Golden Rule for Startups

If you are like most of the entrepreneurs, you want to find a business idea which can change the world and make you a famous millionaire. Plus you want an idea which is not hard to execute so that you may have best of all worlds. There is nothing wrong with this thought, except that either it is impossible or you need heavy doses of luck to make it a reality.

Easy to start and execute businesses rarely make it big. If you are thinking of writing an application which will revolutionize the web overnight, forget it. If you are thinking of coming up with a business model which will rock the world and make you arrive on the scene instantly, forget it.

Look around yourself and you will find that most of the successful businesses didn’t happen in a day or a month or (heck!) even a year. All things in life take their sweet time, success takes a little longer. By working hard, day by day, a successful business creates a huge barrier to entry for other players; while at the same time creating value for the customer.

Imagine for a moment that a particular business is lucrative and easy to start. If you want to enter that business, you are not alone; why wouldn’t everyone want to do that. So many players in an area create intense amount of clutter, competition and a crack in your profitability. Eventually, the business becomes a commodity business and you don’t want that to happen, do you?

So you don’t really want to start an easy business at the first place. Instead, given your skills, time and money investment and other constraints, you must choose the hardest possible business. This is the golden rule for startups. Harder a business to start, better will be its eventual returns.

If you persevere, while building a tough business, you will make a moat around your business (as Warren Buffet puts it). This moat will make it harder for your potential competitors to enter your area, while allowing you to focus exclusively on value creation for the customer. Five or ten years down the line, you could then be the leading business in your area. (See related concept of The Dip by Seth Godin.)

Repeat after me. More operational the business, the better it is. More impossible-looking the business is, better it is. More technology-intensive the business, the better it is. More web 2.0 the business is, (chances are) the worse it is.

Now Good.


  1. Interesting post, my 2 cents
    Before some one start thinking about entrepreneurship I would like to ask, Why some one want to be entrepreneur at all?
    1)You want to be famous millionaire
    2)You want to live life with your own rules (don’t like regular working hrs at company place or HR policies sucks)
    3)You are part of growing population who want to start their first job as CEO or let say want to achieve everything before 30
    4)You want to make a difference (social entrepreneurship)
    5)You got nothing else to do

    There is no golden rule for successful startup, but there is golden rule for avoiding failures (as Paras mentioned)
    99.9% failures in entrepreneurship are due to overestimation about your capabilities and underestimation of market trends. Before you try the entrepreneurship, you must have tested your capabilities in some or other ways, must have accomplished something,

  2. “Aim for the stars; even if you miss, you’ll still reach the moon.”

    Unfortunately, the moon is a very different market from the stars, and it has no interest in your rocket’s payload.

    Another way of looking at it:

    “Most of the successful businesses” also didn’t start by aiming for something impossible. Good businesses started small, but continued to have ideas and take actions to keep avenues for expansion open. You can’t walk before you crawl.

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