[This post is in draft - I got kicked out of the coffee shop I was typing it in *grin*]
Just read posts on Memeburn by Justin and Sue which are absolutely brilliant stabs at giving advice to those folks with great ideas and looking to start up that company they're envisioning. I am often personally approached by students and various folks in the ICT industry, interested in involving me in their business or ideas and Justin's post is very insightful (one of the best and it's clear he has some great experience) and so is Sue's post.
Allow me to add a few more thoughts;
1. If the founders are younger than 35 years they must involve a successful business person (45 years or older) - experience ensures you're focusing on the fundamentals from the get-go! I've recently started a couple companies and involved an industry silverback (won't mentioned his name now) who's insights/advice/input/assistance/compilation of documents in the following areas are proving invaluable;
* Org structure
* Roles and responsibilities
* P&L assignments per business unit/team
* Shareholder agreement compilation
* Hiring & firing policies
* Disciplinary actions/procedures
* Employee code of business ethics
* Company registration/auditing/reporting/declarations
* Legal rights and policies etc etc.
* Most importantly - Intellectual Property protection/theft!!
Note: this is the boring stuff but ensures you're not sitting in a CCMA court hearing 4 days a week when your company is 3 months old...because your politically incorrect joke offended that DBA!
2. Research - Data beats opinion - numbers numbers numbers - ensure you understand the market and you understand the scope/size. Spend money on gathering official industry stats or commission a reputable orgs to do the research for you. If you're really smart, dredge the web and you'll find tons of valuable data...else...take the CEO or Research Lead from that org out to drinks...get him passionate about your idea/company and he may help get what you need...'wink' Hey, alternatively, get off your backside and do you own research...create the questionnaire and visit those universities, walk through the mall and stop to ask people, ask your family, etc.
3. I am going to state this controversial opinion irrespective of the traditional view(s) out there; Don't always focus on a revenue model FIRST - focus on the user (look at Google's ten things - the first one is the user!) - if your product makes a fundamental difference to the consumer or individual, the revenue model you can figure out later (I am assuming that your funder/VC/angel investor/dad/mum/etc you'll have to sell on this!).
Most times, especially in the online world, aggregation and adoption should be your initial focus - Google just focused on the best search user experience. Adwords came later! Look at Twitter...they didn't have a revenue model - click on these 1 2 3 4 articles to get an idea of the sort history regarding this matter...and then finally this article - people were establishing businesses on top of Twitter before they were making a single cent! Because of their massive adoption the Twitter Firehose api was born and they licensed their real-time traffic to the static search engines like Google, Yahoo, Bing!...and further opened it up to all! We could go on about various revenue models; subscription, advertising, blah blah...not now :)
BUT - if your deliverable is a physical product or specific service...understand your margins - you may be able to generate tons of revenue but the cost/effort to deliver is not worth the while!
4. Make sure what you build can be atomized and distributed - ensure it's open open open technologically/architecturally! (see above Twitter example for value of this)
5. Start by using as many free platforms and services you can get online - drive down costs in this regard and re-use - besides email, skype and the other obvious business tools...here's an example; your marketing and awareness costs; Viral adoption is huge...whilst ensuring you're open...ensure you have a strong social media strategy - don't spend money on magazine ads, billboards, etc. Social media has never made you more powerful when driving awareness - involve a social media guru and engage folks that understand this world! Facebook, Twitter, blogs, blah blah are free and extremely powerful tools!
6. Run it from your garage first - forget office space, decor and receptionists - don't need to say more! I'm about to get 10-15 folks to occupy the bottom floor/level of my house...bean bags, blow up couches, sleeping bags and free food baby :)
7. Focus focus focus - sniper fire versus shotgunning - get 3-5 clients (if applicable) and go deep...and/or you could build a million derivatives of your application but start with the top 3-5 first!
8. Competition - Why you? Who else could? How long will you have first mover advantage? Stealth versus "Hello World" approach? [to be completed]
9. Your business plan should be data-driven, verbose but no more than 5 pages - the appendixes is where you wax lyrical! If you cannot position your company, present the vision, describe the tangible value/returns, provide a roadmap with clear measurable milestones, describe the risks, and outline the costs/spend...in 5 A4 pages...you're...well...not going to get funding from me ;)
10. You & yours - ok, this is where I'm going to sound a little negative...but it's just an attempt to ensure you're doing the proper personal and situational reality checks! Look at yourself in the mirror and ask yourself whether you are an entrepreneur and/or is the time right now, the right time... Is it and are you really?
Ok, ask yourself these questions; What's my present personal financial situation/analysis? i.e. can I afford to take the risk(s)? Did I or my partner have kids recently or do I have several toddlers hanging on? Am I able to give up all the time and effort required to make it happen? Work/Life Balance will be thrown out the window when you start! Am I able to submit some form of tangible "skin in the game" should an investor ask me to share the risk? What are my personal daily/monthly running costs? These are just some of foundational questions that may lead to you having to give away significant portions of equity to cover the risks you and a potential funder may be willing to take.
Then there's the "you" part of this... Do you have the stomach for it? Can you handle the pressure, accountability and likely failure? Can your crew around you handle it and/or can you support them through the oncoming tough times? Are you able to handle the responsibility of employing people who have families to feed? What's your emotional state of mind and current ability to handle stress? Can you think on your feet and change mid-stream whilst injecting creatively with practicality into everything? Do you need structure and predictability in the workplace? Here I'm simply trying to get you to understand that fish strive in water and birds strive in the air...(remember the proverb about the bird who fell in love with the fish?)...we're not all cut out to be startup founders...and coming to the realization that your great idea may actually require a different personality to personify it...will save lots of tears and frustrations!
P.S. Founders...again...surround yourself with people that are stronger and more competent than you - an echo chamber will be the death of your business!
Lastly, when building your team, try to stick to this; choose insane passion and a perpetually positive attitudes, combined with integrity, over any level of competency!