Manifesto for web startup entrepreneurs

I’m going to apologise up front. These aren’t all original thoughts – are original thoughts still possible? I read voraciously online and I am pretty convinced that all that reading has helped inform this list. And no, I’m not going to get into the semantics about exactly what a “startup” is right now.

1. Think global

You are not going to become rich building an online business solely focused on the South African market. Read that again. You will not become rich. Despite what you think now, in order to become wildly successful, you have to build an online business that can scale globally. Sure, there are some advantages being based here – good quality of life, cheap skills relative to the US and UK.

Look around at the obvious success stories:

• Thawte
• Yola

And the not so obvious (and still nascent) ones…

• WooThemes
• Obox
• Travelstart

None of these are focussed only on South Africa. The local market is too small, and always will be when compared to the rest of the world. There has to be a roadmap beyond South Africa, even if it’s into the UK or (English-speaking) Africa and the Middle East – both fairly logical next steps when you think about it.

2. Worship your users

Your users are everything. The recent firestorm over Facebook’s privacy issues is a great manifestation of what happens when you don’t worship your users. From the day someone uses your product or service, you should be hell-bent on keeping that user or getting him/her to come back. It’s cheaper, and a lot less effort, to keep users rather than trying to attract new users.

3. To hell with your users

You’re jealously protective over your users and will do anything to keep them. But, in terms of your actual product or service, to hell with them! Balancing these two is one of the most difficult things to do in a web startup environment.

This concept was dragged into the spotlight again recently, in a TechCrunch post by Mike Arrington about Digg. “Some of the best product advice I’ve ever heard goes something like ‘damn what the users want, charge towards your dream’.”

Arrington went on to say that: “Product should be a dictatorship. Not consensus-driven. There are casualties. Hurt feelings. Angry users. But all of those things are necessary if you’re going to create something unique. The iPhone is clearly a vision of a single core team, or maybe even one man. It happened to be a good dream, and that device now dominates smartphone culture. But it is extremely unlikely Apple would have ever built it if they conducted lots of focus groups and customer outreach first. No keyboard? Please.”

4. Iterate like crazy

Launch with something (anything!). Don’t try to build the entire thing and then launch. You end up with something like Gaudi’s Sagrada Familia – unfinished despite him devoting his last 15 years on earth to the cathedral. You will give up (or die) if you try to build the whole thing before launching. Take your idea and slim it down to its most basic elements, and then layer iteration after iteration on top of that. And don’t become overwhelmed with a massive whiteboard of iterations and too much planning. Break it all up into fortnightly or monthly sprints (depending on how big your team – and project – is) and iterate, iterate and iterate. This also helps to keep your users coming back for more.

5. Find a strong number two

You’re not going to do it alone. And if you do, hats off to you. We all need support/prompting – call it what you want. Find a partner to start with. It might be your first employee, a junior partner, or a proper equity partner. It’s critical to have that second opinion on things. You’ll need their support when you’re about to give up. And you’ll be able to keep each other on your toes.

6. Get out there and network

Tell people your idea. So many of us are guilty of not doing this… What if someone else ‘copies’ it – that’s the inbuilt human paranoia speaking. You’d be surprised how much better your idea/product/service will become by having a few conversations with people about it.

There’s no better proof for this than an afternoon I spent in Barcelona, walking around with someone I didn’t really know all that well. We could (and still can) build the ambitious idea that the two of us came up with, while just walking around and talking.

There are a good few networking options, the 27 Dinners, Silicon Cape, and events like NetProphet. And don’t be scared to email experienced entrepreneurs in the space to ask for help, opinion, or a reference.

7. Show me the money

Don’t fall into the “build it and they will come” trap. There has to be a path to revenue. And a route to profitability. Chances are that Google/Yahoo/Facebook/Apple are not going to rock up and buy your business with a few million users and very little revenue. Yes, those companies do acquire and will keep on acquiring, but for every one startup that is bought, hundreds (if not thousands) aren’t.

You need to know how you’re going to make money. Ideally, you need to know when you’re going to start making money too. Never forget that cash is king.

8. Be greedy

Until your business is making money (and a profit), your equity is the most important thing you have. Don’t surrender it easily. And trust me, you’ll never ever really want to be in a situation where you have less than 51% of the business. Rather bootstrap like mad and be as lean as possible to keep control and reach profitability. Find creative ways of raising funding, and for incentivising staff.

If you’re becoming a decent size business and you need to sell equity, split your stock structure (a la Facebook/Google/Washington Post) to have the best of both worlds. You stay in control through preference shares, and you can use common stock for deals/incentives/options. As the owner(s), your equity is gold.

9. Design like you mean it

I’m obviously biased, thanks to a degree in design. But there’s no point in building and then launching something that doesn’t look good. But design is not only about “looking good”, it’s also about function or “working good”. Interrogate every screen, every icon, every colour, every form, every font. Every single thing needs to belong there. If it doesn’t, lose it. And if you don’t have the skills internally, pay for them.

And before anyone accuses me of being a hypocrite (“He hasn’t started a web business”), my idea has recently taken shape. I’ve finally found the right partner to start it with. I’ve had dozens of ideas over the past few years, and have deliberately chosen this one, not only because it has the best chance of succeeding, but also because it doesn’t at all interfere with my day job. You’ll hear about it soon ☺