Know thyself

Let’s face it: everyone wants to build an online business. Virtually everyone I know has ideas for web and mobile apps and businesses. Add to this the fact that Americans are risk-taking entrepreneurs and you have the perfect conditions for many people to lose their shirts.

Start With No
When people suggest that they want to build online businesses or start companies in general, I usually advise them against it. And why should I encourage them? Telling someone not to do something is a low-risk proposition. Dedicated entrepreneurs will proceed no matter what. Not-so-dedicated people will probably give up, saving themselves lots of time and money. Building a website is cheap; building an online business is really expensive.

Play to your strengths
If you do proceed, you may have more success building businesses and products that fit your situation. By your situation I mean how much money, knowledge, experience and connections you have. Leverage every advantage and avoid weaknesses.

All Skills, No Bills
If you’re a developer with low / no people skills, then build consumer-facing products that you can iterate on constantly. Don’t try to build a b2b product that requires a sales team and schmoozing for success.

Dumb Money
If you’ve got lots of money but no experience or tech skills, then spend the cash buying a team and experience. Hire freelancers create relationships, learn how to manage them, get them excited, and be able to deploy them on a variety of projects that are short-term in nature. Learn fast, find a dedicated team, and you’ll figure it out.

Relationships
By themselves relationships are helpful but they don’t help you execute. They won’t help you build a great product. So use relationships to get industry knowledge and do research on what products to build. You can be the business side of a startup in your domain.

Knowledge
Having deep industry knowledge is like relationships; it will help give insight about products and services, but won’t help you create great products. Again, you need to wrap a team around you before embarking on the business.