I admit it: my previous (so called) “startup” Kroomsa was a failure. Back when I was starting up, I remember how game changing I thought it was. We wanted to revolutionize Indian music scene by inserting audio advertisements into music. We also vowed to donate 20% of proceeds from advertisements to a charity organization. Do you see how cool the idea was? Though this business, we combated piracy of music, made money for independent bands and helped society by supporting charities. All at once!

Except that we never made a penny out of the venture. First mistake: none of the team members was doing it full time. Second mistake: none of the team members had any experience in music industry. Third and biggest mistake: the idea was “cool”. To my hacker brain, this crazy business model was like dope. I distinctly remember being on a high for several days when I initially thought of that idea.

According to my then interpretation of “execution is important than the idea”, I started implementing the business model without doing any reality check at all. I built the music platform, roped in friends to help me, contacted a few initial music bands, uploaded music and added a dummy advertisement in songs! Before I realized my project was a startup. As time passed, I realized:

• Nobody likes to listen to advertisements in songs. In fact, people hated it. Lack of basic market research.
• Nobody in India likes to pay for music, let alone for independent rock music. Market was tiny.
• With no experience in music or corporate industry, we had no clue how to bring in advertisers. Lack of business and marketing plan.
• Finding good bands and signing them up was a non-scalable, extremely laborious task. So, our inventory of music was small. That meant even if we found an advertiser, our reach wasn’t so appealing. The chicken-and-egg problem.

Eventually we gave up on the startup when we realized: a) although we got covered in national newspaper because of the coolness of idea, it wasn’t exactly a startup; b) even theoretically, it will never grow big enough as a business (because market didn’t exist). In fact, even after months we hadn’t made even a single penny and there was no hope how it will make money.

In the process, my then 18-year old version learned the importance of business idea being grounded in reality. All this was extremely helpful when I founded Wingify last year. The first product is Visual Website Optimizer, an A/B split testing tool. Even though there are (or should I say inspite of) established companies in the market, the startup is making money and the revenues are steadily growing month-after-month.

Why is Visual Website Optimizer making money while Kroomsa didn’t? I think it boils down this:

The idea isn’t sexy. I am not going to change the world with it. But I am now solving a real pain-point in a big-enough market validated by presence of competitors. Since people are already paying for what I intend to offer, mine just needs to be easier, better or cheaper and the startup will make money and get customers. In short: I am making things that people want to pay for.

Yes, the phrase “make things that people to pay for” is worth repeating twice. Because I have now started making money with Visual Website Optimizer, my perspective on startup ideas has changed completely. A few years ago, my first reaction on getting a startup idea would be “Oh wow, this could be next Google. How do I get started implementing it?” Now my first reaction is on the lines of:

How will this make money? Who will pay for it? Is market big enough? And most importantly: do competitors exist?

So, next time you get a startup idea, ask yourself if established competitors (not other startups) exist in the market. If not, you better think twice because it could be an indication that the market doesn’t (or cannot) exist and you will never be able to make money in it.

Good luck with your startup ideas!

Imagine for a moment that you have created a new web app and after about 3 months of launching you are doing $2000 per month of sales. Would you consider yourself as a successful startup?

Well, you are already ahead of majority of startups which never get to see any revenue. So, in that way you are doing good. Plus if $2000 covers all your human and infrastructure cost, that means you have broken even and are doing really well. Is breaking-even the measure of success for a startup?

You certainly didn’t take the risk to earn just-enough money. Why would you leave your day job if your goal was to just break-even? So, this directly takes us back to our original question – when do you say that your startup is a success?

I believe answer to that question cannot be given in isolation. What startups need are benchmarks to compare. Knowing what other companies (in a similar position) are earning gives you a great perspective on your own revenues.

However, since startups are private companies, only the kindest of all share their revenue numbers. I compiled some of them in this post so that the startup community can benefit from it:

• Sales of Bingo Card Creator Per Month – ($4k/mo in sales) a single person, part-time effort over a number of years
• Pluggio Stats – ($1k/mo in sales) Twitter client, one man company
• WooThemes Mixergy interview – ($2million/year) 3 person company selling Wordpress themes
• Affiliate media Mixergy interview – (from $400 to $400,000/mo) single person bootstrapped business
• HotOrNot Mixergy Interview – (around $7 million in annual revenues in about 5 years from bootstrapping)
• Evernote revenue details – (around $400,000/mo, venture funding > $15 million)
• MetaASO: A Bootstrapped P2P Startup From India (doing $1 million in revenues annually)
• Upside – elearning startup (did $50,000 in sales first year, size of team: 20)
• BalsamIQ (did $100,000 in sales in first 5 months, single person startup)
• A Year in the life of KashFlow – Numbers and Strategy (£500k sales in 2009)

Another great general source of revenue numbers is Flippa.com where people buy and sell websites.

If you have other links or resources, please share them with me. Happy to include them in the list.

(I am currently looking for link to a blog post where a team collaboration bootstrapped startup shared its numbers – $5-$10k/mo, any one having a link?)

What do you do if you feel you are born unlucky? What do you do if you feel that the whole world is conspiring against you to make you not succeed? And, what do you do if you feel you have less intellect, less resources and less everything to succeed?

The short and sweet answer is to work harder. You cannot control luck. You cannot control amount of financial resources you have. But what you can definitely control is the amount of effort. Your competitior or neighbour might be advantaged in all respects but you can compensate all that just by working harder.

Really, putting in a lot of effort gives you a lot of chances to make mistakes, try out things and fail. What you have to loose here is your effort, which of course you must have unlimited supply of.

If your nearest competitor or neighbour works X hours, you must work for X+1 hours. If he pitches to Y bloggers, you must pitch to Y+1 bloggers. Of course, you cannot match him in his $5 million funding and a huge team of sales guys. But what you can match (and even exceed) is your persistence and sheer drive to succeed.

Yep, I know it is sounding a bit like self-help bookish type, but I have observed and realized that success is an equation with a lot of variables. Most of the variables you have little or no control on but one variable which has a lot of influence on the result is effort and persistence. Controlling the value of this variable is entirely upto you and hence affecting chances of being successful is your will.

What are your thoughts on this? Does hard work really increases the probability of success?

ReadWriteWeb had a nice, long article written on Wingify’s ContextSense. Read the article titled Identify Any Website’s Sentiment with ContextSense.

To quote:

To test out ContextSense’s accuracy, we put in the URL for ReadWriteWeb.com (but of course). The end result was mostly on target, identifying our main concepts as a top ten list including things like software, Google, iPhone, news and media, commenting, semantic web, and more. The last three items in the list – AJAX, class libraries, and JavaScript – were off base. Perhaps that’s why they were greyed out while the rest of the list was in black, though. There isn’t any explanation as to what the shading means, but that’s a logical leap.

The categories list was similar to the concepts list except it showed more of a drill-down as to what broader topics the concepts came from. For example, for “Semantic Web,” the associated category was “Reference > Knowledge Management > Knowledge Representation > Semantic Web.”

The tool also ranked our site as “slightly positive,” which makes sense since we’re passionate about technology and don’t (often) post negative reviews – we tend to just skip product reviews for those sites and services we don’t think much of.

For those who are not aware of digital evolution, I am writing a quick short summary. Digital evolution means evolution of computer programs who compete for limited resources such as CPU and memory. In short, it goes something like this:

- You define a universe, which is virtual memory (space) and CPU (time)
- You create energy (CPU cycles)
- You define an extremely limited instruction set for Virtual Machine (Physics). Instruction set being limited is important because you want to mimic physics, not chemistry or biology
- You seed randomly generated programs of varying length
- You start parallel execution the random programs
- Each instruction eats up energy and at random times you feed energy into universe
- At random times mis-execute program instructions
- Run it for a long time and Voila! finally self replication gets evolved from very simple instructions
- Then arms race gets started between programs and things get interesting

Some people argue that digital evolution is not merely an emulation of real thing but is indeed a real manifestation of evolution and I tend to believe the same.

To download the digital evolution simulator written by me in Python (called PyPond), head to: Download: Normal version or With graphics version (requires PyGame library)

Really, does it matter at all if you make up small lies while doing sales? If you convince yourself that it is sort of true but deep inside you know it is fundamentally a lie, are you okay with that?

I’ve known sales people going to extremes: promising benefits which never were, projecting products with made up facts and use other tricks of the trade just to get that sale. They are desperate to make a sale. This is quite common in finance industry. But, in this post, I am not concerned about blatant lies made up to trick innocent people.

I am really split whether it is fine to get involved with the oh-so-common sales gimmicks, little lies, subtle hints, etc. that do not harm the customer but add just a little boost to your business objectives. My right half of brain says that a lie, no matter how small it is, is fundamentally a lie. My left half of brain says it is okay to use industry standard tricks, business is brutal and so should you be.

Many of the iconic companies did this in the past. For example, Bill Gates told IBM that he had an OS when he never had. And I wouldn’t be surprised if the rumor that Facebook created fake profiles to boost membership at the start is really true. Moreover, highly admired companies on Internet do what I would classify as grey-to-black hat SEO. Is it all RIGHT? Aren’t they compromising their integrity with all such practices?

What is your opinion on this matter?

I’ve been literally forced to write this post. My hands have been dragged to the keyboard and my mind has been controlled. Never would a person who claims to be rational, scientific and no-nonsense would write on something as unscientific as why number 23 is special. For the uninformed, there is something deeply mysterious, extremely special and wonderfully interesting about 23. The phenomenon is called as 23 Enigma.

When I first heard about it, it was yet another overhyped meme for me. But slowly, and definitely steadily, I started identifying 23 in everyday phenomenon around me. Now, not a day passes without me seeing 23 somewhere around me. And it is not just me, by showing examples, I have convinced several of my friends about this odd belief of mine.

That said, internally, I debate endlessly with myself whether what I observe is just an artifact of confirmation bias where what one observes is typically due to what one wants to observe. Soon I plan to start a journal where I would try to statistically see if observation of 23 is more frequent than what is expected by random chance.

Do you observe 23 as well? I would be really interested in listening to your story.

BTW: Would you be shocked if I predict that within next two days you are certain to observe number 23 somewhere around you

I randomly stumbled across many interesting April Fools pranks on the Internet today. So, I thought of sharing them here:

• Youtube’s Flip
• Opera’s Facial Gestures
• Google’s 3D Browsing
• Pirate Bay’s acquisition by Warner Bros.
• Guardian’s decision to publish only on Twitter
• Amazon’s helium baloons hosted on clouds

Enjoy! I will try to add more as I come across them. Do let me know if you any interesting pranks.

Suppose you win a lottery or get a successful exit for your startup. You suddenly find yourself with a million dollars to play with. It is like what you always dreamt for has become a reality. At this point, what would you do? What would your future look like?

It is hard to imagine not having fun with a million dollars in bank. But that is precisely what I (sadly) concluded after thinking deeply over this issue. There are multiple reasons why I think a million dollars won’t bring me the freedom, happiness and euphoria that I had thought were main motivators for me.

One of most the reasons concern with the social circle. Even if you get lots of money to spend, with whom would you go shopping? Who would be able to afford accompanying you to your always-dreamt-of-visiting Morocco? Is your friend equally fond of I-would-go-bungee-jumping-one-day? Chances are that most of your friends or relative would not have time to be there with you all the time, would not be able to afford hanging out with you while you are indulging, and would politely decline your sponsorship. So, my friend, what would you do with your million dollars?

How many movies per week can you watch? How many books can you read? Can you eat at fine-dine restaurants three times a day for a whole month? To be realistic, I find it hard having a tremendous amount of joy from a million dollars. I don’t think I would be more happy then than I am at this moment. Maybe the kick of having money far more strong than the actual pleasure in it.