5 survival tips for startups

Between 1995 and 2000, startups mushroomed but many fizzled when the dot-com bubble burst. In today's competitive online landscape, where companies are increasingly leveraging the Internet as a business platform, there are still good lessons to glean from surviving startups of the dot-com era.

Marketing experts and representatives of large Internet brands that once had tiny operations share with ZDNet Asia five survival tips for today's startups, based on their observations of companies that made it from two decades ago.

1. Strong business model and good technology
Eddie Chau, CEO of Brandtology, noted that startups must have a strong business model and core fundamentals, in addition to great technology.

It is only when all three aspects are aligned is it possible for a firm to be robust and resilient, he said in an e-mail interview.

There has to be a concerted approach from the executive team to always ensure that the organization and technology is at the forefront, he explained. There must also be constant adaptation and evolution to remain relevant and necessary in today's competitive business environment, added Chau.

Startups that survived the dot-com era also focused on a "core" which continually met the demands of a particular niche, Chris Tang, director of Bain & Mercer told ZDNet Asia, and even though consumers see or hear less of eBay, Netflix and Shutterfly in the news these days as compared to Facebook and Groupon, they still exist as a viable business.

"Their business models fulfilled a need, providing something that is useful and wasn't just a fad," he said in an e-mail.

Alibaba believes taking a long-term view of their business and not pursuing "short-term profits" is key to longevity.

"We believe in building a sustainable e-commerce model, growing the market and helping entrepreneurs and small businesses move online," Linda Kozlowski, Alibaba's head of international business development and marketing, said in an e-mail.

2. Product innovation
There is never a "finished product", Tang of Bain & Mercer said. In addition, product development is an ongoing process to constantly challenge the status quo and come out with an offering better than what rivals have.

Constant innovation and finetuning of focus to stay relevant were key to startups surviving the dot-com era, he added, citing Amazon and Google as examples of companies that continued to innovate through the years.

Amazon had expanded beyond books with Kindle, differentiating itself from Apple's iPad, while Google rolled out Google AdWords, Gmail and Google Apps beyond search and is increasingly competing with Microsoft in the office productivity suite space, he explained.

Even though Yahoo has "lost its shine", it continues to finetune its focus, and remains a credible player with its still-large base of Yahoo Mail users worldwide, he added.

"The moment you stop innovating, and switch focus to monetization, the end begins," he warned.

3. Start early
"We think big and launch early," Myriam Boublil, communications and public affairs head at Google South-East Asia told ZDNet Asia, adding that as a search engine, the company's mission had been to "organize the world's information and make it universally accessible and useful".

Boublil related in an e-mail that detractors had "scratched their heads" at Open Handset Alliance in 2007, critics had panned G1's launch in 2008 and when the Motorola's Droid launched in 2009, others said it had been a "last-ditch effort by Verizon to compete with [Apple's] iPhone".

Yet, today, Android powers 410 mobile devices worldwide and registers approximately 550,000 activations daily, he said, adding that there are 250,000 apps in the Android Market.

Brandtology's Chau pointed out that most startups feel they can afford to "worry about" branding and marketing after the product is up and running, but branding has to start from day one.

The branding message would affect not just an external audience but employees as well, he said.

Leonard Tan, CEO of PurpleClick Media, concurred. "Try not to limit yourself too much when you just start out in terms of marketing and naming yourself. You never know how far your company can grow, but at the same time, creating your own brand essence," he advised

"Think big," Boublil reiterated. "Only big bets can take you far."

4. Customers first
Always understand what the customer or consumer really wants and communicate with them constantly to improve your products and services, Tan told ZDNet Asia in an e-mail.

"Only if the solution really works will they keep coming back for more businesses," he said.

In addition to Alibaba's mission of "to make it easy to do business anywhere", it believes in "customers first, employees second, shareholders third", Kozlowski shared, adding that success and profitability were outcomes of focusing on customers.

"We would attribute our success mainly to our focus on listening to the needs of our small and medium-sized enterprise customers and providing them with what they need," she said.

Yahoo also prides itself as being "intensely focused on creating digital content and experiences that are tuned to individual consumers".

"We combine innovative technologies with a human touch to personalize the digital world," Jane Prior, Asia-Pacific communications head at Yahoo, said in an e-mail. "By bringing must-see, must-share, must-have digital experiences to the forefront, we help people get more out of digital experiences so they can get more out of life."

5. Increase user base
It is necessary to increase user base at great speed and make sure they "remain sticky" to their sites, PurpleClick Media's Tan said. To that end, search engines constantly improve their algorithms to make search results more relevant and e-commerce sites such as Amazon and eBay work at enhancing shoppers' experience.

Tang of Bain & Mercer advised startups to keep growing their user base and be in markets with substantial size and space to grow a base into a level big enough to be taken seriously. According to him, startups should also be involved in at least two key markets, which he defined as the United States, Brazil, Russia, Indonesia, India and China.

In the case of Google, the company in many parts of the world grew its user base before it had an employee or spent a dollar on advertising.

"The buzz was mostly generated and sustained in the news," Tang said. "But, you are only newsworthy if you have a unique proposition that people want to write about."