In my last post, I talked about how the idea for HowLegit? came about. While I was very excited and could see it all in my head, I knew I would soon have to tackle the onerous task of translating into a physical site on the web. This meant taking a number of steps that I could never even have dreamed of understanding. So, first order of business: Eradicate all intimidation. Step Two: Call in on old friend, common sense.
The first thing that needed to be done was validating the idea, and making sure there was no one else out there already doing this, better. This process, better known as “market research” resulted in a 25-page slide deck that became my “Business and Marketing Proposal” for HowLegit?. It included all the pertinent information about the environmental context into which this site would be launched and the internal steps we would need to take to make it successful. The business plan starts off with a very simple explanation of the value proposition of the site. It is easy to get lost in big, fluffly words (like “value proposition”) when writing a value proposition, but the gist of it is: why will users use your site? If you can articulate this, and stay true to it during the course of your development, there is a good chance you will be able to avoid issues like “scope creep” in the future.
Other key elements of the plan are the audience (demographics such as age and gender, where will you find them, what do they like) and the competition. Using tools like Compete, Quantcast and Google Trends for websites, you can get a very thorough overview of your competitive landscape: who the biggest players are and how big your market is (unique visitors, pageviews). You may go back and refine your value proposition after you have studied the market to ensure that you are indeed providing some unique value.
The less fun bit of the Business Plan is the business part for us non-finance types. Who is funding all this creativity, and on what terms? If it is a team, is everyone working on equity or is there going to be some paid resources (and who is paying for them?). Legalzoom is a reliable way to incorporate a new company online. Their fees are reasonable (about $500), and you have access to all your documentation online. A person lawyer may cost you up to $5000, so weigh your pros and cons and decide if it worth it for you.
A tip on resourcing: If there is more than one of you involved, make sure to agree on the equity split, compensation and roles up front. There is always room for modification later on, but you don’t want to be negotiating a $10 million sale of your highly successful website, and finding your team in disarray over who is entitled to what share.
Kaamna Dhawan had a colorful career in corporate America before realizing that the intersection of technology and human interaction is where her passions lie. And no one makes human interaction as fascinating as celebrities do! As the founder and CEO of HowLegit.com, she brings in experience from running 4 successful social networks and a continuing restlessness for learning and entrepreneurship. Kaamna is now six months pregnant, and just moved across the world to Sydney, Australia, proving that technology has truly removed all barriers against productivity and connectivity. She misses the Bay Area and her interactions with Girls in Tech and secretly stalks the organization through the website and Facebook!
Next Week: Outsourcing: Lessons Learned
