In Part 3 of 4 in our interview with Adam Ostrow of Mashable, we had a chance to discuss his thoughts on entrepreneurship. Our interview continues below…
Steve: I would like to switch gears a bit and talk about entrepreneurship in general. Since you are a serial entrepreneur and have been through many business cycles, with the economy in a tough spot these days, do you feel it is a good time to start a business?
Adam: It depends what type of business. I think if you’re looking at something that is completely advertising supported, it’s not the best time to start, since advertising is typically the first thing to get cut during a weak economy. People will be looking to save money, and there are lots of ways that the Internet can help them do that – many of which probably haven’t been thought of yet. Businesses will be desperate for customers, and customers will be desperate for good value. Smart Internet businesses will find a happy medium between the two.
Steve: One question I get from people thinking about starting a business is “do I need a business plan”? I tell them that if they are a freelancer and selling their skills, they don’t, but…if they are planning to grow a business that they can’t run without one. What is your philosophy on this type of thing?
Adam: These days, you can start an Internet business for the cost of the server – but – there is also the huge cost of time that’s going to be invested in developing the product. Thus, my philosophy is to always have at least a plan of what the next 10-15 next logical steps are in the development of the business, and adjust accordingly as conditions change with your customers and the market. There should always be finite goals, and if those goals aren’t being met, you need to adjust. As far as a traditional business plan goes, I don’t necessarily put it all down on paper, but I won’t start anything if I don’t think I’m solving a problem, have a competitive advantage, and have some idea of how I’m going to make money – the type of stuff you’d typically include in a business plan.
Steve: According to Gartner, “Web 2.0” is in the “Trough of Disillusionment” and over the next 12-18 months, since the hype has worn off, projects that use these technologies will be folded into mainstream software development and adoption. Do you agree or disagree and why?
Adam: I agree. Like I said earlier, I think the term “Web 2.0” has been played out, and most of the technologies that are associated with it are now expected, not novel.
Steve: I would like to get a “Top 5” from you. Since we are facing some tough economic times ahead for possibly the next 12-18 months, what are the Top 5 things you would recommend new entrepreneurs running a business should do to weather the storm?
Adam:
1. Be insanely cost conscious – cut everything unnecessary
2. Be opportunistic – lots of people/business will simply “give up,” creating an opportunity to pounce on undervalued people and assets
3. Keep your day job – until your business is ready for full-time commitment, having cash flow removes a lot of burden and pressure on you and your family
4. Keep your cash active – even if you don’t have a lot of savings, earning some interest on it is better than keeping it under the mattress. It’s a month or two of server costs for free.
5. Balance – I’d go crazy if I didn’t do *something* other than work every day. Go to the gym, go for a run, go watch a movie … Personally, I actually can *feel* when I’m not doing enough stuff other than work on Mashable/my businesses, and it feels miserable.
Interview Parts with Adam Ostrow:
Part 1 – Intro
Part 2 – Adam on Mashable
Part 3 – Adam on Entrepreurship
Part 4 – Adam on Adam
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