The Startup Formula

July 23, 2007 - Get free updates of new posts here

Founders try and find the exact formula for a successful startup. A secret formula that would produce a successful company. Take a little bit of this; add a little bit of that. Salt it up and let it ferment for a month or two and you got yourself a successful company. But that’s not the case.

Recipe Companies that are starting out in new fields, breaking new ground cannot be looking for a secret formula. Because it doesn’t exist. Especially for companies that are breaking new ground, doing something that hasn’t been done before.

There are places where formulas for success exist. They are the franchises and other well established industries. They don’t require much thinking or experimenting. You just follow a basic formula and success (to some degree) is guaranteed. This is not the case with most startups today. There are tips on startup marketing strategies, but nothing that works 100% of the time.

The Bag Strategy today the formula for success is the bag strategy. You throw a whole bunch of good stuff into a bag, mix it up a bit and hope that something useful comes out of it. Take product development, marketing, personal networking, promotion, coincidence and a bit of luck, mix it all in a bag and see what comes out. And don’t believe the hype about that latest thing or marketing ploy. Sometimes it’s the classic go-to things that work.

Sometimes it’s useless crap, sometimes it’s a half-successful company. Once in long while you’ll get a company like Facebook or YouTube.

What’s going into your bag?

(Post by André Nosalsky.)

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8 responses to “The Startup Formula

  1. David Ulevitch Reply

    The Bag Strategy – today the formula for success is the bag strategy.

    You must be joking. YouTube was a fantastically executed machine based around one simple goal. To consider it a bag strategy is naive at best. Same with Facebook.

  2. André Nosalsky Reply

    David, I understand your point. If you look at thousands and thousands of startups, why aren’t they using the same formula if it’s so straight forward. I still think that there is not one set formula that can be applied to a startup and it guarantees success. But it looks like you’re on a roll with a couple of successful products.

  3. JW Reply

    Your article seems to imply that success is based largely on luck. I think that success is a result of being able to skillfully identify and execute worthwhile opportunities.

    For instance, Facebook started out as just a rip off of Friendster for Harvard kids. However, the founders realized that making the site exclusive to college students was a worthwhile opportunity to take to the next level. In the early stages, Facebook could have evolved into a lot of random things, but they made the right decision to go national. So, they scaled out Facebook like crazy, and in under 6 months, they spread like a virus to every college.

    Facebook could have just chilled, but they identified value, and more importantly, they executed it with finesse.

    It’s easy to look back and say “I could have done that,” but it’s those who actually plan and execute that make it to the top.

  4. SusanJones Reply

    Just make sure, whatever you are starting up, that its yours to start up with.
    Did Facebook chief steal the idea?
    Trio sues for control of, profits from networking website, claiming Zuckerberg stole idea from them
    Jul 24, 2007 04:30 AM
    Peter Gorrie
    Staff Reporter

    A judge in Boston is expected to decide this week whether to proceed with a lawsuit that claims the founder of the wildly popular Facebook online social networking site stole the idea from three former fellow students at Harvard University.

    The three want U.S. District Court Judge Douglas Woodlock to shut down Facebook and give them control of the website along with profits from it.

    http://www.thestar.com/sciencetech/article/239046

  5. Derek Scruggs Reply

    I think that success is a result of being able to skillfully identify and execute worthwhile opportunities

    On one hand, I agree. On the other, I think the more difficult thing is to decide which opportunities NOT to pursue. Once you come out of stealth mode and start talking with potential customers and partners, you’ll see lots and lots of potential directions to go in. And you’ll want to do all of them.

    I’m sure YouTube was slammed with inquiries from everyone from fellow to startups to Hollywood high rollers. They probably had to say “no” to 95% of them, and it was probably very painful at times.

  6. Lewis Green Reply

    Andre,

    I’m on my third business. In my bag, I’m mixing some proven best practice, some innovation and creativity, and lots of integrity, values, ethics, hard work and prayer.

  7. JW Reply

    Derek,
    I totally agree, and that’s what I was trying to get at in my comment. When you are in startup phases, you gotta test the waters and experiment with your options.

    Always invest your time and a small amount of your resources in taking your company and your idea in different directions. Once you find something that sticks, you execute it. After that, you scale it out to dramatic proportions.

    Thanks to the Internet, it’s relatively easy to scale out businesses online. But a drawback of Internet businesses is that without defensible traffic, you are always at the risk of getting out-competed by copycats.