There are a lot of Web 2.0 companies out there. If you don’t believe me, check out Web 2.0’s archive. For every Digg or Twitter there are dozens of sites that provide great services that flame out. Unfortunately, the fault does not lie in fickle consumers or bad luck — it falls directly on your shoulders.

Luckily, most of the worst startup mistakes are things that you can change. What better time than the beginning of the week to take a look at some of them?


Obviously, The Product Will Sell Itself

Used Car

This is the problem faced by entrepreneurs who start off as pure developers. The idea seems pretty well founded. If you have a great product, people will flock to it. This could not be any more wrong. If Web 2.0 has taught us anything, it is that there are a ton of extremely talented developers out there and many of them have made amazing products. Yet, somehow, there is only one YouTube and Facebook.

What is the difference between a well developed product and a great product? Implementation, of course. Truly great entrepreneurs are able to separate themselves from their products and realize the one real truth of business, “no one cares.” After you have your product put together it is time to get it through your head that your only job now is to cut through the public’s inertia and make them see how important your service is to their lives. Market, market, market. Get yourself out there and scream your unique value proposition from the rooftops.

If you can’t give someone a general idea of why your product is great in one sentence or less, then it isn’t.


People Care About Features!

Confusion

People could care less about your tag clouds and OpenID support. In general, people really only concern themselves with one portion of a product. Most people use YouTube to watch funny videos. Most people use Flickr to show off their great photos. Each of these products has a metric ton of additional features that power users really get behind but the public at large is completely unaware of.

Make sure that your most important features are impossible to miss. Let your users see up front why this product is a handy addition to their lives. Once they are hooked they will look around and see all the other great stuff you have put in. You must understand the difference between product adoption and user retention. Features retain users, they very rarely get them.


What Do You Mean We Don’t Need A Private Jet?

747

No, I am not going to let the CFOs off the hook. Too many young startups, newly flush with venture funding, forget that business finance is a lot like personal finance, “a penny saved is a penny earned.” Remember when you were bootstrapping and you bought all those Dell PCs wholesale for $300 a pop? Why does it seem prudent, now that you have a little capital to burn that you should need $2,000 Mac Book Pros for every employee, even the ones who need computers for little more than Excel and email?

Unless you are turning a profit, most of your money should go towards development and marketing. I am not saying that you should work out of a closet, but wait until you have revenue before you spring for that 5th Avenue suite. Also remember, there are free or cheap solutions for almost all corporate infrastructure problems. You can pick up computers, furniture, and telecommunications services at cut rates if you know how to look. The only thing that you should feel free to splurge on are servers and maybe enough amenities to keep your employees content.


No One Told Us People Would Actually Use This Thing

Dell

Speaking of servers. The next most important thing to remember is that you should have a plan in place to double your infrastructure at very short notice. It is entirely possible that your user base could go from 5,000 people to 50,000 people in a month. If you haven’t prepared for this, it won’t be long before your user base, annoyed at network failures and slow downs jumps ship and moves on to greener pastures.

This is one of those times a little forward planning can really be a life saver. Have a plan written up to tell you what type of infrastructure you would need to handle each new flood of users. Make certain that your vendors know that your equipment needs are in flux and be certain that you are ready to scale up well before the server room bursts into flames.


Early Adopters Aren’t Real People

Replicants

I know I didn’t use a clever turn of phrase for this one, but I think it’s too important for that. What you need to understand, right now if you have not already, is that early adopters are not real people. The geeks, techies, friends and family that initially use your product are not representative of the public at large. Their opinions on your product are not representative of what the mainstream will think.

If your web service is designed to scale, be certain that your marketing machine is not only targeting the digerati. Start getting the word out through newspapers, magazines and publications in your broader field of interest. If you are making an online video recommendation service, don’t only pray to the altar of TechCrunch but also get the word out amongst movie lovers. Make certain that the same people who use Netflix can easily get their head around your product. Understand that, in general, normal people are looking for something that makes their lives easier. They don’t understand Web 2.0 and social media collaboration. In this case, sell the steak not the sizzle.


Huh, What’s Gmail?

Boxing

This should have been point number one. Products can be destroyed before they even begin if you don’t do the research. Take a look around the net and make certain that you don’t have another huge player operating in the space that you want to move into. If it turns out that there is, make sure that you can clearly define how your product is different than their offering.

Also, research how services similar to yours have succeeded or failed. Some of the best advice you can get will come from the horror stories of you competition. An ounce of preparation is worth a gallon of regret.


Web 2.0 Roundup

There are a thousand mistakes big and small that can sink your startup, and the ones that I described are only a tiny subset of them. However, I daresay that these are the most important. Remember, that a web business is still a business and knowledge is your best weapon.

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