

Don’t Build a Startup, Build a Business - jarederondu
http://theindustry.cc/2012/10/23/dont-build-a-startup-build-a-business/

======
andrew_wc_brown
I've heard this 20 times (Don't Build a Startup, Build a Business), I agree,
but this article is like nodding your head at what you should do, but doesn't
give you any indication to how to actually do it. I agree, lets build
businesses, but how? Exactly how?

These articles should start like this to be of value:

"If you have a startup and you want to turn your business profitable this year
than this is the most important article you will ever read."

"I am going to show you a "special measure of success system" that you can
implement right now to start turning profits this month."

Then you go on to show them \- how to setup kissmetrics to make cohorts and
funnels. \- A formula to calculate your cost per user. \- How to make a
projections spreadsheet. \- Give them a madlib script to use and cold call
until they get 10 people who they think would pay for them service to to
prepay before building anything.

Then you have a summary sheet with a rubic where you ask them questions where
they fill simple answers based on cohorts, cost per user, projections and the
success of the cold calling. That score of the rubic should make it night and
day whether or not there startup will be profitable or not this year.

Thats of use. Make that the article.

~~~
marcedwards
I guess acknowledging the issue is the first step to solving it. “Build a
business” seems like a good message to repeat every now and then, just to make
sure it sticks. I don't like the VC culture of planning for exit, rather than
aiming for success.

I liked the article.

~~~
andrew_wc_brown
There's enough articles that keep repeating the contemplation step. I liked
this kind of article the first time I read it. Don't you agree you want to
read articles that go past the contemplation step and into implementing a plan
to solution?

~~~
saraid216
There are a good number of solid, simple books and 30/60 minute videos on it.
I have no doubt that more are being written as I type this. I can't pull a
list of them out at the moment (I stopped actively working on startups a while
ago, for various reasons, so I no longer keep tabs), but they really can't be
that hard to find.

I remember Art of the Start positively, and I believe Kawasaki says that the
(free and online) talk of the same title has all the same information.
<http://www.youtube.com/watch?v=jSlwuafyUUo>

------
jhartmann
Just my two cents,

I don't know if I agree with the concept that there is a bubble that is just
waiting to burst, but I think focusing on the core of how you will make money
is totally key to any startup's success.

In my mind, you need to figure out first how your startup will not die
(revenues), and once you have established this runway for yourself figure out
how to go up and to the right. I know that is a horrible oversimplification
and like any recipe needs to be adjusted for 'altitude'. I do think to not
tackle these issues early on is just a prescription to give away more of your
company then you probably needed too, and set a dangerous precedent for how
your company views money.

All that being said I don't think that all companies fit into this mold, and
some really need the time to figure things out instead of rushing into a
market and trying to figure out the money side of the equation.

I guess the point of my rambling is that you should sweat about where your
money is coming from as early as possible. To not do so is risky, and your
chance of failure will be high. If you choose to focus on traction first, you
really should have lots of experiments in the pike to figure out how to make
money from those users. Startup's are all about discovery and growth, but in
my opinion revenue and costs should always be near the top of the focuses of
any search for that sustainable business model.

------
lumberjack
But wouldn't it be precipitous to decide whether you are doing a Startup or a
Business before you even start?

Wouldn't a Startup that managed to find an optimal recurring revenue model
become a business? If you were the CEO of said Startup wouldn't you implement
such revenue model? So given a choice, wouldn't every Startup become a
business?

~~~
freshhawk
You make a lot of core business decisions based on whether you are swinging
for the fences or building a business from the beginning, you can pretend not
to decide but nearly every decision you make at the beginning of a startup is
based on this choice.

You can pivot of course, if you stumble on a great revenue source that's small
in scale but growing steadily and you aren't getting crazy traction then a
startup probably would become a business. But there are legitimate reasons to
not become a business and keep chasing the big payout.

In real life you don't find the optimal recurring revenue model, you find
options with tradeoffs.

