Dharmesh Shah


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Startup Business Strategy For The Simple-Minded

By Dharmesh Shah on June 20, 2008

Here are the six simple steps for building a startup (in this case, a software startup).

1.  Figure out what to build.  You can do this by being brilliantly insightful (which you might be), or by just talking to some people.  Ask them questions.  Would you use this?  Does this solve a problem?  Would you pay for this?  Do you know anyone that would pay for this?  Are you going to roll your eyes and laugh out loud once I leave the room?  Are you going to tell you spouse this idea over dinner this evening to demonstrate that you indeed do have a sense of humor?

2.  Build something.  It doesn't have to be the world-changing thing you devised in step 1, but a close enough approximation.  It should do at least one useful thing from the list of game-changing things that's on the feature-list from #1.   Oh, and it should sort of work (even if requiring the assistance of some chanting, prayer and promises to recycle more).

3. (Option A)  Release!  Get your product out there.  Even if it's buggy (which it will be).  It is possible that everyone that sees it runs screaming in the other direction.  Mothers protect their children in its presence.  But, get it out there and work like heck to deal with the aftermath of the steaming pile of elephant doo-doo you've unleashed upon the world.

3. (Option B) Make Perfect, Wait, Release!  This avoids the problems with Option A because people will no longer run screaming.  But, nobody cares about your product now because everyone is flying around with jet-packs on their back and 16-core processors are embedded in people's brain as an outpatient procedure.  Your market changed and your doohickey (however "perfect") is irrelevant.

4.  Sell.  Sell.  Sell.  The law of large numbers says that the larger the number of people exposed to the product (see Step 3a), the more people you'll encounter with average coordination who will trip and fall when trying to run away from your product demo.  Some of these people will buy while still in a semi-dazed state.  Voila!  You have customers.

5.  Refine.  Armed with a few paying customers, see what you can learn from them.  What are they like?  How do they use the product?  What do they say between the screams of frustration?  Figure out how to lower the pain quickly and treat them gently.  During these brief spites of happiness that you customers have, other customers will come into contact with them think "Hey, Joe seems to be happy -- even though he's got this far-away look in his eyes", maybe the software isn't too bad.  Let me try it out..."  Bing!  You have another customer.

And the story goes on. 

For the really, really simple minded here's the summary:

Decide what to build, launch an imperfect version, sell unsuspecting customers, keep improving, sell more unsuspecting customers.  Lather, rinse, repeat.  SUCCESS!

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By the way, if you haven't joined the OnStartups Group on LinkedIn, you're not missing much.  There's not much functionality there yet (but the group is big).  The hope is that someday soon, we'll have more functionality so you can collaborate more meaningfully with other startup folks.  Until then, if you'd like to request access, please do so. That way, you can say you joined the group when it was just 11,692 members.  Come on in and join.  It's quick, painless and free.  Request access to the group.

Topics: strategy
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Taking The Leap: Don't Just Be A Wannabepreneur

By Dharmesh Shah on June 9, 2008

Chances are, if you're reading this article, you are either involved in a startup already, or looking to be involved in one.

This article is for the folks in the latter category, the "wannabepreneurs".  The ones that have always wanted to be entrepreneurs, but haven't quite gotten around to it.  The folks still slogging it away in BigCo land waiting for the "right" entrepreneurial opportunity to come along.

Here's my advice:  Stop Waiting!

If you've got a passion for startups, you need to be in a startup.  Either run with the best idea you have and start your own thing (even if the idea sort of sucks), or join the best people you know that are already doing something.  Just get out of the daily slog that is most big businesses.  Scratch that itch. 

Be an entrepreneur, not a wannabepreneur.

Here are a few quick points to help convince you:

1.  You're probably overestimating the risk of leaving that BigCo job.  Chances are, that sort of job (or something awfully similar) will be there a year from now if things go miserably.

2.  Though nothing compares to doing your own thing, joining a startup team is not bad either.  It's a great way to dip your toes in the water.  Often, half the battle is just getting out of your comfort zone and being around startup people.

3.  Regardless of what your risk tolerance is, you can likely still find opportunities that are more entrepreneurial than what you're doing now.  There are startups with really high risk, with nothing but a dream and a developer (or two) all the way to startups that have raised several rounds of funding and are on the IPO path.  You should be able to find a startup that meets your risk profile.

4.  Unless you have some compelling evidence that things are going to get easier later to do something more entrepreneurial, chances are, they're not (going to get easier).  So, if the question is when, not if, then ask yourself "why not sooner, rather than later?"

5.  For those that are thinking: "Yeah, this is all easy for you to say, you're not walking in my shoes", I say this:  You're right.  If you truly don't have the situation or circumstances to take the leap, that's ok.  I just implore you to at least think about it and decide for yourself whether your obstacles are real or perceived.

I'll close with a quote that's been on my list of favorites for a while:

"Regret for the things we did can be tempered by time; it is regret for the things we did not do that is inconsolable." -Sydney Harris

Cheers.

Topics: startups
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