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Be aware of newest trends; Pick a business model with legs; Find a big market
Startups today, said Mike McCue, are very different than what they used to be when he was the CEO of TellMe, a company that he sold to Microsoft for just under $1 billion in 2007. It used to be that if you were the chief executive of a Web startup, you had to raise vast sums of money just to get your business off the ground. These days, entrepreneurs can leverage platforms like Amazon to deploy their product in the cloud, iterate, and ship it out quickly.
"It requires far less capital to fund a startup now than it did before," he told me in our interview at the Flipboard office in Palo Alto.
With TellMe, for example, McCue said that it was like launching a space shuttle: you have everything in place and ready to go, and then you push the button and pray that it does well. If it doesn't...that's it. Game over. But with Flipboard, he said, it's more like Lewis and Clark venturing out into a new territory with a canoe and some supplies. "You don't know where you're going to go, you just have to be nimble enough to navigate."
Some other lessons that McCue learned along the way:
1) "When you see a parade, jump in front of it." In other words, be aware of the newest trends and find a strategic opportunity to jump to the front.
2) It's got to be a huge opportunity. If you're going to go through the trouble of starting a company, said McCue, you should aim for the biggest opportunity you can think of. A lot of entrepreneurs think it's safer to stick with something small that won't be as much of a risk, said McCue, but ultimately, you're putting the same amount of human power into the project.
3) Pick a business model that has legs. Don't go into your new company thinking that you can make money seven different ways, and then try to pursue all of those different money-making channels at once. "Just because you can make money doing something doesn't mean you should," said McCue. The product and the business model should work hand-in-hand, he added.
4) If you're going to focus on one thing, make sure it's a "hot" thing. McCue used the iPad as an example. It's the next huge thing and it makes it much easier to get noticed.
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