May 19, 2010 at 13:30IT startup notes
Who is interested in IT startups?
Formally, almost everything - the state, investment funds, graduates of physics and mathematics universities, customers who do not want to pay crazy money for IT projects in giga companies.
In fact, we see a huge number of new IT companies, with different scales (depending on the volume of investments) starting, but rarely achieving results. And even the most successful projects obviously achieve less financially significant results than construction, trade, work in government agencies, etc. I don’t have clear statistics (yes and no), but decide for yourself when your car parks for 100-150 thousand cu. - What are the first ten professions that come to mind? and ten more? and also ... when the owner of an IT company appears in the list of those who can potentially afford such a machine?
Why so? All solid idiots and do not know how to work? Or are there all the enemies around and do not let the new break through? Mega corporations seized power and crush competitors?
Without pretending to be objective and based on only personal experience (six years at Microsoft, developing an affiliate network + two successful IT startups), I give a top-1 rating of the problems you need to know about:
1) Team. Most large companies take people to low salaries, using their name and potential benefits for the employee (experience in a large company, growth prospects, correct entry in the Trudovik). Therefore, in order to hire really worthwhile professionals in a startup, you will have to pay heavily in comparison with your expectations. Or it’s long and difficult to find not only employees, but also like-minded people, which greatly slows down the hiring process.
2) Starting capital. Initially, it seems that you can start with a table and two chairs. But in fact, it is better to outsource all domestic problems - otherwise at some point you will find that standing in line for the tax you are not making money (and therefore the business is doomed). A lot of things require an initial investment (team, training, branding, office, website, etc.). Without them, the business immediately positions itself as very immature - Customers pay less - more difficult with payback and promotion. IMHO should not start without a million rubles. At a minimum - the ability to earn this same million for a start is a good test before organizing a company.
3) Your knowledge. It requires a terribly rare fusion of IT knowledge (obviously necessary), managerial skills (and there are few such in our camp, in all sectors) and sales (yes, the first commandment is that the director provides most of the sales, it will not work to hire sellers).
4) The idea. Lack of business knowledge often leads to inability to assess the financial prospects of your startup. I saw millions of examples. It seems like people forget the simplest math when they discuss their favorite idea. Consult someone experienced, better from a non-IT business.
5) The will to win. One of the well-known theories of management says that starting any new business at the beginning we “light up” and live on the drive, and then after 3-6 months comes the understanding of the complexity and tediousness of the business we are doing. This period must be experienced, after acquiring the necessary skills, everything will become better. But many companies and ideas burn out precisely in this difficult period.
6) The ability to admit your mistakes. It seems to many that “everything on the map” is wrong and the end is complete, companies are following the initial course no matter what. But in fact, as a result, startups lose their main advantage - mobility and flexibility.
7) Legal insecurity. If you work in the B2B market, then all your customers are larger, sometimes capitally — which binds you hand and foot, since you really cannot afford to sue them. Expect twisting of hands on the part of customers beyond any reasonable options.
8) Growth problems. Are you a great start-up with 5 employees? To become a start-up of 10 employees - all over again, all the problems from scratch. And to manage a company of 50 employees, a completely different mentality and knowledge is needed. Control your growth.
9) Competition. Mostly “unhealthy” - in the market there are a lot of those who “did not succeed” or those who “did not risk it” and if you are successful, you become the target for the attack. Envy is a terrible feeling. Avoid talking about your successes whenever possible.
10) Initially high expectations. Keep in mind that even having built your successful and stable IT business, you will not become a “new Russian with intelligence”. There is no freebie here and if you do not want a major disappointment in the business of your life - do not expect financial results. Interesting work, intelligent people around, innovative solutions, sometimes understanding the benefits of their work to customers. But not money.
Formally, almost everything - the state, investment funds, graduates of physics and mathematics universities, customers who do not want to pay crazy money for IT projects in giga companies.
In fact, we see a huge number of new IT companies, with different scales (depending on the volume of investments) starting, but rarely achieving results. And even the most successful projects obviously achieve less financially significant results than construction, trade, work in government agencies, etc. I don’t have clear statistics (yes and no), but decide for yourself when your car parks for 100-150 thousand cu. - What are the first ten professions that come to mind? and ten more? and also ... when the owner of an IT company appears in the list of those who can potentially afford such a machine?
Why so? All solid idiots and do not know how to work? Or are there all the enemies around and do not let the new break through? Mega corporations seized power and crush competitors?
Without pretending to be objective and based on only personal experience (six years at Microsoft, developing an affiliate network + two successful IT startups), I give a top-1 rating of the problems you need to know about:
1) Team. Most large companies take people to low salaries, using their name and potential benefits for the employee (experience in a large company, growth prospects, correct entry in the Trudovik). Therefore, in order to hire really worthwhile professionals in a startup, you will have to pay heavily in comparison with your expectations. Or it’s long and difficult to find not only employees, but also like-minded people, which greatly slows down the hiring process.
2) Starting capital. Initially, it seems that you can start with a table and two chairs. But in fact, it is better to outsource all domestic problems - otherwise at some point you will find that standing in line for the tax you are not making money (and therefore the business is doomed). A lot of things require an initial investment (team, training, branding, office, website, etc.). Without them, the business immediately positions itself as very immature - Customers pay less - more difficult with payback and promotion. IMHO should not start without a million rubles. At a minimum - the ability to earn this same million for a start is a good test before organizing a company.
3) Your knowledge. It requires a terribly rare fusion of IT knowledge (obviously necessary), managerial skills (and there are few such in our camp, in all sectors) and sales (yes, the first commandment is that the director provides most of the sales, it will not work to hire sellers).
4) The idea. Lack of business knowledge often leads to inability to assess the financial prospects of your startup. I saw millions of examples. It seems like people forget the simplest math when they discuss their favorite idea. Consult someone experienced, better from a non-IT business.
5) The will to win. One of the well-known theories of management says that starting any new business at the beginning we “light up” and live on the drive, and then after 3-6 months comes the understanding of the complexity and tediousness of the business we are doing. This period must be experienced, after acquiring the necessary skills, everything will become better. But many companies and ideas burn out precisely in this difficult period.
6) The ability to admit your mistakes. It seems to many that “everything on the map” is wrong and the end is complete, companies are following the initial course no matter what. But in fact, as a result, startups lose their main advantage - mobility and flexibility.
7) Legal insecurity. If you work in the B2B market, then all your customers are larger, sometimes capitally — which binds you hand and foot, since you really cannot afford to sue them. Expect twisting of hands on the part of customers beyond any reasonable options.
8) Growth problems. Are you a great start-up with 5 employees? To become a start-up of 10 employees - all over again, all the problems from scratch. And to manage a company of 50 employees, a completely different mentality and knowledge is needed. Control your growth.
9) Competition. Mostly “unhealthy” - in the market there are a lot of those who “did not succeed” or those who “did not risk it” and if you are successful, you become the target for the attack. Envy is a terrible feeling. Avoid talking about your successes whenever possible.
10) Initially high expectations. Keep in mind that even having built your successful and stable IT business, you will not become a “new Russian with intelligence”. There is no freebie here and if you do not want a major disappointment in the business of your life - do not expect financial results. Interesting work, intelligent people around, innovative solutions, sometimes understanding the benefits of their work to customers. But not money.