Often when I meet someone that has an idea for a web business they want to get started immediately working with a designer or developer. I usually suggest that the person spend more time planning in the beginning. They need to focus on the many questions that will help them outline the project before diving in.
Below are 6 important questions that I think everyone should ask themselves before making the decision to launch a web business.
How will you get your first round of customers? Do you have customers in mind already?
Before thinking about building the project you have to consider how you’ll actually get people to use it once it’s live. Even if you are building the most important application of the 21st Century people won’t simply flock to it by nature. You need marketing campaigns that will educate your audience and drive traffic.
How will you get their attention? How will you stand out in the market? Do you have the skills to do this? Do you feel confident that on your own you can figure out how to gain customers?
If you have customers in mind already, you might benefit from working with them from the beginning. Using the LEAN Startup approach has proven to be very successful. If your not familiar with LEAN check out “LEAN Starup” by Eric Ries. The gist is to build a “minimum viable product” (something small but working) and hand it over to a customer for them to begin using. As they give you feedback you continue to improve the product based on their universal needs (things that all customers will need and or desire). Basically you are building the product to the specifications that your customer tells you are required. Then when it’s 100% you can start selling it to other customers. There are many benefits of doing this with one ore more customers.
What skills do you have that can be applied to the business and what do you need to outsource?
Now it’s time to be honest about what you can and what you can not do. If you are a mediocre developer, is it best to build something that may need to be rebuilt later, or is it best to hire an excellent developer now to get the job done? Can you effectively manage this project or do you need to hire someone that’s been through this before? Don’t lie to yourself. I’m all for being ambitious and taking on responsibility. Even taking on excessive responsibility can be admirable as long as you are capable of executing as this role. But don’t try to convince yourself that your a “INSERT ROLE” expert if in fact you’re not.
Do you intend on selling the company? Or will you run this business till it dies?
This is an important question to ask for several reasons. Some decisions you make from the very beginning should be based around your end-goal. If you are planning to build the company to sell, not only do you need to build something that customers want, you need to build something that a potential buyer would want. For instance, if you are planning to build to sell you’d want the web application to be built in a common and popular language like Ruby, Python or PHP. It’s not a good time to experiment with new frameworks or languages.
However, if you are planning to hold the company for as long as possible, then the focus is to get the product to market as quickly and inexpensively as possible so you can begin making a profit. Just be frugal and not cheap. There’s nothing worse than maintaining a terribly written legacy system that can’t scale.
Is there a need and desire for this product in the marketplace?
Another question to be honest with yourself about. If you are going to invest your time and money into this project, you’d better be certain that people will want to buy it. This is another good reason to have an initial customer and utilize the LEAN Startup approach.
What percentage of the company would you be willing to give up to bring it to life?
If you go the route of sharing ownership either with your investors or team members how much are you willing to give up. You want to avoid giving up more than 50% of the company so you can maintain control, but if you are going to get sweat equity investors to dump thousands of hours into this project you should be prepared to give up a good portion of that other 50%. If that sounds like a bad idea to you, then you need to start looking at what other resources you can gather to simply hire your team.
What defines success and failure
Make sure that you understand what your definition of project success is. You need to set goals and milestones for the project and analyze how the project is doing over time. If you want to have 20 customers and generating $20k in monthly revenue by month 18 but only have 10 customers that are generating $2500 in monthly revenue by that time is a sign that the project is failing? Or was it just poor planning and/or execution.
Having answers to these questions from the beginning is incredibly helpful. Later, when working knee deep in the project you will be so focused on the next round of features that you may lose sight of the business goals. The answers to these questions will keep you in check and will serve as great signals as to whether you should keep going, pivot, or close up shop.
Leave a comment
- Are there other questions you ask yourself before getting started?
- What are some other things to think about before diving in?
- Do you read this and have further advice for folks about to launch a new project?
Leave your comments below. It’s great to keep the conversation going about these kinds of topics.
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