Wednesday
Tips/AdviceDon’t Be Like the Underpants Gnomes
Remember that South Park episode? The one where little gnomes would steal people’s underpants in order to somehow profit off of them? If you don’t, check this out:
Does their business plan sound familiar? Because, when I watched this video, I was instantly reminded of the holly grail of Web 2.0 business plans:
Step 1: Get a lot of users.
Step 2: Wild dreams about monetizing those users.
Step 3: Profiting from those users using your alchemy-like method of monetization.
Do you notice anything wrong with that? If you don’t, then you’re doomed (or poised to create the next Facebook). Web 2.0 startups are lacking the “how-to-make-money” approach to business. Businesses are about making money. If you don’t make money, then you don’t have a business, you have a cash eating, resource hogging machine.
What should you do when thinking of a startup? Here’s my take:
Step 1: Think of an idea that you think (or know) that can be monetized in the future. Even if you don’t know exactly how to do it, think of something better than “I’ll just get a lot of users”.
Step 2: Let your startup grow, and do the numbers to see when you’re going to NEED to be profitable. If it gets out of control, it might cost you a lot of money every month just to keep the thing running. Does that sound like a good business?
Step 3: Profit your ass off. After you do this, then you can retire to your very own Caribbean island and watch South Park all day.
Post Tags: gnomes, southpark, startup, tips, underpants
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