Page 135 - 6 Secrets to Startup Success

114 6 SECRETS TO STARTUP SUCCESS

are the speedboat, still at dock. Spend time clarifying your intentions.
Lay down a rough outline of your future business. What will your
business look like after it is up and running? Will it be large or small?
Selling products or services? Mass market or niche player? Consumer-
focused or B2B? Known for blazing speed, high quality, or low price?

Mark Kahn’s idea for his second startup, TRAFFIQ, was to create
a platform directly connecting buyers and sellers of online ads—to
become the eBay of Web advertising. The value proposition was
clear—he was not the first or the last to envision an online advertising
marketplace. He believed two factors would make or break his ven-
ture. The first was building a high-performance, high-capacity tech-
nology platform. The second would be his ability to scale: to attract
and serve a large number of buyers and sellers in an ever-increasing,
self-reinforcing loop of success. The value of the marketplace would
be directly proportional to the number and quality of its users. Using
the eBay example, Mark explains, “On eBay, if a buyer is looking for
children’s toys and I’ve got a lot of sellers who are selling presidential
pins, that’s no good. The market is not providing value. So it’s about
making matches. And if TRAFFIQ makes matches, then it provides
liquidity, and if it provides liquidity, it builds scale; and if you can
build scale, you make it defensible.”

Similar to TRAFFIQ, Mark Williams positioned Modality as a
conduit between buyers and sellers. On one side were the traditional
print publishers, who owned large vaults of branded educational con-
tent. On the other were iPod-toting students, who wanted digital ver-
sions of educational titles on their mobile devices. Modality’s
approach was to lock up rights to publisher content in the form of li-
censing agreements and move as quickly as possible to convert and
sell this content to iPod users. Because of the free-wheeling, Wild
West nature of the AppStore distribution channel, a make-or-break
factor for Modality would be its ability to transition from a wide array
of early products—in effect, a kind of experimental spaghetti-against-
the-wall approach—to more focused investment in bestselling prod-
uct categories. In the market fog of nearly 100,000 competitive titles
being sold in the same channel, gaining and analyzing relevant sales
data would prove as difficult as it was vital.

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