How to Build a Web 2.0 Technology Startup

I find this pithy artical on net. Its quite relevent and to the point.

The recent wave of Web 2.0 technology products is an indicator of today’s entrepreneurial vitality. Log onto Techcrunch, and you’ll likely see new several startups forming every day. Yet, there’s one continual theme you notice in every Web 2.0 startup: most technology startups haven’t opened their doors for the public.

Worse, grand opening announcements won’t come until several months later–if even that.
The problem with starting late? It delays those Web 2.0 startup companies from laying firm foundations for their companies. No, not their products, but the intangibles: professional connections, public inquiries, media relations, and whatnot. Most importantly, it stalls cultivating relationships with initial customers.

What should you do if you’re starting a Web 2.0 technology startup? If you’re planning on building an actual business, and not just selling out a product, here’s what we recommend:

Seek passion first. Profits, second.

Stop what you’re doing (or what you plan to do). Are you passionate about it? Do you live and breathe the idea, as if you were born to do it? It’s not just an opportunity, is it? The biggest crime we see entrepreneurs make involves jumping from opportunity to opportunity, thinking the next great idea exists in a specific industry. Then they fall prey to what we see as the entrepreneurial trap: they jump shark to the next “great” opportunity. Who can blame them? Sophomoric business books flaunt market opportunity.

Here’s two reasons why that’s total BS: First, what if a “greater” opportunity comes up afterward? You know it’ll happen. Will you jump shark? Probably.

Second: jumping from the next “great opportunity” will never augment your strengths. You’ll continually go to and fro, never finding a clear sense of direction, never building on top of the foundation you’ve pieced together. Instead, you’ll be like a bungling contractor — having good skills in various areas, but never seeking greatness.

Greatness lies not in finding and profiting from a great opportunity. Greatness lies in continually, repeatedly, and consistently enhancing your strenghts.

Michael Jordan wouldn’t be the most envious athlete if he had jumped over to Boxing in the 70s, Roller Derby in the 80s, Indy Racing in the 90s, and Poker in the 2000s. You shouldn’t jump at the next great opportunity as well.

Instead do this: Where does your passion lie? After living a good number of decades on this planet, a passion of some sort is already ingrained in you. Cultivate it.
Once you seek your passion, you’ll find new and greater opportunities popping up. Paradox indeed. Harvard’s Amar Bhide contends about successful startups: “once they are in the flow of business, opportunities often turn up that they would not have seen had they waited for the big idea.”

If you’re not passionate about what you do, you’re in the wrong line of business.
First, find your passion. Then, start building.

Start early. Get something out.

Once you find your passion, do something that relates to it that can give you good and steady cash flow.
Forget business plans. Forget finding the “perfect” idea. Instead, see cashflow as the king of your new Web 2.0 company. It’s your startup’s blood, and only source for survival. Most startups forget this. They believe they’ll wait until their final product comes to fruition, and then reap rewards.

The brutal facts? It’s far less than 5% likely that the product will achieve what the founder envisioned. Most startup businesses that succeeded, as a Harvard study indicates, didn’t leave all their eggs in one basket. Instead, they experimented with smaller projects. Once those succeeded, they exploited the momentum by building higher-cost products. The important cashflow, of course, kept them afloat.

Harvard’s Amar Bhide: “Get operational quickly. Bootstrappers don’t mind starting with a copycat idea targeted to a small market. Often that approach works well. Imitation saves the costs of market research, and the start-up entering a small market is unlikely to face competition from large, established companies.”

Forget being perfect.

You will fail. That’s okay. As you’re starting your Web 2.0 Startup, know this: Perfection kills progression. Failures fuel creativity; that is, of course, you don’t give up. Learn to fail. Failing is good. It drives you to understand where possibilities and opportunities exist.
For every major success you see, the media forgot to report the one thousand failures from the same person. While other Web 2.0 entrepreneurs are fearing failures and quitting because of it, you’re not. You see failures as a natural part of building a startup. You see failures as something others don’t: a driver to that next successful product.


If you forget perfection, you’ll open your doors to experimentation — the secret sauce for the most innovative companies. In the business world, you’ll learn that you can’t plan for anything. A million-dollar idea (in your mind, anyway) could very well bomb.

Media reports hailed the Segway as the next great thing. It was supposed to transform roads. It didn’t. It sucked, and venture capitalists no doubt regret their blunders. On the flipside, an invention appearing out of the blue might — just — net you a million dollars. Think eBay, Yahoo, Google, etc. etc.. The point? Ideas aren’t formed from thoughtful analysis. It’s formed from experimenting, and trying different things.

Learn to use the law of probability to help you.
Say one product has a 10% success rate. Then, getting one success out of two experimental products is 32% (i.e. 10% * 10%). Five experiments? 63%. The more you experiment, the greater your chance for success.

Forget product features. Seek purposeful innovation.

Having fun experimenting with all the new Web 2.0 features? Stop! Forget tagging, curvy corners, AJAX and all the other BS just for the sake having them. Just because others are doing it. Just because they say it’s essential for Web 2.0. Just because.
Technology products are built for humans. If you want to build the next great Web 2.0 product, ignore what people are doing on TechCrunch. Instead, spend your time understanding the human brain. Know people’s motivations. Understand their desires.
Abraham Maslow. That’s a start.Once you understand humans, you’ll understand precisely what Web 2.0 features you’ll need for your intended product.You will not see the next great technology company as the most innovative user of Ruby on Rails. Instead, the next great Web 2.0 Technology Startup will understand and cultivate human desires.

Cultivate early customers.

A Web 2.0 Technology Startup without a blog is a startup without a compass. Like Magellan, you’ll need a direction to steer your company. A blog helps you cultivate your first customer relationships, gives you important feedback on product wants/not-wants, and quickens the product development process.
Sure, you can get by without a blog. But, understand that every company needs its early adopters. We’ve found blogs to be the best way of doing that.

Have fun.

Yeah, all too-good-to-be-true success stories tell you to have fun. And, we’re not arguing with that sentiment. We feel entrepreneurs have the most exciting and adventurous career paths. It should also be the most enjoyable.

Please, have fun!

One final thought: In one hundred years, you won’t take your Web 2.0 startup money with you. Start leaving an imprint, a legacy that continually affects and consistently improves the lives of your surrounding communities.
And, world.
Word to your mother.


1 Comment »

  1. Sunny said

    Got to see this article on Web 2.0 & thought of penning down some thoughts on my mind.

    I personally think that Web 2.0 has tremendous potential in India. This statement is not a over-dose of boasting as i strongly believe that there a lot of potential in making our systems go web.

    Be it anything from jobs to house search everything is easy when you have internet. In fact, i got across which seems to be doing the job really well. I am pretty confident that WEb 2.0 will make its mark in India.

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