Our copycats are script kiddie scum who hijack all our keywords with their half functioning monstrosities. — email from a founder somewhat frustrated by knockoffs – Paul Graham on Twitter
I thought I might do a quick post on how startups figure out how to share their equity – but after a very quick search I got bored.
The basic point is that if you need money then you might be in the wrong place.
Let me explain.
There are certain ideas that need money to become real – you need cash to hire people to do the things you don’t know how to do, and then hire more people to sell the thing you haven’t made to people you don’t know and hire even more people to count the money you’re not making because no one wants to pay for the thing the people who gave you money paid to make.
Now, every once in a while a business that follows this model makes a success of it but you’d have to be very talented or lucky to spot them at the beginning.
So, for the rest of us, perhaps it makes sense to be more conservative.
But what would that look like?
First, relieve pain
A good business solves something that a customer needs solving.
Not something that, if solved, would be better for them – but something that actually needs solving.
For example, it’s probably better to be in a situation where you are selling a person with a cut knee a band-aid than the same person hair lotion.
You could argue that the person needs the lotion, although they might have a different view.
But you’ll probably have the same view about the cut and the need to cover it.
I read somewhere that a person found it easier to think about his child’s hurt feelings if he visualised them as a physical injury – a cut – and so respond with compassion.
That visualisation will probably work in business as well – is what you’re solving the equivalent of a cut or the equivalent of a pat on the back?
Find the pain – that’s where the sales are.
Build something with low marginal cost
Every once in a while you’ll come across an opportunity that’s low cost.
Starting a market stall, for example, or selling things online.
The thing that matters, however, is not low cost, but how much more it’s going to cost you.
For example, if you’ve spent £200,000 on your education then building a service around that is pretty low cost – you’ve already invested in the intellectual property that matters.
That’s the reason why lots of manufacturers can make face masks so quickly right now – the cost of repurposing machinery that makes shapes out of plastic is low compared to the initial cost of the machinery in the first place.
When you leverage existing capability – when you build on what you already have then the business creation journey is like a gentle walk uphill rather than a torturous ascent up a steep cliff.
Do something that builds on what you’ve done already.
Focus on making what you do hard to copy
If there is one rule you should follow when creating your service or product – it’s this one.
Make yourself inimitable – hard to imitate.
That’s because if you come up with a great idea that you can’t protect with a patent or copyright – or if you can’t afford to enforce your rights – then people will copy what you do and they’ll do it quickly, especially if it’s selling well.
And on the Internet, it’s hard to keep a secret.
Which is why you have to find a way to make your thing about you, in a very personal, very special way.
And actually this is easier to do than it sounds.
What you’ve got to do is combine things – like Scott Adams says about his creation of Dilbert.
Everyone can write, some people are funny, some people draw, and some people know about engineers and businesses.
But Scott Adams is one of very few people who can combine all those things.
And now anyone else who does it will simply be seen as someone who is copying Adams.
The perfect startup is perfect for You
When it comes down to it, there are lots of ways to make money.
But if you want to go down the route of creating something new, something like a startup, whether inside or outside a business – then what matters is not the share you give, the money you raise, or the product you build.
It’s whether it works for you.
Some people think that creating the next Facebook is the only kind of business model worth pursuing.
Most of those people will fail.
But there are millions of people quietly working away, creating significant businesses that do one simple thing.
Take away your pain.