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Tuesday, October 17, 2006

The Magic Called Startups

Paul Graham finds that not trying hard enough could be the only reason why startups fail. Most startups fail because they don't make something people want, and the reason most don't is that they don't try hard enough. He lists amongst other things, traps that need to be avoided : The Single founder syndrome, choice of location, marginal niche, idea imitations, obstinacy, raising little money, spending too much, Poor investor management , Founder fights , Insincere and half hearted attempts. Poor programmers, wrong choice of platform, slowness in launching, early launch, no defined customer base etc.. In today's world as he sees it, success may flow from not ducking key principles like focus on custmer success. He adds,“The companies that win are the ones that put users first. Google, for example. They made search work, then worried about how to make money from it. And yet some startup founders still think it's irresponsible not to focus on the business model from the beginning. They're often encouraged in this by investors whose experience comes from less malleable industries.It is irresponsible not to think about business models. It's just ten times more irresponsible not to think about the product”

As I see it,startups are very essential for the growth of the business ecosystem. By definition, startups have a different velocity, rhythm and in the course of its growth, may have to make multiple decisions – therefore the team matters a lot. Funding is not the be all and end all - while it is certainly the NO.1 issue in any stratup, the execution strength, speed and innovation would matter a lot more.Bigger organizations could do with more heterogeneity and capability spread in a wide band but startups are different. As the Friendster story shows, execution strength, sense of timing and exit strategies would be very important. Clearly all through, key people in startups need to stay hungry and foolish.I think clarity of idea, robust business model, flawless execution, customer and market focus, constantly reprioritizing and realigning , transparency, clear thinking, quick decision making, retaining the risk propensity, growth focus, full involvement and a bias for action amongst the founders and key employees all would make the difference between winners and wannabe’s.

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Sadagopan's Weblog on Emerging Technologies, Trends,Thoughts, Ideas & Cyberworld
"All views expressed are my personal views are not related in any way to my employer"