Silicon Insider: The New World of Startups

With what little money they had, the team set to work, spending days and nights on both sides of the world, writing code. Early on, the team decided they had just enough money to focus on a single photo site. They chose Flickr because of its affiliation to Yahoo, its millions of users, and most of all, because Flickr opened up its code to them. If they succeeded with Flickr users, the team decided, they would get enough money from investors to fund custom versions of Powersnap for the other sites.

In late autumn 2006, the Powersnap team ran into their second great challenge. Simply put, they were broke. Months of complete focus on the company had burned up their savings, and now there were new babies to add to the financial (and emotional) burden. A traditional startup would at this point have gone into suspended animation as the founders raced around begging for investments. And most such startups are never resuscitated.

But in the intervening months, Santosh had learned a great many things about the new world of Web 2.0 entrepreneurship. So when the crunch came, he and the team decided not to stop, but to keep running on empty until they had finished the alpha version of the product, a date they targeted at Jan. 23. It was during the grey and cold early weeks of January that Santosh had his late night resolution. For him and the others, all that mattered now was to finish.

Once You Make It, You Have to Sell It

But that still left marketing. A product, no matter how brilliantly designed, is worthless if no one hears about it. Five or 10 years ago, this would have been another fatal moment in the history of most traditional startups trying to bootstrap their way financially. Given the noise of modern life, a traditional product may take $10 million just to penetrate the public consciousness.

But once again, Web 2.0 has it own rules, most of them still unwritten.

What matters now is that the new idea embodied by your product or service is picked up and proliferated across society. Sociologists and linguists have called this a 'meme,' though a more accurate term may be 'beme,' a term coined by marketing maven Tom Hayes for a 'business meme.'

A successful beme can, in a kind of chain reaction, reach millions in a matter of days -- and because the obstacles to participation are miniscule (a few clicks on the computer) it's possible to gain an army of users in less time than it took a traditional product to even reach store shelves. Just look at the jaw-dropping growth of FaceBook, for example.

The trouble is, a lot of smart young Web 2.0 entrepreneurs understand this, and a traffic jam of new companies is growing, all trying to capture the fancy of populace. Today, Powersnap is one more of them, using every trick it can think of -- chat rooms, blogs, hip Web sites, word of mouth, download sites -- to see if it can spark its own explosion.

Will it work? Nobody knows. If you want to find out how it's going, just Technorati or Google 'Powersnap' every few days and see how well the message is being conveyed.

In the meantime, consider that epiphany that Santosh had last week. By its lights he and his team have already succeeded. They have taken a product from idea to market in less than a year, and they have done so without a staff, and indeed, without any outside investment. That would likely never have happened a decade ago.

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