If you traveled off planet in 1999 and just returned, you might think that nothing has changed in the world of internet start-ups. There’s tons of money chasing a few big ideas, incubators and Angel’s galore, and a whole service economy of lawyers, accountants, consultants, advertising agencies, media and monetization programs.
Every Tom, Dick, and Aunt Mary wants to do a start-up instead of buying a lottery ticket.
What has changed is the speed and quality of these new ventures. The LAMP ecosystem (Linux, Apache, MySQL, and Perl/Python programming languages), instant on, auto-scaling cloud-based resources, plus myriad APIs have given new meaning to “demo or die” and credence to a strategy of “fast fail.”
As a seasoned entrepreneur, banker, venture capitalist, and consultant over the past 20 years, I believe these 5 P’s illuminate the common roadmap.
Prototyping, the first step, is by far and away the most fun and interesting because it includes two other P’s: Possibilities & Potential. There are fewer great words of motivation and inspiration than: “that’s interesting, we can do it.”
Hand in glove with Prototyping is Presentation. An idea not shared is like kissing in the dark, where you and your partner know it but nobody else does. Presentations may be informal to friends and family, and formal in a fund raising pitch, but regardless, you need to make the idea real and alive: more than one business has succeeded from the promise in a prototype, long before customers or revenue.
Promotion is the next phase and it covers many other concepts, like defining customer benefits, social sharing, scaling and distribution, pricing and momentum. A recent study published by Adeven reported that 400,000 iTune apps (about 65%) were “zombies” and never downloaded.
Promotion quality and strength is what set the vast majority of start-ups apart as successes vs. failures.
The next P is a sad one, but all too common for the vast majority of ventures, and it’s about Pleading, which is sometime connected to or confused with Praying. Most of the glow from possibilities & potential has been crushed into the three practical Ps of daily matters: payroll, personnel, and predators.
In many cases, the founders and start-up team are stretched to the limit as new capital is slow to come in, and the promotion fuel tanks run low. This is also when predators appear on the landscape to poach your idea, your staff, and your customers, so new distractions and scarce resources are allocated to defending your space, instead of growing it.
Hopefully, your investors are understanding at this point and have given you enough runway to get to the next stage: Performance.
Performance is that well oiled machine that makes you money while you sleep, where you have fans doing the promotion for you, and where you can get back to Possibilities & Potential for the new innovation of your product/service to grow faster and bigger.
There are even more P’s to explore, but no matter what, don’t fall prey to the worse P: Procrastination. Get some swoosh on and just do it.