Wednesday, January 21, 2009

A Sign Your Start-Up Is Going To Fail

We used to have this sort of thing come up at my last company so often that we turned it into a sales approach (that is, we'd help the prospect, usually gently, gain some perspective). That is why this quote hit home with me. Jeff Biggs, CIO of Peak 10 Data Solutions, has established a rule of thumb over the years:

“Whenever I see the Four Horsemen of the Apocalypse, I run for cover,” says Biggs. “The four horsemen are ‘We’re going to have big Sun servers, Oracle databases, tons of bandwidth and a bunch of consultants.’ You need to start small and see if you can make it work. That way, you’re a customer for 10 years and not six months.”
It's just so dead one.

When we came across this, we admired the ambition and vision, but we tried to re-focus the clients energies back into their business in other ways. An incremental approach makes far more sense. Things can always be ramped up for the right reasons when the time comes but it's tough to get back money already spent when things don't ramp up quite at the rate expected.

I'm not saying you should be a pessimist versus an optimist. More like a pragmatist. Toss a bit (not all) of the cash saved towards beefing up your "Slashdot effect" plans (as in, how you're going to get that level of success and what you'll do when it happens not what you've already done) and you'll be better prepared in any case. Besides are you sure you'd know what to do if you outgrew even the big stuff?

When we weren't able to make a convincing case for pragmatism, it wasn't unusual to see them last a year or two as customers... than pretty much disappear. Now even some of the pragmatic ones disappeared too but at least it wasn't because they spent all their cash before they'd even had a chance to become a success in the marketplace.

Most of the time, capital is better spent making the product/service more inspiring and actually getting real paying customers for the new product/service, and whatnot. Don't buy the big infrastructure stuff just because your IT advisor wants to prove his worth or even because you want to prove your own level of seriousness about the venture (there are far better way to do by getting sufficient customers and cost structures in place to be a sustainable profitable enterprise that can afford to invest further in its infrastructure).

Commit your resources to the right things and the rest will come together as needed. Of course, I realize that is easier said than done but it's an important concept to strive for and keep in the back of your mind always nonetheless.

Are you involved in an IT (ad)venture like this? If so, I suggest refocusing the ambition to other aspects of the venture that could benefit from it, and talking the infrastructure over with an objective outsider before taking the leap. And, no, I didn't set out to make this post into a self-serving pitch... it just sort of worked out that way. :)

Best of luck in your (ad)ventures however big or small they may be or seem,


1 comment:

Josh Richards said...

Speaking of which, here's a relevant article with advice on going from a single server to many for load balancing and reliability purposes: