Venture capitalist, super angel, or just going it alone?

Getting venture capitalist or super angel support is all good and well. But what's more important than money investment? Actually having a solid idea and a business plan first.
Written by Zack Whittaker, Contributor

A rumbling around the web this morning seems to raise the question about tech entrepreneurs and their own invested time with venture capitalists and super angels. The one thing you need in business to get yourself off the ground is money, right?


The playing field has changed, and Twitter can be used as a shining example. For the last two years, Twitter had been haemorrhaging money and there were two profound reasons as to why.

They didn't have advertisements - which nowadays keeps the vast majority of the Web free, and which is why this site for example dishes them up contextually and doesn't ask you to enter the paywall like many other major news organisations are doing.

Secondly, they didn't appear to have a business model. Now it turned out their 'ongoing experiment' in social media dished out a business model which included advertisements of kinds. Instead of the usual Flash generated banner at the top or the side, Twitter took advantage of the model of the site and accustomed their revenue-generation seamlessly into the experience.

The vast majority of ordinary people would probably not notice any adverts on the site, which frankly gives it a greater appeal.

But Twitter's public API actually turned out to make more money for developers using the API than Twitter who had created it. With an API to work off, developers created the most brilliant Twitter applications to every platform they could, and are still incredibly popular today.

Twitter sets a precedent because although they use venture capitalist support, they had the backing that eventually it'd be able to make money. Not everyone can be that lucky.

The Web on the most part is a free, tempting space of creativity, ideas, thinking and achievement. It's not to say that the Web is a means to an end, because you can't just think of an idea and pop it online in the hope that you'll attract visitors.


The two things you'll need: an idea and a viable business plan. Forget funding for the time being because unless you have a fully working concept or idea already in the works, as long as proof of being able to generate revenue - whether this is online or offline, then investors won't want to touch you with a barge pole.

The mobile marketplace is a key battleground for developers and rightly so. Just as Twitter has developed an API for developers to use and create applications for that platform, iTunes has enabled a platform where developers products can be sold.

But unless you can be seen to "be the next Google" - and really think about that for a second, then it's never going to happen. Plan, plan, cry, plan some more, plan, plan and plan.

Do you agree? Business model and idea first, or would you see finding investors as a priority?

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