Archive for the ‘Startup Tips’ Category

Startup Advice for Entrepreneurs

May 5th, 2010

Collected Advice
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These points may come across as basic, but these are the small points one should keep in mind when launching a startup;

1.Start by thinking small and extend your thinking from there. Small and simple thinking will allow you to concentrate on what is important

2.Higher good coders/technical people in every department 3.Financial reward is good, but aspiring entrepreneurs should first look out for opportunities where thy can learn. Allow employees to take on projects even if they don’t have the qualifications.

4.Don’t manage profit, but cash flow. Money in and money out should be the only two financial yardsticks that matter.

5.Perfection is the enemy of success (incase of startups). Speed is better than perfection.

6.Sell, sell and sell. Selling to everyone including business world, employees and suppliers. Sell yourself, sell your product, have a sales professional in your team.

7.Start NOW. Don’t wait.

Exit Strategies for Startups

April 20th, 2010

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A heated debate is taking place around Foursquare considering a sale to Yahoo. It is believed that Foursquare is in the midst of an aggressive courtship on behalf of Yahoo, who is willing to pay as much as $125 million for the year old startup. Some are freaking out asking Foursquare ‘not to sell’ and the gurus are speculating that Foursquare is trying to push its valuation higher than what Yahoo is offering. What Foursquare does, only time with tell, but this has definitely made me think about ‘exit strategies’ for startups and the importance of having one.

When you are starting up or as you form strategies and plans to grow your startup, you need to think about an exit strategy. Will you establish a lifestyle business that generates income without plans of selling it in the future, or will you build equity in a business that you will convert into cash? Depending on your goal, the business you choose and the way you decide to grow it should be aligned with the end-game objectives. The common exit strategies are; sale, mergers, IPO, buyout or liquidation of assets.

Some may not find laying too much importance of exit strategies as correct, arguing that you will never want to build something by always having a motive of leaving. But whether you want to move on to you next entrepreneurship venture or whether you stick to a business plan for a long time, it is important to have a succession plan in place for your startup.

We suggest you read this post at ReadWriteWeb for more information.

While the idea of an exit strategy might sound negative, crafting one can help you plan how to make the most out of a good situation, not simply escape a bad one

Startups and Ethics

March 23rd, 2010

summer reading
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“Ethics” or “Business Ethics” can be defined as written and unwritten codes of principles and values that should govern decisions and actions within a company. In the most basic terms, I would like to describe business ethics as to knowing the difference between right and wrong and choosing to do what is ‘right’. The phrase “business ethics” applies to actions of individuals within the company, as well as the company on the whole.

I believe not only in business, but in life in general, you only win by doing what is right. When I say “win”, it’s not all about money. It also includes being able to sleep at night by knowing you did the right thing. I am sure many of us know people who are just rich but aren’t happy.

Ethics should be integrated in a startup as soon as it starts its operations. You cannot start worrying about ethics when your company reaches a certain size; they need to be sewn into the fabric of a startup. This lesson is the same for tech businesses, as for investment banks, developed economies or third-world countries.

Ideally, all of the above sounds absolutely righteous, but does it hold well in real life? Things can’t be perfect to be honest, but at least we can try doing the right thing. Your company should have a strong sense of perfect. Companies are like people, they can’t be perfect, but when the moral is high, they achieve long-term success (think of Google).

Here are a few tips to build ethics in your startups;

1. Lead by example – Ethics should flow from the top to the bottom of an organization. The authencity of the leader’s actions and character is essential.

2. Create a culture of openness – Internal criticism (constructive) and dissent should be welcomed. People just agreeing with you all the time without any feedback are not good for a startup.

3.  Learn from people or distant models – May be your technological mission or business is truly unique but the leadership values aren’t unique. Steve jobs of Apple portrays himself after the founder of Polaroid Ed Land and tries to learn from both his strengths and weaknesses. It is important to learn from everyone.

4. Remember that character of your startup once lost is not only hard but impossible to regain

5. Don’t be scared of leadership succession. Founders of all great firms have known that they can’t forever be the leaders and one day they will need to find successors.

In business you have to make tough choices every now and then. Every decision has clear consequences and outcomes but ethical decisions are always hard. Probably making the right choice won’t always bring success, but ethical lapses always lead to failure.

To get more insight to this matter, we suggest you read this absolutely wonderful post written by Vivek Wadhwa in TechCrunch

The silencing of employees who sought to challenge strategy and risk-management practices likely also undermined the banks’ moral authority and emboldened those who already felt inclined to do the wrong thing. With a muted internal voice, these organizations lacked a moral compass

The Startup Visa Act

March 15th, 2010

Unshaven Melancholy
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A bill* was introduced in the Senate (USA) on the 24th February 2010 proposing a new type of visa for immigrants who create startups and jobs in the U.S.

*The Startup Visa Act of 2010 will crate a two year visa for immigrant entrepreneurs who are able to raise a minimum of $250,000 (with $100,000 coming from a qualified venture investor or U.S. angel). After the two years, if the immigrant entrepreneur is able to create five or more jobs (not including spouse or children), attract $1 million more in investment, or produce $1 million in revenue, he or she will become a legal resident of the United States of America.

The introduction of this bill is the result of a blog post written by Paul Graham in April 2009 (one of the partners at Y Combinator). In the post, titled “The Founder Visa,” Paul explained that foreign-born students who graduate from a U.S. university can’t stay back in the U.S. to start a company. This post was passed around by bloggers, entrepreneurs and venture industry veterans until it was turned into a savvy social media campaign (including twitter, Facebook, YouTube etc). And the result is in front of us today, the campaign was a success and the bill was introduced a few days ago.

The message associated with the bill is quite straightforward – create jobs and get a green card. Even if the bill passed it isn’t going to attract a herd of entrepreneurs’ right way. It will eventually gain momentum. U.S. is welcoming entrepreneurs from outside the United States, and is promoting ideas and startups.

An interesting discussion is going on in this forum regarding the pros and cons of the bill.

Personally, I believe it’s a strategically well thought decision that would ease out rules and allow entrepreneurs all over the world to harvest their ideas in the technological hub of the world, and besides beneficial for the U.S. as well in terms of employment, innovation and growth.

For more information on this, we suggest you visit TechCrunch

Startup raises $10 million for Apache Search Technology

March 11th, 2010

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Lucid Imagination – the startup launched in 2009 which distributes Apache Lucene and Apache Solr search technology announced that it has raised $10 million in venture capital funding (completes its Series B round) with existing investors Granite Ventures and Walden International and new participation from Shasta Ventures.

The startup is the commercial entity for Lucene/Solr and it offers a broad portfolio of software and service solutions. It offers differentiated search for organizations across a wide range of sectors including Web 2.0, media, telecommunications, government etc. Its customers include Nike, Ford, Zappos, eBay, Ford, Cisco and many others.

Funding will be used to accelerate readiness and adoption of Lucene/Solr search technology. It had a total funding of $6 million before this and after this deal the company’s total funding comes up to $16 million.

A startup which is in its second year is seeing revenue in millions and counts Google’s enterprise search as its direct competitor.

This is definitely great news! Congratulations to Lucid Imagination. A good source of motivation and inspiration for startups

You can visit TechCrunch for a detailed description:

the startup that commercially distributes the open source Apache Lucene and Apache Solr search technology, has raised $10 million in Series B funding from

How Startups are Coping with Data Flood

March 10th, 2010

What do they compute at Night ?
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Data of all kind is being increasingly accumulated on the web by millions of people who are embracing ‘technology’ and new style of working.

Unlimited data is virtually stored on the internet and with the rise of Web 2.0 services such as social networking, blogging, cloud computing etc companies have started to struggle in coping up with costly and complex networks of server computers.

Many tech startup founders believe that they have ‘almost’ reached breaking point. Companies don’t really have the money to keep buying servers, hire people to manage them or build huge facilities to keep, power and cool them.

Startup companies have found out ways to deal with this issue. Server efficiency has definitely and massively increased with virtualization of data but tech companies are still finding ways to make this better. Various methods are adopted by tech companies to reduce the number of servers and increase their efficiency. For example; using flash memory instead of traditional spinning (the way songs are stored in iPods) is one of the methods used by Fusion-io Inc

While some companies focus on server efficiency, others concentrate on networking gears that moves data from one machine to another. Datacenters need better quality and faster networks which can handle over-burdened servers.

Companies are also looking out for ways on how to structure the vast amount of data and figuring out ways in which they can used more effectively by businesses and consumers. Restructuring data, providing information and changing the database architecture is the next target market for tech startups.

For more information on how startups are coping up and taking advantage of the data flood we suggest you read this post on Wall Street Journal

Azul Systems Inc., No. 6, and Schooner Information Technology Inc., No. 34, build specialized servers for specific datacenter software programs, which they say perform significantly better than general-purpose servers.

Popular Facebook Group = Potential Startup?

February 18th, 2010

Atlas, it's time for your bath
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So you create a Facebook Fan Page and have 200,000 fans in two weeks. How do you get the benefit out of this? Well this is a 100 percent opportunity to become an ‘entrepreneur’ (in good faith).

The dilemma is – can a famous Facebook page become a real startup?

We have two kinds of people here;

1.Intentional – who form a Facebook page or open an account with Twitter before launching a website (bona fide startup.

2.Unintentional – who form a Facebook page, get massive number of fans and then decide to launch a website with the same idea

In both cases, the biggest question is whether the popularity of a Facebook Page can be easily harnessed to build a standalone website. The obvious advantage is that Facebook has a huge number of users who are very active (Trust me – Facebook is extremely engaging). If a user becomes a fan of your page, then updates you post on your page will automatically show up in the user’s profile. Building an audience through Facebook is comparatively easier.

Now the problem is that users might be reluctant to visit your website when they can get all updates from Facebook (user friction)

It will be a long way before a Facebook page can turn in to a sustainable and profitable business.

Econsultancy explains the topic elaborately in this post by citing an example of Secret London

As a standalone website, Secret London will have to convince its users to visit and use yet another website. That means far more

PS: My friend launched a Facebook Fan Page yesterday and has above 300 fans already – she is already thinking on the same line

Bringing Startups & Angel Investors together by Venture Hacks

February 10th, 2010

3D Realty Handshake
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Venture Hacks recently launched a new project aiming to bring startups and angel investors closer.

Venture hacks launched
AngelList which is a basic directory of around 80 established angel investors including their contact info and key information like what they’re looking for in a startup etc. The members of AngelList will receive weekly updates from Startuplist (the second project launched by Venture Hacks).

StartupList will be a great boon for all startups looking for angel investors. So if you’re a startup looking for early investment and you have no idea how to get to potential investors then this project is definitely for you. To get on the list you need to apply here.

Venture Hacks will send weekly emails featuring three startup pitches to some of Silicon Valley’s most respected angel investors.

Kudos to Venture Hacks. Great effort and all the best

Common Startup Dilemmas

February 8th, 2010

Question mark
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There are a few ‘best’ questions related to startups which pop up in our mind now and then. Questions such as - when is the best time to startup? Which sector is the best to startup in? Which is best - funding through revenues or investors? In this post we attempt to answer these questions precisely. The post is inspired by a very good article I came across recently.

The Best Time
Anytime is a good time to startup with a slight tilt towards starting up during a recession. And why is that? That is because if you survive turbulent times then you definitely learn how to manage a business given any other time or scenario. The tough times teach you. On the contrary if your startup has flourished because of the boom period then it will be difficult for you to sustain in times of drought.

What do GE, Disney, HP and Microsoft all have in common? They were all startups that took off the ground during steep declines in the U.S economy.

The Best Sector
If we take a close look at all companies today, we will find out most of the companies started as outliers (extreme deviation from what their original idea was) , and then with time grew in mass and had a bunch of companies following them to form a so called ‘best sector’. Was there an aircraft manufacturing sector before a Boeing? Not really. So the tip here is not to worry about the sector, just do your business where you have a sustainable competitive advantage in what you’re offering.

Always keep in mind that investors have different motivations from entrepreneurs. As an entrepreneur, you want to build a company over a long term and as an investor, you want to exit with a good value over the next 7 years (entrepreneurial investors are really rare to find).

Your first option should be getting your funding from customers (revenues i.e.) And if you need outside investors then keep in mind the time frame in which you have to generate real value and a ground-breaking idea that will get you an actual investment. And of course, shape your pitch according to different investors – be a good marketer.

Advice for Startup Entrepreneurs: Block your Lizard Brain

January 29th, 2010

Creative Commons License photo credit: Pardesi*

A very common similarity that I have noticed in human behavior is that ‘we want to do something, but we don’t end up doing it’. I want to have a successful career but I disrupt my interview. I want to be thin but I over eat. I want to excel in my job role but I don’t complete my tasks for the day and so on.

How can the rationale behind this behavior be explained? Seth Godin in his recent post explained the phenomena – why is it so difficult to do what we say we want to do?

Answer: The Lizard Brain (Resistance)

Resistance – The voice at the back of our head telling us to go slow, not take risk, compromise and back off. This resistance grows further as we get closer to an insight – the truth of what we really want. Lizards (a physical part of your brain) hate change, achievement and risk.

An advice to entrepreneurs is to block the lizard brain. Be open to change and development, compromise, have meetings, fear critics, take risks and pacify the lizard.

The lizard brain is here to stay – it’s your job to figure out how to ignore it

The lizard is a physical part of your brain, the pre-historic lump near the brain stem that is responsible for fear and rage and reproductive drive. Why did the chicken cross the road? Because her lizard brain told her to.