college students working part time to get some extra cash.

Case 2: Game = Medium
Building products/softwares for medium sized organizations

Case 3: Game = BIG
Building products/softwares for the some really big organizations or better for the web in general.

The point that I am trying to make here is that when you start a business you more often than not stay in the same scale and it’s your positioning in that particular scale what changes. So the switch from one scale(or game) to another is some thing that requires a lot of hard work, mind work, motivation, resources, time and more. Another crucial ingredient is what people fancifully call “moving in the right circles”, yes you have to be in the right place with right people at right time to make this transition.
The reason why most businesses that start in a scale tend to stay within their territories is because either they fail to realize this or they fail to achieve it.

Saying all this I feel that if someone consciously and repeatedly, rather religiously tries to make this transition of scales, the game can change unbelievably. Changing with it everything that’s involved including the mindset/thought process of the people involved and suddenly the concerned people find themselves amidst something which otherwise could have taken a lot of time if at all possible in their lives.

What’s even more exciting is the fun and excitement that comes during this whole process of changing the game.It magnifies the whole set up, everything scales up and the situation without you realizing changes you and the way you approach business and maybe life in general. It’s like a wave that comes and takes everyone whose ready, to an all together new and exciting place, giving those orgasmic “aha moments” for free.