Tools of the Trade
July 8, 2008 | by Clayton Stobbs
Seeing projects and companies develop over a weekend is certainly an interesting phenomenon and says a lot about what hardworking and focused individuals can accomplish. With that however, the question still remains as to what is really needed for startups, especially web startups, in the current state of the web and economy.
First and foremost, the question of money and funding always comes up and usually when it’s not needed. Web startups in particular obviously do not, in their initial stages, require a great deal of capital and this a good thing. Case in point, Startup Weekend groups manage to come together and with copious quantities of coffee, put together working applications or projects that only require hosting etc. Granted, at later stages in development when scaling becomes an issue (a good problem) capital does become necessary but still not to the extent that say a biotech or semiconductor company might need.
So, outside of money and absolute essentials (hosting, servers etc.) what really is needed? Well, clearly the most important asset for a seed-stage startup would be the people and founders. Their vision and sweat equity put into the company will ultimately determine it’s future outcome. Further, with the current state of the economy and the severe drought in M&A transactions, IPO’s, and investments overall (great WSJ numbers for private equity article), it seems that monetization strategies are more important than ever. Even if your application would be a perfect fit with X company, the M&A exit strategy no longer remains as viable an option as it once was (last year). Being able to produce revenue — and profit — that prove your application’s worth will likely become more important as ad revenue/unique visitor strategies become harder to execute.
In any case, startups require a great deal more than the few things I’ve discussed here but it certainly is interesting to consider what becomes more essential over time especially as it relates to major shifts in the economy and development community.
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