kivanmaharaj.com

With a so called global recession in the midst most people are cutting back on spending and companies are looking at ways to reduce costs , usually by headcount. But is all this doom and gloom that bad or is it just a market correction allowing those employess to look at becoming the next set of entepreneurs.

This is the perfect time to become an entepreneur as most people are will to negotiate good terms. You can leverage your risk as a startup by negotiating with potential customers and suppliers. You might be thinking how will this ever work as most people will demand cash upfront or require some sort of deposit. That may be true but that is just the initial negotiation. Companies need business so they will be willing to bend to get new business if you can show you will strong customer growth. Think of each supplier and customer as a potential Venture Capital partner so you would need to demonstate your companies capabilities from the start.

Before you even start any types of negotiations present you business model and explain the benefits of doing business with you. This would put most people at ease as it would demonstrate you are really serious about your business and lead them to be more flexible with you.

So use your skills to leverage ,leverage, leverage, anyone and everyone that can help you grow during these tough times.

Normal human thinking suggests that one should start a business in boom cycle as it probably has a better chance of survival. But is this really true or just a mind game that teaches us to be risk averse ? . The latter is where I feel most people stand.

But that type of thinking really would not get you anywhere. You are going to compete with many companies for business as in a boom cycle every man and his dog is looking to start a company and grow his fortune. So you are probably one in one thousand that is thinking on the same lines.

The best time to really start a business is in a bust cycle as there is less competition around to hamper you and you learn to live lean and mean so when the good times hit you are able to capitalise on that and would have already had a head start from the up and coming crowd.

It is obviously more painful to start a business in a bust cycle but it is a far better learning expierence and it helps keep you on an edge.

The other part is that people are more flexible and more willing to negotiate whether it be potential employees or suppliers.

So think about it.

When you are in startup mode you are in most cases cash stapped so you cannot offer those great packages to talented people that companies like Google or Microsoft can. This usually leads to one of many options. you could offer a share incentive scheme to you potential team, a partnership or a mixture of all with a cash portion.

This may seem like a super idea as you get skills at a fraction of the cost that can assist in building you producting or taking it to market. But with a partnership comes the good and the bad. Like with a marriage if you do not work out the finer details at the beginning you are asking for failure.

So what do you need to put in place to safegaurd yourself as much as possible but still make sure the other party is happy with the offer.

The first and most important thing is a contract. This is the basis for the entire partnership. Within that contract you should make sure you have an exit strategy , the value each one brings to the table and what they will be allowed to take when they leave. That could be anything for 50% or the value of the buisness right up to 0% or anything in between. Just be careful to not look like greedy while doing this part as you would then already have created the impression that the person joining is going to be the losing party at the end of the day which in turn could lead to other nasty issues later.

Also make sure that there is one person with operation control as having an equal partnership will lead to stalemates in the business when it comes to making decisions.

As a startup business this is important to keep in mind otherwise you will be asking for issues later.

With the release of my first product soon, I was pondering whether I release the product fully to the public or a private beta so that I could get feedback from a select audience and fix the bugs then and there.

On the one hand I see the market moving so fast that if I delay a full release I could be losing valuable traction and revenue. It is a tricky situation. the other thing is what if there is a person already out there that has a similar offering and about to release it to the public. That could really slow my effort to gorw in the market.

I am still pondering on this and hopefully come up with an answer soon.

So you have an idea and now need to make it a reality. If it is a web app , you could do it these days on a relatively low budget. The main concern is not how cheap you do it ,but the quality of the product.

In the web space there are so many me too products you really have to have an outstanding product to get the required attention. It should be so easy to use that people don’t have to think. That is really how easy it should be use.

Consumers want ease of use and seeing that most of us don’t read the manual ,the product has to be consumer friendly. A perfect example is the Apple Ipod. You don’t have to get a degree to use it. It is so simple that is become so popular. Believe me , if it was built like a mainframe app, Apple might have sold only 100.

The same goes for web apps. So simple that I don’t have to think. If we start building more apps like that we are sure to be one step above our competitors.

So you have a startup and now you need to build a passionate user base as well as get that userbase to generate revenue for you and you startup.

One small glitch, you need to make people aware that you have a product. Marketing comes into play here. Where and how do you market ? Well that is a difficult one as marketing no matter how well you think you know your audience is a hit and miss game. So how do work around having many misses. Well I think the shotgun approach is probably the best one. Put your brand anywhere and everywhere. It should be in your face all the time and everywhere you look.

So does a target audience reall matter. I personally think not as these days people can consume the same product but live totally seperate lives. So you need to look at the entire consumer base as possible users including all age groups. These days even older people use products marketed towards a younger age demographic.

For my startup I intend following the market everywhere and anywhere approach.

During the past few posts I have focused on marketing and branding. I see today that Entrepreneur magazine has written a good post on branding your product.

Check it out here Entrepreneur Magazine

With all the hyp around social networking and the giants in the that space like Myspace , Facebook and the likes , the one thing we need to keep in mind as well is that there is nothing better then a face to face meeting. Technology is really good but a face to face intial contact is better.

As a startup that will be focusing on social networks and other consumer areas , this is important part to think about. how do I bridge the gap between real and virtual social networking. I think that this should be the next step in social networking. Combining the real with the virtual will  not only build the group of people’s relationship but they will be less likely to leave the site as they would become more involved in the social aspect.

Can we define this as Web 3.0 V2R ? I wonder but I think it should be part of the future of social networks. It would also give the social network a chance to bring in more advertising revenue from setup social days.

This is just a thought anyway.

For most startups within the internet space the main source of income is through advertising, specifically web ads. Most just use one of the 3 ad providers. Slap some ads on and wait for the cheques to roll in and hope it is enough to cover the costs and allow for some small luxuries.

The reality is that in the current market those cheques are getting smaller and we need to look at alternate ways to grow revenue. One of the hot areas at the moment is the mobile realm which is dominated by admob. They do billions of impressions and seem to be really gaining a foothold around the world.

For my roadmap I was looking at mobile content and advertising models as it is a possible way to grow revenue. People are also more accepting to mobile ads then before and with a good rewards program it can really take off. If you think in terms of access most people have mobile phones then Pc’s.

Currently India and China have the largest number of subscribers then any other country but that does not mean the country you are in does not hold potential. So if you are in startup mode look at your roadmap and include some sort of mobile revenue model in that.

Captains Log: Wednesday 27 August 2008

So you have built your product and want to get maximum exposure for it, you want to have a brand that everyone remembers , similar to the way everyone associates search to Google.

Building a brand is hard work with no guarentees that you will reach your target audience. There is a fine line between creating a quality brand and a worthless one. Your brand strategy will also determine your pricing point for your product.Think of it like this , the cost to manufacture a Gucci bag and the retail price has no correlation to it. It purely comes down to how you associate to the brand. They have also spent a ton of money to build the brand ,which you don’t have.

Here are some points to think about when branding product:

1. Your target audience

2. Product price point

3. Potential size of your market

4. Growth of the brand

5. Customer loyalty to the brand

These are fairly important as it will determine at what cost you launch your product and how you determine the price increase of the product. This will determine your profit margins and ultimate growth of the product in that space. We also need to keep in mind that this not as easy as it seems. If you want to play in the high end niche or general space you need to keep in mind the barrier to enter that space and understand the buying patterns of the consumer in that space. Also what makes your product standout against others already playing in that space.

For my startup I will be focusing on all the above issues as I need to figure all the following out myself.