"The Ultralight Startup — Launching a Business without Clout or Capital" by Jason Baptiste (Portfolio/Penguin, $25.95).
It all starts with an idea built around "what service or product you wish existed." In Baptiste's case, he and fellow blogger Andres Barreto found that their Website didn't look good on an iPad. Their idea — make small Website content look good on an iPad — filled a void. It solved their problem and it had a built-in market of bloggers and small businesses faced with the same issue.
Baptiste and Barreto co-founded Onswipe — a platform for tablet publishing and advertising that made Time magazine's 10 Best Startups in 2011. While it was a tech product, it was utilitarian and simple, not sexy. Before opening their doors, they answered a number of questions that all entrepreneurs need to address: "When will you make your first dollar?"
The longer it takes to generate revenue required to sustain operations, the greater the likelihood you'll go out of business before making a dime. Onswipe, partnering with WordPress, created a $50 plug-in. The partnership with an established publishing organization provided instant credibility and a litmus test for the product's value to others. Baptiste and Barreto were able to build Onswipe into a standalone because they found a way to create market acceptance.
App developers for smartphones found a way to get their products visibility and make money quickly. Products like Dropbox, Evernote and Angry Birds used that path.
"Do you have the expertise?" You'll waste valuable time and money if you have a steep "how to build and sell your product" learning curve. Find others who fill in your knowledge gaps. Look to friends, those that have been there and done that, potential investors. And don't forget about the reach of social media and the cloud. All those friends and contacts represent a knowledge base.
"Are you really passionate about this idea?" No business is an overnight success. Starting a business requires passion that breeds commitment. That passion carries you through the bumps in the road all entrepreneurs encounter.
"How big is the market?" You can have a great idea, but if it doesn't play in a large market, you'll have difficulty attracting investors and making a living. Many people are satisfied with a business that's really a hobby. I know a newscaster who can create cakes that look like works of art and taste divine. She recognizes that she'll never make enough dough baking cakes to sustain her lifestyle.
A corollary: There are small markets that offer the opportunity to become the big fish in the small pond.
"How crowded is the market?" Established markets beg for innovation. Onswipe was an innovative product in a market crowded with Web-publishing software and apps. The iPhone made the Blackberry a dinosaur because its apps made it more useful.
Baptiste advises against entering hot markets where a number of innovators are trying to get a piece of the pie. "In these markets, clear leaders emerge fast, leaving everyone else to settle for scraps." A serial-entrepreneur friend of mine got on the bandwagon for medical records software that allows doctors, clinics, hospitals and pharmacies to share information that will improve patient care. He's struggling because he's too small to gain traction in such a broad market and has refocused on physicians' groups.
"How simple will it be to ship your first product?" If you don't have the capital to support a long ramp-up, keep your idea simple. Facebook started at one school and allowed only one photo posting.
Key takeaway: "Don't get caught up in the grand vision. Instead think of yourself working on a project, not a company." Doing so focuses you on now — which creates the road to later.
Jim Pawlak is a nationally syndicated book reviewer.