Great idea for a startup? Hmm ... Hardly

This is a free translation-retelling of this 2006 article , which I stumbled upon at mailinator.com, authored by Paul Tyma . Mentioned on Habré did not find, so will the translation!

So you have a great idea.

Over the years I have launched a small handful of projects and created several companies. For example, Mailinator, Preemptive Solutions, Inc., and Classhat. In fact, I have done them much, much more, but about the majority I heard except my grandmother. This is because, predominantly, these were stupid ideas, unsuccessful attempts to do something, or too large-scale undertakings, so that I could bring them to release. Having learned from my mistakes, I now check every new idea for compliance with a specific set of rules in order to weed out good ideas from bad ones. Well, or those that seem to me so.
Do not forget, these rules for a canon startup are when you and your friend are the only employees, and the money is for beer and chips. If you have an extra couple of millions in your storeroom, you can do magic without these tips.

Here are the rules:

1) If there is no business model, this is a hobby, not a startup. I love to optimize the code. When Java first appeared, I wrote an optimizer for it. For months, I tried to make some money on this, but it turned out that people are not very steamed about the speed of their programs. And all the more not willing to pay money for it. At least, until the trained sales team proves the importance and general benefit of purchasing our product. In most cases, ideas come from the environment in which I work, from classes that I love. Only a few of them are under a real business model, when the consumer will bring you money. I have nothing against a hobby, but business needs to be built on the fact that, among other things, it generates income, and not just the joy of being in love with your favorite business.
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2) The best ideas - those that allow you to earn your customers . If you can say something like “Using our product, you will earn% X money” (where X is more than zero, even if not by a lot) —a great idea. Please note, do not " save X% money ." Earn . The difference is bigger than it seems. Save, of course, great, but compare:

• “Give us 100 rubles and you will save 10 rubles in a year.”
• “Use our services and earn 5% more (and pay us a little out of these 5%). Or do not use and lose money. "

What would you choose?

3) It is best to work on the business-to-business client scheme (you are left here). Yes, it's best for you to be a firm that works with firms that provide your service to clients. If you work directly with clients, you will get a lot of difficulties. First, you will need to convince the client to pay for your services, and who likes to pay? Secondly, welcome to tech support hell. You will always have a bunch of disgruntled users, if you do not cope with support, and you can hardly do it - it is expensive and requires a lot of human resources. If you have plans to make a paid service - make the support system first. Thirdly, it is more difficult to conduct many small transactions than a few large ones, you will need to develop the infrastructure. It’s harder to sell 1000 times the service for $ 10, than 10 times the service for $ 1000.

However, if you simply provide services to another company, this is also quite good. Large markets are difficult to control, and you can find your niche due to rapid growth, or, for example, in optimizing the business processes of serious companies.

4) If you decide to work with clients directly - pay attention to possible sources of profit that are not from the client . Make your service free. Now you think that I hit my head, but look here: the service is free, which means we do not guarantee serious technical support or special stability, which means reducing our costs. On the other hand, a free service is more popular than a paid counterpart and has a chance to cause a viral effect. Now think about the profits from advertising and affiliate programs - voila, a free, profitable service!

5) Sometimes remember old ideas . Why is everyone so fond of AJAX? Because you can do things with him that you could not have done technically before. Thanks to progress, old ideas can start playing with new colors.

When Doom came out, 3D graphics had long existed. But the ID guys were the first to notice that the PCs were fast enough to make a shooter and play in real time. Technology has stepped forward.

Every time something appears or gets cheaper - this is a reason to reconsider your ideas. Traffic went down - video services appeared. Smartphones appeared and fell in price - a bunch of applications appeared to them. So always, take a moment.

6) Come up with something to get income again and again . Advertising on websites and all that is a simple way. But what if your product is an app? Why does Microsoft change format details with every release of Microsoft Word? Yes, new chips, but in the end it's just a text, why don't the old versions open documents made in new ones? It's just that Microsoft wants it. They want when you can’t open another document you go and buy a new Word. They want to get income again and again.

From the side it may look like a frank greed. Have you heard about the "software subscription"? In fact, of course, this is “software for which we will constantly take money from you”. If the products did not “wear out”, no one would buy new ones. However, if giving the money the user will see and feel improvements, then everyone will be happy.

Still sure your idea is good? Do not hurry, there is a second part.

The second part of the tips is here .
On errors, please report in the LAN, I will correct as soon as I wake up. All read here - thanks!