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Top 10 questions to ask yourself before starting an online venture

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So you are on the verge of starting your online venture ? Are you in two minds? Read on..

As you may know, I am currently involved in a start-up in online advertising and content display space. Do you know the questions that I asked myself before going ahead with this startup?

Here are some of the questions I answered before taking the decision. Once the start-up goes online, I will give my answers and reasoning to these questions below.

starting up Questions you should ask

1. Does the online startup have enough audience for it to be successful?

This is the fundamental question that needs an answer. Are there enough people on the internet who are looking for ‘stuff’ that you are offering through your startup? How many other people are offering similar kind of services, why should a user choose you and not your competitor.

2. Is your startup catering to ‘real’ need of people?

According to me this is one of the most important mistakes that online startups make. Considering a feature or ‘good to have’ property to be the need of users. You will see hundreds of online startups who are just a variant of another with an added feature to its own. Unless the user sees a significant value offering by your startup, he is not going to come back. In most cases he will stick to his current set of providers and wait for new features to be added.

3. What is going to be the ultimate goal of your startup?

You need to be very clear about the end goal of your startup. Yes, technology and times change fast and you need to change with them, but, you still need to have a blue print of what your startup is going to offer to it users at a very granular level. Only then can you plan the best way forward.

4. Are you starting just because you can do it?

Believe it or not, this happens with very high frequency. Just because you are a techie and can come up with a online property that is very similar to another successful startup, does not make it a success. Some of you may not agree, but ask yourself, isn’t that the main reason?

5. Have you thought about your competitors?

However confident you may be about your startup, you can never underestimate your competitors. You need to keep a close watch on what competitors are doing and what they have in pipeline and how it is going to affect your startup. Never ignore them.

6. How long can you sustain before you start making any kind of money?

You should take a very pessimistic view about your finances and how long they are going to last. If you think it is going to be 12 months, consider just 6 months of finances and then plan accordingly.

7. What could be the possible reasons for your startup to fail?

List down all the reasons that your startup may fail. This is very important. Again, consider everything that might go wrong. Once you finish making the list, read it twice aloud. If you are still confident about the success – tear the list and never see it again!

8. Do you have a back-up plan?

Think of Plan B first. What is the last resort that you can take if everything goes wrong with your startup.

9. Is the luck on your side?

Even if you have got everything right and do not have little bit of luck on your side, you can fail :)

10. How is your involvement in startup going to affect your family?

Surveys show that entrepreneurs having start-ups spend approx. 60 hours a week working and are thrice as likely to be stressed than normal people. If thats the case, you need to give a serious thought on how it is going to affect your family.

There are tens of other reasons that you should consider like the amount of time you can give to your startup, how it is going to affect your family and others, how are you going to project and market your startup etc. However, the above 10 reasons are the ones that I considered before jumping the startup bandwagon.

It would be great to hear reader’s view on these.

  1. Chandrashekhar says

    Thanks Arun for sharing this information
    I want to know your how was your experience
    and now days hoz its going on

  2. Rakesh says

    can anyone please answer me, wat is the Goverment procedures to start a E-business that is internet business in india. I mean taxations,…..like these, can anyone please suggests me.

  3. Tushar Chothani says

    It looks perfectly well for the begginers like me. I think all the steps, if taken might even bring out some new option to do the business.

    In between, you had asked what the readers will like to see at your trak.in, I would just like to know, if i can earn some extra-bucks working from home for 2 hours daily after my usual chores. And it would be far more better that it does not have any costs invovled, other than internet and time clauses.

    Awaiting to hear from you.
    Regards
    Tushar

  4. Sandeep Balaji says

    Great posts.
    Some of the additional points that i felt the need to consider before launching my start-up (www.Qiu-inc.com):
    1. Overall business model and its long term competitive advantage – I feel this is of high importance especially in the online space
    2. Leadership skills that the founders bring to the table – Management and other relevant experience is bare minimum – How can you go beyond that and motivate just not yourself and the rest of the team you will build
    3. Fear of failure – Its keeps you on your toes and the paranoia drives you to over deliver. I think this is a critical ingredient to any start-up making it big.

    Thanks and Regards,
    Sandeep Balaji
    http://www.Qiu-inc.com

  5. Jay says

    Lets Do It !!!!!!

    This is what the first thing comes to my mind when I read your post.. The idea is very good but you have to think out of the box as you decided to enter in the field that is overflowing with competition. Day in n day out you have new entrants in the market.. So being highly innovative n enthusiastic is the key to such success. However, I just want ask u to be more cautious for the following:
    @ Make strong plans regarding your cash inflows (which will be at the later stage) and outflows. Calculate your pay-off period.
    @ Be sure of your contingency plans.

    You can also take help from a professional incase you want to approach any investor to invest in your business
    I think this can be of some help to you
    Visit: http://www.pitchindia.com

    Wish u luck!!!!!!!!!!!!!!!!!!!

  6. trakin says

    @Sundarram…thanks for your comment and I sure need those forces to be behind me. The frequency of a startup going down are much higer. Do you know what it is…for every 1 successful startup, there are more than 350 that fail….Now, isn’t that alarming…:)
    @Avinash, excellent points made….and thanks for the link. I will surely go through it.
    @vishy, yes..that is an important point….One should be very clear of what to do with your online startup(in the end)…Are you looking to acquired…or do you want to run that company till the end…
    @FM, thanks for your frank opinion. Being a regular reader of this blog, I can see your point. These kind of topics are quite subjective. The dynamics of having a startup have changed. Like I mentioned earlier, people come up with their online property (startup), within a few days ..without giving much thought to any of the questions mentioned above. These questions are basic, but more often we miss those in the first place. Also, as these were some of the questions I have asked myself, and this is an representation of that in a very brief manner.
    @Sumedh, Sure I will meet you when I come to India…

  7. Sumedh says

    Good post…I can certainly empathize with all these…

    Itching to meet you…

  8. FM says

    well,
    you could have wrote this post well, frankly.
    this looks like some advisory to freshers.

    p.s. i’m regular to your site, somehow not every post seems as juicy as most of them are, this one is chewy, I’d say.

  9. Vishy says

    Great post trakin….the fact remains that when someone is starting a venture, thousands of question go thru their mind. But I agree with your top questions…additionally you should also ask yourself if you are in there for long term or short term….Are you going to make sell of your venture as is the trend nowadays or run your startup lifelong…..

  10. Avinash says

    Hey nice post Arun….thought the following would be useful to add to the above list
    a) Revenue Model for the business (especially since most services are available for free). The following link is useful in this regard…http://digitalenterprise.org/models/models.html
    b) Is there a possibility to create IPR with the online venture…this ensures sustainability
    c) Age profile of the the target audience….the younger crowd moves faster than the older crowd given their willingness to experiment
    d)Will I have a first mover advantage in this space?

    Its always a pleasure to see someone succeed…all the very best for your new venture…

  11. trakin says

    IndiaBlogger,
    Thanks for your thoughtful comment, however, the subject matter for this post is different. It is “Top 10 questions to ask yourself before starting an online venture “..This is something that you will do before you even make a business plan…
    and…thanks for the wishes….

  12. Sundarram P.V. says

    oops!! some html got blocked!!
    the reason I was talking about is number 4.

  13. Sundarram P.V. says

    Some times, people do get into the paralysis of analysis mode by doing business plan and all the other stuff before they actually start-off. If the reason for starting is not , then i don’t see any reason why it should be stopped. Best would be to build a proof of concept prototype and then do appropriate planning after that. We all know from experience that what we visualize in the beginning is not how it turns out to be in the end.
    This just my view.
    All the best for your venture.
    May the force be with you!!!

  14. Indian Blogger says

    Hi,

    I think you have missed out something I personally feelis very important ie ” Have you put your thoughts on to the paper”. I am referring here to the business plan document. There is a hell lot of difference between putting your thoughts on a napkin while sitting in a cafeteria versus taking the time to actually point out all minute details about the business plan. A thoughtful business plan document would have everything – market analysis, competition analysis, revenue projections, phase wise growth, human resource identification and most importantly an exit strategy. A well drafted business plan document is very effective in getting clarity of thoughts, evaluating a “what if ” analysis, and for communicating with a VC, Bank or with the partners in your venture.

    Good luck on your start up.

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