Ideas, Execution And The Old Economy
|English: Jack Ma speaks during The Future of the Global Economy: The View from China plenary session at the World Economic Forum Annual Meeting of the New Champions in Tianjin, China 28 September 2008. (Photo credit: Wikipedia)|
The taxi cab is squarely in the old economy. So is the motel, or apartments passing for motels. But Uber and AirBnB are tech companies. They are not only tech, they are cutting edge tech, they are billion, multi-billion dollar tech companies.
Software started out as pure information processing. Then when connectivity came along, and the Internet took off, that information processing went to whole new heights. By now I feel software has clearly started eating into the big world out there. Uber should be an inspiration for people who might know their small chunk of the old economy pretty well, but who find technology intimidating.
A few developers writing code is one way to start a tech company. Sometimes you have a great idea that goes on to change the world. Sometimes your idea is not so good. Acquiring a good knowledge of an industry or a segment of the economy takes time. But time spent acquiring that knowledge might also have been time spent not learning to code. I happen to think that is a smaller problem.
The saying goes, ideas are a dime a dozen, what really matters is execution. I don’t agree with that. There are scores of old, big companies that have perfected the art of execution, but that can be considered brain dead, because they stopped innovating a long time ago, and are on their way out. Ideas matter. But once you do have an excellent idea, it is then all about execution. Unless the idea is executed, it is not a business.
Once you have an excellent idea, it is all about execution. That I buy into.
In the recent years the early stage funding market has really blossomed. You can raise more money earlier than you used to be able to. That does not always mean you can skip the friends and family round. It helps to have a basic prototype even when you want to raise money from angels. And if you are not coding yourself, chances are you are hiring coders, or a tech team, perhaps a tech consultant. That costs some money, maybe less than what it costs to launch a paan dokan in Jackson Heights, but it is still money.
Angels and venture capitalists get hit by ideas all day every day. So when you have a prototype you are ahead of perhaps 95% of the people out there. But even after that, it is hard for the investors to see what you got. One metric separates you from the herd. Do you have a product that has a rapidly growing user base? If the answer is yes, the investors don’t even have to fully comprehend what your idea is, they will fall for you.
In the first dot com boom launching a dot com meant buying servers, for one. You were going to host your website somewhere! But today even a near billion dollar company like FourSquare uses Amazon Web Services. Cloud hosting seems to work just fine. And that server space is really cheap when you just start out. For a few hundred dollars a month, you could go a long way. How about that?
You need an excellent idea. You need some seed money that you can cough up yourself, or you can raise among family and friends. It also helps to have a Cofounder. A big reason is emotion management. In the morning you can feel like a future millionaire. By evening you might feel you were better off working the day at the local McDonald’s, because you might at least have made a few bucks. And that emotional roller coaster is with successful startups. I am not talking about failures.
And you need to execute. You need to move. Risk taking has to be impulsive for you. Too much caution can cause analysis paralysis where you absolutely refuge to move. Tech entrepreneurship is not for everybody. But it is for more people than have given it a shot. I think there is a lot of room for people with in-depth knowledge of segments of the old economy. Start innovating. Jack Ma, who is the new Jack Welch, is not a coder. You don’t have to be.
You have to become obsessed with your idea. The Pinterest founder wrote personal, handwritten letters to his first 5,000 users. He was just so grateful they were even using his product. You need that kind of obsession. When you have only 100 users, you shower on them the attention that you might later have to spread to a million users. That kind of obsession.
New York City is number two after San Francisco by now when it comes to tech startups. You are not in the wrong city to be launching a tech startup. You can if you want to, but no, you don’t have to move to California to launch a tech startup. Drop your buckets, you are off the mouth of the Amazon, came the morse code reply from the ship that was asked for drinking water.