5 Common mistakes of online startups

We have numerous individuals and organisations approaching us with great ideas for web based businesses. Some ideas fail.  Failure is not because the idea is no good.  They fail because there are no basic business fundementals in place, and no one who understood the technical part of the project clearly.

Over the last 5 years we have been meeting people who have great internet ideas. They are all great and they can all work. But.... they miss 1 of the 7 fundamental elements that make internet businesses survive.

1. The service will be free for the first 6 months.  Why and how will you convince people to pay for the next 6 months. Charge for your service and charge well. A business without cash flow is dead before it starts.

2. "This idea is like merging facebook, with twitter and ebay and amazon". What you are actually saying is, I have the investment to mimic all these giants and pass them out. Do you? Be honest with yourself.

3. There is someone else doing this already so we wont do that. First to market does not always win. If there is some one already providing the service, then there is no reason you cannot do the same but better. There are lots of twitter like services out there but twitter succeeded.

4. There is no "legal" internet based business that will act like a ATM machine, providing wash loads of cash for little or no effort. Be prepared to work very very hard, devote all your spare time and more.

5. Do not employ the cheapest provider.  When choosing your technology partner, choose a company who is going to be loyal,  and genuinely interested in your project, will argue, and bring ideas to the table. They are your life blood.

6. Have a detailed specification and deliverables project plan in place before commencing to code. Spent more time on planning and less on delivery, it will payoff in a scalable project that will last technically.

7. Make sure your User Interface looks pretty, from the public and administrator end.

Yes there is an extra one because like all web projects there is always something important at the end that was so obvious no one thought of it.

8. Have a realistic 3 year business plan, with projections based on real research.