The Care and Feeding of a HiTech Startup

Posted on July 20, 2008
Filed Under Business, David Waldman, Internet, Israel, economics, high tech, investment, investors, software, technology | Comments Off

These days, when money is tight, when the US dollar seems to be in free fall against the Euro and other currencies, when many companies are downsizing, absorbed by bigger ones, or plain closing shop, anyone seriously contemplating a new startup has some major homework ahead if the idea is ever to come to fruition. Remember, many of the top investors are quite ready to sit out the current business climate. What is so special about your offer, why should they give you their attention and their money?!?!?

I have summarized a few points that are of paramount importance if the new company is to ever become a viable company at all:

1 - A good idea is no longer enough. Many brilliant ones have spectacularly flopped.

2 - Speak to recognized experts to see if the idea is worth marketing. Do not lie to yourself, do not act as if you know better than these experts. Most likely… YOU DON’T!

3 - The name is a major part of marketing the company. Do not rush, consult others and think it over very carefully.

4 - Make sure the name has at least three syllables.

5 – Make sure that you have as many marketing people as software people (or almost as many!).

6 - Make sure product is explainable to dummies in one sentence or less. If it takes longer to explain it is probably too complicated.

7 - Avoid changing the business model in midstream, if at all possible. Do your research, prepare for every eventuality you can think of, work out a business model capable of withstanding the various possibilities.

8 - Have something in the company assets that makes some money almost right away (it will relieve pressure, at least psychologically).

9 - Listen to the people you hire (especially marketing people) or don’t hire them at all! Remember, you hire people because of their expertise, because of what each can contribute to the new company’s success. You can’t do it alone, and certainly do not have all the needed knowledge and skills by yourself.

10 - Make sure your website is fully functional, before launching, do not launch an idea before the site looks presentable and all the links and presentation materials work well!

While those listed are the main points, there are other, very subtle, points as important as the ones listed here. Make sure the key players have a proper working environment so as to be able to concentrate and properly fulfill their duties. Whatever you do, do NOT cut salaries! Fire people if you must but never cut salaries, it’s a time tested recipe for a company’s demise.

David Waldman

[David Waldman is the marketing director of an Israeli startup that has developed a search channel]

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