I have become increasingly fascinated by technology start-ups and the business of launching an online business. With this post I am looking to start an occasional dialogue on the trials and tribulations of starting a new business in the digital economy. We’ll see how it evolves.
In early April 2009, five Australian guys met in a funky bar in San Francisco to compare notes on their respective business ideas. There were three different technology start-ups involved in the conversation, all excellent ideas with bucket-loads of potential, and all three have taken very different paths to realization.
Business 1 had just been through the Y-Combinator system in Silicon Valley, polishing their product and pitch in order to create a package that would be more attractive to Venture Capitalists. Their site was live and in Beta-testing mode.
Business 2 was deep in the development of an exciting idea. They had been presenting the concept at various tech-showcases in the USA whilst continuing to refine it. They planned to begin “Alpha” testing within a few months.
Business 3 was at a much earlier stage of development. The concept had been drawn up but was still some way off realization.
What happened next is interesting.
Business 1 received some funding, and went about making improvements based upon the feedback of world-class industry experts and 13 months later is about to announce an official launch.
Business 2 has repeatedly delayed “Alpha” testing as they looked improve the concept. Their motto seems to be that it cannot go public, even to a select few, until its close to perfect. Thirteen months later they have yet to release anything.
Business 3 decided to launch to the public despite not having a fully developed functionality. Less than one month after the meeting in San Francisco they launched a simple site that the public could access and delivered the “service” manually rather than in the fully-automated manner than they desired. Thirteen months later they now have a fully automated version of the service live but have been generating revenue from the site since month two. They used the feedback and interaction with live users and customers to refine and evolve the service.
Three very different approaches with so far very different results.
Currently the one that was least sophisticated and least advanced in that meeting is easily the most profitable and advanced of the three in its business evolution. They decided to launch early, create a ongoing story to accompany the launch and then scramble like crazy to manage the response whilst improving the product on the fly.
Of course, business 1 might be about to blow them out of the water with their impending announcement, while business 2 is still cautiously working toward the “perfect” launch.
I’ll be following all three with interest over the coming months to see what happens and in time might be able to reveal who they are (confidentiality precludes me from this currently).
Are you involved in a tech start-up? What do you think is the right road to take?