What is a startup company?
A high-tech startup company is a company recently formed mostly for the purpose of making business of building wealth by solving a technical problem that potential consumers care about.
In the late 1990s, high-tech startup companies were flourishing in the United States and other parts of the world where there was a need to solve a bunch of technical problems that people needed solved. Most high-tech companies used to come up with those solutions and implementation thereof. Then they'd look for VCs (Venture Capitalist) to invest into the company and usually when the company is at its premium, shares are sold to potential public investors or the company as a whole is sold to a much bigger one, giving the chance to the people who started it to look at other problems to solve and possibly start a new venture.
Why a startup company?
Well there are a few reasons why one would want to startup his/her own company.
The most important one would be the creation of wealth as Paul Graham suggests in his book "Hackers and Painters: big ideas of the computer age". Let's look at this idea a little bit closer. Starting up a company is no joke. It requires a lot dedication, hard work and the ambition to always do better than the competition without forgetting an understanding of basic business principles; plus the ability to learn advanced ones on the go (management, negociation, respond to environmental changes, conflict resolution, understand team work and group cohesiveness, etc...). The question is, if one could have a normal day-job writing software in a super big company that already has a client-base and that pays quite well, why would he/she wastes his/her time starting up from scratch if it weren't for the benefits in it?
The other one would be "everything that needs to be invented has not been invented yet". I remember having heard this one many times without actually knowing who the source of the expression is. But let's think about it. Has everything that needs to be created already exits? If so, why is it that tons of people still make lots of money by creating and coming up with exisiting but bettered or whole new products? My theory here is that the world is made of millions people. As businesses, the media and what have you have been emphasizing lately, we live in a very diverse world. This diversity comes from the fact that each human being has a different culture, intelligence, values, needs (whether it be physiological, social, information-related), wants, etc... These differences in each of us makes it hard to have a sort of "one fits all" paradigm; meaning that a solution that works for me might not work for all: an example would be generic software like word-processors; as you may have seen, users most of the time need to specialize the software to fit their needs and that is why most of those come with scripting languages allowing the user to build in it whatever specializations fit their needs. The same differences can be tap into by people who would like to startup a company: the secret is to give the users what they care about. And with millions of people on the planet, I believe that wants and needs exists by millions too. So there are probably a dozen million of things that need to be invented that have not yet been created: there lies the opportunity.
The 3rd reason I would put forward is actually a question: if you worked in a big company where you were paid a certain salary per month. Then according to your calculation, you'd be able to have about R6,000,000 in your bank account when you are 55. However you are presented with the opportunity to make the same in a year-time. Which option would you choose? I bet the year-time one. That is what a startup allows you to do.
How to find the right idea or opportunity?
Well, I am not sure whether there is a right idea or right opportunity. However, I believe as I wrote earlier that there is a pool of opportunities to tap into and all that is needed is to find them and make a choice.
The first approach IMHO (In My Humble Opinion) would be to start by being unconventional or better, by thinking out of the box as the expression usually goes. In today's society, convention is the "right thing". But being conventional means being like everybody, thinking almost like everybody, and just as everyone else, dislike ideas that are "not conventional". But if everyone of us thought the same way and tried to be conventional, there would not be any opportunity for innovation. Take for example the fashion industry: is there any thing conventional in there? I think not. If you've been to a fashion show, you would have noted how unconventional fashion designers' ideas were. At first people think: "Gosh, he/she is crazy!" But a few months down the road, that unconventional thinking becomes the "fashion of the moment": "unconventionality" is what society needs if it expects to progress in any way.
Once the above has been accomplished, it is believe that it is necessary to introspect in order to find out what ideas oneself would like to implement or what technical problems oneself would like to see solved. Most likely, what you need to solve and what problems you are beeing faced with would be the same for let's say about a million people: there's a market there already although of course a thorough study of that market would be necessary. But I am trying to make here is that it is always easier to solve one's own problems and one person's technical problems is usually shared by other people around the world (I am pretty sure of this).
The third approach would be to talk to people around you (this is not necessarily your immediate environment but also people on communication networks and so on. Always remember that people on the Internet for example are around you: global village). Talking to people and asking them what problems they'd like to see solved helps you see what the crucial users' problems are and gives you an estimation of what the size of your future market might be.
Once you have some ideas to play around with, head to putting together your team. From my experience, this seems to be the most difficult part.
What attributes to look for in the team members?
Many high-tech startups started as derivative from university research groups or technology-enthusiastic groups who sought for an opportunity, found it, implemented it and decided to make it accessible to the general public.
IMHO, for a high-tech startup, there is a need for a small group. The smaller the group (not too small though), the more focused the team members and the quicker the implementation of the idea. The size of the group would be anything between 3 to 5 members. Each member should be able to contribute ideas, solutions and quite importantly, should have a sort of technical or manegerial ability that would steer and fasten the development process. The other attributes that are needed would be things like ambition, passion for technology, understanding of users and their problems and a few more I probably cannot remember.
From all those aspects of team members above-listed, passion would be very important. The thing about a startup is that it might work out quite well (hopefully) or it might crash. And this is why passion for technology and for the cause is important. If there is no passion, team members are discouraged at an early stage and the startup crashes quite badly. This has happened to two of the startups I started with some friends in the past. The ideas were good, the users wanted it, but the passion from most team members died and I believe this is the deadliest thing that can happen to a startup.
How about competitors?
Well we all know it: if you have a good idea and it works for you, there would be a bunch of people, organizations that would copy it (without necessarily infringing copyright laws, etc...) and make sure they better it, then get your market and softly kill your startup. How to fight against this? Well Paul Graham in the book I previously mentioned suggests the following:
- release the first version of your implementation as fast as possible. The team should not focus too much on including all the feature in the first one but rather focus on putting in the most important and user-wanted features.
- make incremental releases after the product is launched. If it is web-based and it should be, you don't have to struggle with forcing users to download updates to their computers, fight with software version incompatibilities.
- for every feature to implement, there would be a hard way to do it and an easy way. Always make sure of using the hard way because this gives you an edge over competitors. By the time they start thinking about how you implemented this feature or that other one, you're already on your way of implementing an even harder one. In the end they'd just give up and crash or they'd build something similar but quite sloppy in its design and programming.
What is my dream?
Now, let's get to the subject at hand: "my dream: a startup company". As I said earlier, I've had some experience with this. Two companies I worked for in the past were startups I started with some friends. Our attributes:
- we were all technically apt
- we had great ideas and great solutions for big technical problems
- we had a great passion for technology, problem solving and what not
- we loved working togethers and spend hours in the middle of the night hacking code on our keyboards
- most of our ideas did not encompass what USERS WANTED
- most team members after a while lost passion and got embedded in daily life problems and issues (family, girlfriend or fiancee, loss of focus)
- we lost focus of the BIG PICTURE
Once we have the final idea on the table, use it to design great and beautiful software always making sure that the competition if there is any cannot reproduce our work.
Focus, focus and focus again on the big picture while making sure the passion is still vivid and possibly retrench to a location where we do not get bothered by "daily-life problems".
Work extremely hard and fast.
Be objective with our goals and be realistic: for example knowing that although we put 4 months of work into the project, there is always a risk for the startup to tank.
At the moment I've got a couple of very good ideas. I've been working on them for a while. What do I need now? 2 or 3 People to help me think through it and obviously with the passion, drive and technical ability to implement it. Will I ever find those?
Well, I am still search and hopefully the future will tell....
What do we do if it ever works out?
Well the idea is to build wealth (money, create employement, etc...), take the company to its premium and ultimately sell it to a big shot. Then focus with the same team on starting up a new venture. How's that?
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