Do you think your startup has what it takes to become the next Facebook? Here are the top 10 reasons your startup does not have what it takes to become the next Facebook:
1. First Startup Venture - If this is your first startup then the odds are against you for long term success. Even Mark Zuckerberg, Founder of Facebook, built and released the Synapse Media Player while he was in high school. There is just so much to learn when launching your first startup that it is highly unlikely that your very first business goes on to be a Facebook-like success story.
2. Work Part-Time on Startup - Most startups begin as a nights and weekends project that only becomes a full-time job if it starts to gain some traction. The problem is that in order to build a truly world changing startup you are going to have to dedicate yourself fully to the business. You are likely to miss the opportunity by taking it too slow as a nights and weekends project.
3. Startup is not Web-Based - The only type of startup in 2011 that has Facebook potential is a web-based startup. Product based startups, new restaurants or retail stores can be wildly successful, but in order to generate the type of user adoption that Facebook saw you need the ability to go viral, and this can really only happen on the web.
4. Lack of Cash to Bootstrap - Many successful startups have launched and built their business without major outside capital, but in order to build a company that can scale like a Twitter or Facebook you need some cash in the bank. No matter how low you keep expenses you will still have costs for servers, hosting, and employees. If you just need capital to kick start your company then I recommend that you check out FundingUniverse. They claim that they are the best in the world at matching entrepreneurs with appropriate sources of capital.
5. Inflexible Business Plan - There is so much hype about writing a business plan before you start a business these days, but in most startups your business plan will change every other day. There is nothing wrong about writing a business plan before you launch, but you need to be willing to change at a moments notice. One great tool for writing a fluid and changing business plan is Funding Roadmap, which is an incredible innovation in the business plan writing industry.
6. Business Structure Issues - If you want to be able to apply for and accept outside investment from Angel Investors or Venture Capitalists you will need to structure your business as a Corporation. Typically investors will not even consider investing in partnerships or LLCs because they are far too limited.
7. No Identified Market - Focusing on a single niche market is a major key to success for a startup. Consider that Facebook started as a website for Harvard University students. Talk about a narrow niche, that is now used by over half a billion people. Dominate one niche first and other opportunities will certainly be presented.
8. Starting Solo - I would strongly suggest that you find a partner that can compliment your strengths and buy in to your vision for the company. If you are required to be the lead engineer, the CFO, the Director of Marketing, and the Customer Service department you will be forced to work in areas of weakness. If you can find a partner that is strong where you are weak, your operations will run much smoother, and you will be far more attractive to potential investors.
9. Dedicated to Family - It is so great to have support from your family when you are working to build a startup, but in order to create a startup company with the power of Facebook, you will need to be insanely dedicated to your business. The college age guy with no responsibilities, no wife to support, no kids to put through college, has a real advantage when it comes to starting a new business. If you need to stay up for 36 hours straight to program, you can. Don’t leave your family if you have one, I am simply pointing out the advantages that someone without responsibilities has when launching a new business.
10. Holding Company Ownership Too Tight - Are you willing to give up ownership in your company? This really gets back to the old question, “Would you rather have 100% of $100,000 or 10% of $100,000,000?” In order to make it big in business you need to be willing to give up ownership in order to raise capital, bring in talented employees, etc.
If you think your startup has “Facebook Potential,” then give this free quiz a try, “Is Your Startup the Next Facebook?”