Facebook is buying Instagram. For $1billion dollars, in cash and shares. Wait a moment and let it sink in: $1, 000, 000, 000! Has Mark Zuckerberg gone nuts? Maybe not. Then it hits you: I can also build X and sell if for a lot of money in 2 years time. More than ever before, there is a move to build an amazing product and sell to Google, Facebook or Twitter. So, who needs a monetization strategy then when you can build to sell?
But just before you rush out to start building something due to the adrenaline flow, I think you might want to consider this: Instagram is actually one in a million of FREE services without clear revenue model yet that ends well.
Do you by chance remember a mobile browser called Bolt? Yeah, Bolt browser was discontinued due to funds and lack of investment. Heck! Even Opera didn’t acquire their superior technology. And every single day, scores of startups shutdown. The failed startups are not usually as documented as when a Facebook buys an Instagram. For every successful startup story like Instagram and Youtube that made it to the headline, there are possibly 9 others that fail to make it. The founders have definitely moved on to some thing else most likely another startup.
Every serious entrepreneur should sit down and do the hard work: what needs are you trying to meet in the community? Is there an existing demand or potential market for your proposed products /services? What happens in the face of strong competition and challenges? Yes, an established company may decide to extend to your line of business. If this happens what will you do?
What of the big question? The revenue question? How exactly will your venture make money? These are some of the questions you will have to answer before you go too far. Even if you don’t have a solid business plan, you should be able to answer the need and revenue question. If you can’t answer this question, startup is probably not for you. Look for something else to do.
And before it is too late, stop dreaming about how you will build a Video sharing API that you’ll then sell for billions of dollars to YouTube. Do you have an experience running a tech. startup business, let us hear from you. Drop your comments at the end of this post. There are several people definitely waiting to learn from your experience. Let’s join hand to build a great foundation that will enable creation of successful startups in Nigeria.