I hear a lot of stories from people making new things and creating cool digital stuffs an all, which is great. But sometimes they create something just for the sake of creating it, which is still cool. The problem arises when they want to turn their little project into a startup. Doing projects is cool when you want to learn about new stuffs but not all projects are suitable for a startup. Here’s 4 questions that need to be answered before creating any startup.
1. What is the problem you are trying to solve?
Ask yourself this question over and over again. We have enough problems in our life so don’t add another one. Don’t make another social network just because you wanted to make a local social network, don’t make another photo sharing app just because you want to be as successful as Instagram.
CollegeHumor was created to solve the problem of boredom, yes boredom is a problem. Have you ever been bored all day and needed a distraction? There’s CollegeHumor, 9gag and other humor site to distract you and make you less bored.
How about justifying a clone? Molome, a direct clone of Instagram was created because there’s no Instagram for Nokia, Android and Blackberry in which Molome provides.
So what is the problem you are trying to solve?
2. Is the problem big enough?
Are you positively sure that you’re not the only one with that problem? Ask your friends, family and colleague whether they have the problem or not. Heck, ask everyone in twitter if they have the same problem as you are or not. Although this is a bit tricky, sometimes people don’t know what they need. I didn’t know I needed Dropbox until I actually use it. Henry Ford said this once:
If I had asked people what they wanted, they would have said faster horses.
So be sure to ask the right question, Henry Ford answered the need for a faster horse by making cars.
3. Has it been done before?
Did somebody beat you to it? How popular are they now? Fat chance that your idea was already being executed by someone else. If you were to create a photo sharing app for iOS, you can forget about it because Instagram is already too popular. Building it on another platform like Molome would heighten your chances.
Location difference is also a consideration. Let’s say a competing service is popular in the US, then maybe you can start locally and control the local market. Disdus and Dealkeren did this, they adapt the business model of Groupon and implement it in Indonesia. Both of them control a tremendous amount of marketshare that Disdus eventually got bought by Groupon and Dealkeren got bought by Livingsocial.
So don’t give up just because somebody already made it, there’s still chance.
4. How can you make money out of it?
We’re talking about making a business right? Of course there’s money involved. If you don’t want to make any money then it’s not a business, it’s a hobby. But I disgres.
I noticed this problem with Lewatmana.com and infolalulintas.com, they have amazing product and in most cases work well to solve the traffic problem in Jakarta. But the thing is, it’s really hard to monetize. infolalulintas.com haven’t made any money sizeable as far as I know. Lewatmana.com uses camera to detect traffic volumes, you can actually see the live traffic of where you’re going which is uber cool. They’re planning to display a ticker news in the bottom part of the camera and set it as an paid ad display. That may work but the advertising game is a very hard business model to crack. My guess is that the ads won’t be enough to pay the bills.
So plan your business model from day one. You don’t want to be in a position where you need to pay USD 5.000 per month on operational with no actual way of getting any money. Getting money from investors is not a business model you know.
There you have it, Good luck in your new startup!