Having founded 3 Internet Startups during my career, and being in the throes of rebuilding the business model behind my latest, SharedReviews, I thought it would be valuable if I share some of the insights I've learned over the years as an Internet Entrepreneur.
1) A Vision and a Viable Business Model are two completely different things: Before you start, realize that the business you want to create will be VERY different from what is eventually viable. The idea you have is a vision, not a business model. The two are intertwined, but rarely do they work together when you first pull back the curtains on what you bring to market. Be adaptable, don't marry yourself to your first ideas no matter how much you love them or how smart you think they are. There can be a very long interlude between starting your business and it being successful. From Market changes, to development and team hurdles, all the way to user feedback, be ready to change. If you don't, you won't last very long at all.
2) Acquiring Financing takes you away from building your Idea: If you don't need financing to get something, anything to market, don't waste your time trying to acquire it. Financing dilutes your and your team's ownership since you have to give up a percentage to acquire it. Also, it takes a lot of work which re-directs your limited resources away from what's most important, getting your ideas to market. With today's technology and development costs, it's very easy to get something to market while spending very little. The only person you'll be accountable to is yourself, and market feedback is fast and furious, so you'll learn very quickly if your first ideas need tweaking, or even a major overhaul.
3) Listen to your Users, but always keep your Business Model a Priority: I'm sure you've read this before, but I can't reinforce just how important this common piece of advice is. If your vision is dependent on a niche user base to grow the business, make sure you are giving them what they need, the way they need it, and the way they want it. But the important thing to remember is to make sure that it's not at the cost of the business model. Otherwise, you'll be in the unenviable position of where SharedReviews was a few months ago, a company with early success and great feedback from a fantastic base of users, but a resulting model that just wasn't viable. This is why SharedReviews is in the throes of being re-built from the ground up. This has caused some of our users pain, disbelief, and outright angst. All things you don't want to have happen when your business is going through a pivotal change, no matter how much you know the changes are going to benefit everyone in the long run.
4) Although most Success Stories seem to happen Overnight, assume you're in for a very, very, long haul: For every success story that hits the news, there are tons of success stories that don't. Want to know the big difference between the two? Time.... If your site receives 1, 000, 000 unique visitors 3 months after launch, It'll make the papers, blogs, Social Sites, you name it... but if it takes 3-5 years, you probably won't hear a chirp without allocating a budget for a significant PR campaign. If you see hyper-growth of this nature, good for you, and take as much advantage of it as possible. But realize you have a greater chance of winning the lottery than experiencing growth of that nature. Building a business takes time, mark off 3-5 years of your life before you decide to take even one step down the path of starting your own Internet Business, since chances are you'll hit major potholes that delay your travels down the road of success.
5) Choose your team wisely: Another common piece of advice, but one that has bitten me too many times not to mention in this article. You are only as good as the people you surround yourself with, period. If you can't do it all on your own, then you'll need help, and you have to make sure that help fills the gaps in your skill set, believes in the vision almost as much as you do, and has the masochistic fortitude to make it through the very tough, and long road ahead with little to no pay. Even though some will catch the contagious enthusiasm you exude out of the gate, you have to make sure they are all clearly made aware, up front, of what could lie ahead before the company becomes a success.
6) Be ready to do everything and anything your business needs: Founder, CEO, Chief Cook and Bottle Washer... titles mean nothing in a startup. Your abilities and experience may help your business at times, but most times your startup is going to ask things of you that you're not ready for, or may not even have the skill set to complete. My background is mostly Management, Sales, and Business Development, but in the last two years I've spent most of my time being a programmer, designer, DBM, product manager, project manager, Internet Marketer, Search Engine Optimization Specialist, Editor, Publisher, Community Manager and many other titles I can't even remember. You have to be ready to do anything if you want to survive, and if you don't know how to do something your business needs, you're going to have to learn how very, very quickly.
7) Double, Triple, or even Quadruple any estimates of time needed to reach milestones: This is probably the one mistake I've been guilty of the most, and has led to the most pain and problems in the life of all 3 startups I've founded. Sometimes you are forced to set goals that are beyond your ability, the overhaul SharedReviews is currently going through happens to be one of them, but when you can afford it, give yourself as much time as possible since not meeting a goal when you say you will kills your credibility, and credibility is one of the few things you have complete control over in your professional life as an entrepreneur.
8) If your idea is good, be prepared to be copied: This means speed to market is very important, and unless you've completely launched your business and are showing major traction, do NOT, and I mean do NOT approach anyone for financing or a partnership that is in a similar line of business. You may think it could result in an eventual acquisition, or an investment that will not only net you capital but additional resources from the investor, but I can tell you that pitches I've made in the early days of SharedReview have built businesses. Unfortunately none of them were SharedReviews. Thankfully there were flaws in my original ideas that I've capitalized on correcting in order to maintain our differentiation. The bottom line is that I was lucky, so remember that loose lips sink ships, and make sure you keep your ideas as close to your heart as possible unless you are absolutely forced (with a notorized Non Disclosure Agreement) to share them in order to speed your growth.
9) If you're raising funds, allocate a lot of time and effort to the process: Your business model is live, has some traction, and it's time to raise capital to scale. Well, now your business model becomes secondary to the new business you've entered of raising financing. From preparing your pitch, to creating proper financials and a compelling business plan, you are going to spend tons of time just preparing before you even step out the door to meet with your first potential investor. Be ready for rejection, it's going to be worse than being at a party full of Miss Universe contestants and being the only guy who isn't a model and doesn't have a Ferrari parked out back. Getting a dance becomes a numbers game, so if your business idea is a true game changer, not many will "get it" at first. Even with some traction most Venture Capitalists will only consider you if they believe your business has the potential to earn 100's of millions someday. Remember, most of their investments fail, so the ones that do succeed have to pay for the rest and offer a Return On Investment to boot. To mitigate this risk, they rarely ever consider an investment that doesn't have the potential to be a Facebook someday.
10) Now the most important piece of advice I can share: Never, ever, and I mean ever, give up. You will face adversity, rejection, depression, pain (emotionally and physically), competition and all kinds of things that will work in unison to hold you back or dissuade you from your goals. You have to be ready to weather all of it, build as thick of a skin as possible, and believe even when your ideas are unbelievable. I have had more people tell me to give up (including family and friends) than anyone ever encouraged me. I've put my family through hell financially, I've used up everything I've ever put away for a rainy day, and I've barely spent any time with my two-year old son even though I work from home.
Be ready to sacrifice everything for your Internet Startup if you truly believe, and it will take everything you have in your body, mind, and soul to see your vision become a successful reality. Any advice to the contrary won't prepare you for the harsh, yet rewarding, reality you're about to face.