I have been thinking recently about startups and the technology and information strategy around startups. This blog post will cover the basics of a startup and my next blog post will cover the information technology structure needed to accompany a successful startup. Technology needs change constantly, and I believe that it is easier than ever to start a new enterprise.
The Three Most Important Components
I believe that the three most important components of a startup are:
- An insanely great idea
- Awesome people
- Enough money to get your idea off the ground
And, of course, a solid business plan, to pull all three of these together.
Great Ideas Are Out There
This is the most important component. Your product or service must be something that customers actually want. There are at least two different types of great ideas. There are those that are disruptive, or completely change the way that we live or do business and those that are innovations and improvements of existing products. An example of a disruption is the smart phone which is several devices all built into one mobile unit. You can talk, chat, e-mail, or browse the web while walking down the street. How cool is that? An example of an innovation is Google. Search engines existed before Google but they improved the process.
The Best People
Surround yourself with smart people who share a passion for your product or service. Involve them from the very start and let them help you formulate the startup plan. Look through your social media contacts to find people that have the time, talent, passion, and energy to help you succeed. After all, you have all those Facebook friends for a reason, right?
There are several ways that you can fund your new endeavor. One way is self- funding which means digging into savings, or by funding the second unit from the first unit’s profit, and so on. This can be a slow process and can deplete your own reserves quickly. The second approach is to use angel investors who can be family members or others willing to put up money in exchange for a share of your success. The third approach is a venture capitalist that can be persuaded to lend you large sums of money to go big. In return for venture capital, however, you often turn over portions of your rights to the idea and to the company.
In my next blog post I will talk about the information technology strategy needed for a startup. What infrastructure do you really need to start a new company and what is the most efficient and cost effective way to get your name, your idea, and your product out in the public eye?
Do you have an insanely great idea that you think others would want? Have you ever thought of going big enough to be able to put that idea into production? What is your biggest obstacle? Let me know your thoughts and ideas.
Kelly Brown is an IT professional, adjunct faculty for the University of Oregon, and academic director of the UO Applied Information Management Master’s Degree Program. He writes about IT and business topics that keep him up at night.