5 Principles of Starting a Web 2.0 Company

Starting a service-based company, especially a Web 2.0 website or 3.0 depending on your site, is far less costly and easy to start then any product-based company. Follow the 5 principles of starting a Web 2.0 company and you’ll be sure to survive the tough water.

1.    Manage expectations: No matter if you are talking to an investor or your team, always make sure that they know what direction you’re taking and how you will get there. “Under-promise and Over-deliver” is a good rule of thumb to help manage expectations and maintain future momentum.

2.    Plan for the worst and hope for the best: Any web implementation or roll out will take much longer than expected PERIOD! If it’s on time, count your blessings and take out the bubbly. Every web project or addition will take much longer due to testing, not enough resources, or simply specifications seem to continuously change as users begin to work with the service. Regardless, make sure that you plan accordingly and understand that things will almost always NOT go according to plan.

3.    Understand your financials: And make sure that you really do! It is extremely important to determine what your revenue sources and expenses are like. If you do not maintain and understand your financials, you’re not running a company but just managing a hobby. Start with your expenses and work your way backward to determine how much and when you need to be making in order to break-even.

4.    Plan to re-forecast every few months: Any projects, plans, or strategy that you have come up WILL change and it might even change more frequently than monthly. The point is to be flexible and understand that things will veer off path but as an Entrepreneur your job is to re-adjust and push forward.  A good rule of thumb is every 3 months, take a look at what you have accomplished or haven’t then place a stake 3 months out and create an action plan of achieving milestones to reach that goal.

5.    Think HUGE! If you’re going to create a web 2.0 / 3.0 / 5.0 company (I think you get the point), make sure that its end result has a HUGE market potential . The concept here is to make that your time, resources, and energy is well spent. Create a test scenario that places the venture to reach 100% (which will never happen) of its projected goals. Once you have done so, really look at if your venture will be making sufficient money to support yourself, co-founders, employee, etc… You don’t have to ramp sales in 1 or 2 years but make sure that the end result is well worth it.

Point of clarification: a Web 2.0 company is your regular brochure wear type website that can create a marketplace where goods/services are bought and/or sold. Vague I know; but that’s because there are thousands of sites such as Woot, TigerDirect, NewEgg, etc… that do so. On the other hand a Web 3.0 in my opinion creates a platform in which users customize, integrate, and  bend the site to accomplish their own personal objective. Examples include iGoogle, Amazon, Ebay, etc…

Regardless of what type of dot com company you're trying to start be sure to think it through and understand the reasoning behind your venture. The longer you wait to plan, the less you will accomplish, and loose your opportunity to claim your space.

Have any other points that can help an Entrepreneur start a web-based venture, please share it below.
 

If you have any other questions, send me an email or post a comment.
Ashkan

Ashkan[at]greenhornconnect[dot]com