Startups for Newbies

A friend recently was talking to me about Web Startups. He’s a humanities major and doesn’t spend most of his life online, like some of us, but he was really intrigued by the idea and asked for a basic primer from the point of view of someone who, maybe, understands a little bit about that world. So, here I am, doing my best.

The first place to look, almost certainly, when you’re interested in startup culture and the economics and psychology of the whole thing, is the essays of Paul Graham. All of the essays are excellent, though many aren’t about startups. Some good starting points would probably be How to Start a Startup and The Future of Web Startups. Mainly the thing to take away from all of his essays are that startups are exciting and possible, plus he offers plenty of reasonable advice.

So, now that hopefully you’re excited about startups, we can do a quick survey of the kinds of things web startups are doing (all of which have been grouped together and shorthanded “Web 2.0”) and maybe look at some examples that are doing them well.

Harness the “wisdom of the crowds”
The nature of information is such that it is distributed all across the galaxy of minds. Sites that make it easy to aggregate this information can be successful without having to rely on a large staff or large proprietary databases. All you have to do is set up a framework where your users are rewarded for giving good information and let them do the work (especially when it’s fun!)

Some examples of sites like this: reddit.com, which allows users to submit interesting and important links and then vote on them, so that the most interesting links float to the top. Threadless, where users submit t-shirt designs and vote on them; the designers get special rewards and the voters are presumably already all potential buyers. On both of these sites, pretty much any user can find something they like on the front page, which draws them in.

Keep tabs on your friends
People are social animals. Keeping up with your friends is really just another matter of distributed information. Your friends are doing stuff and if you find out what they are doing, maybe you could do that stuff with them! This can be an important part of business models because friends will recruit other friends naturally. These services, when successful, can grow very quickly.

Some examples of sites like this are Facebook, where everyone gets their own page to write what they’re doing and everyone gets to see what their friends write (plus you can do other things like play games with your friends) and Twitter, which is sort of like one of the many blogging services out there, except your updates are limited to 140 characters. Most people just end up saying where they’re going and what they’re doing. This can really get addicting.

Connect people who can’t find each other
Many of the problems of the world caused by imperfect information have to do with the fact that people want to find other people for whatever reason. Whether they need a job, a mate, a doctor, or just a new friend, the internet can provide the matches people need.

I’ll skip dating sites like OKCupid and PlentyofFish when describing sites that do this well. Meetup.com organizes people and helps those who are interested in niches and uncommon things to find each other so they can share in the activity. LinkedIn creates a network of professionals in various areas that can help each other find work or keep track of the skills they and those around them have.

Offer to store and organize personal data
Storing data online can be useful; it makes it trivially easy to share it with others and also gives you access to it anywhere you are that you have a computer. With cell phones, these days, a lot of people have computers with them all the time. A good tactic, then, is to offer people a place to store data that is important to them or that they need.

One example of this is RememberTheMilk, which stores to-do lists, shopping lists, and all those sorts of things as well as can send reminders to do things when you need them. Another is Geni, which keeps track of your family tree, going as far back as you’d like, and can help you go back farther, but will also e-mail you to remind you of family birthdays and other such things.

Offer to store and organize A LOT of data
The business model of some of the biggest and most powerful startups involve storing lots and lots of user data. It takes a lot of servers and disk space to accomodate these type of startups, so just developing cool software and marketing is not enough. Everyone knows about these types of services: Youtube, Flickr, Wikipedia, and such.

Conclusion

Most successful Web startups do one of these things, and the most successful do a little bit of everything on this list. It has gotten much more affordable to do a startup in the past few years: all you need is hosting, a few competent designers and programmers, and a good idea. I hope I explained everything you need to know to think about doing your own startup, even if you’re a complete novice!

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