If you wrote down the name of a failed tech startup on a
piece of paper and then stacked those pieces of paper you would have a stack
that would reach all the way to the moon.
Okay, I made that last bit up, but you get the point. We all
have an expectation that startups need to be hugely successful, and that
failing to do so is a personal failing.
Facebook, Uber, Groupon, Alibaba…. we all love the success
stories of those who succeed. The media is full of articles about great success
(unicorns) in the hi-tech industry. The problem with these stories is that they
are dealing with the outliers.
When you realise that you don’t need to build a Unicorn
company from the beginning that frees you up to build a successful business in
the tech game that will last for years. There are plenty of precedents to this,
and here are three of the classic business models out there.
Consultant
Get other people to pay you to do work and learn as you go.
Release your own product from time to time.
Many startups either start this way or end up this way to
earn money when they find they aren’t getting the volume of sales required to
support their overheads.
Graphic design, furniture design, clothes design, jewellery
design and the industrial design industries all work this way to a large
extent. They all put out some of their own work in their own name, but they
mostly work on contract for other companies.
This is a model that can survive decades as it not only
allows you to spread costs but it also ensures that you are being forced to
keep up to date on languages, technology, and understand customers and
consumers.
Artist in residence
Many of the famous artists of history had wealthy patrons.
They were provided with an income, materials to work with and a canvas, ceiling
or wall to paint on.
There is a lot of money rolling around in the enterprise
sector and B2B sectors just looking for solutions to their problems.
Through working with companies to solve their problems you
will learn a lot about what companies actually need – trust me, not many in the
startup game understand this sector. And if you are lucky, you will develop a
solution that could be sold to other companies. You might need to share the IP
and equity on your great solution, but then you would never have developed it
unless they brought you on board to solve their problems.
Go help them out. Try getting 3 days a week paid work to be
a developer in residence at a major company.
Farmer
Farmer’s take a lot of risk. They seed, grow and harvest a
crop each year. They take the risk that yields mightn’t be high every year, but
they earn enough to keep going.
Many artists do this too. They hold a show every 6 months
and in between shows they create a whole bunch of works, which don’t all sell.
They earn enough money to keep going.
For app developers this could be a good model. Focus on
putting out a bunch of useful and relatively low cost apps each year. Do it right and you might be able to earn
enough to work for yourself, but you could do this in your spare time too.
You are more likely to find what works and make a successful
app via this route than spending years working on a single killer app.
Artists too don’t often spend years on a single work, fixing
it up when they have inspiration. They take the lessons learned and put them
into future work. This is called growth.
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When you learn to recognise the different paths to success
you will be more likely to succeed in the long term. And if you manage to hit
the big leagues through doing this, then we hope you can become billionaires
too; but don’t count on it.
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