Not able to raise funds? Indulge in supplementary businesses to fuel your idea!
Often entrepreneurs create a supposedly awesome product assuming they would raise money and brainstorm on the business model once they have a million people using their product. The harsh reality is that it's very hard to raise money and building a complex product, which does not generate revenue, will most likely need a lot of investment capital. This means founders will have to spend months or even years running around and asking (even begging) investors for money. This usually brings no results and ends in misery for the founders.
The more rational way to achieve your grand vision is to start by building a cash-flow business, which would provide you with a lot of connections besides helping you make money. Then you can re-invest that money into either growing the business or starting another one in a bigger and more competitive industry, depending on what you want to do.
Let me give you a few examples of my past ventures:
I have a friend who runs his own web development agency (as millions of other people do). Since such agencies are always in search for orders, we agreed that they would pay me 25 per cent commission on all the sales I would brought through the door. So whenever I would meet someone who wanted to build a website or mobile application, I would refer them to my friend and earn a commission for the same.
Another acquaintance of mine had a few big Facebook fan pages where he shared funny jokes, pictures and videos. Even though the engagement rates were huge, he wasn't making any money. So I proposed to create a jokes website, promote it via his pages, and split the revenues. The website development and content acquisition took me around a month (one could do it much faster) and cost $400. Post that, our traffic started growing like crazy! In our third month we had close to a million unique visitors and over 18 million page-views. We monetised everything with ads and made a five figure profit every month.
Currently, I'm working on an online coupons website called ChameleonJohn.com for the US market. Even though we are still at an early stage, we have been making money right from the first month.
Eventually I also decided to spend some time travelling around Asia and Europe and so I created a social media firm that only manages Facebook fan pages. Like any other agency, it creates a personalised strategy for a company's fan page and posts relevant content, engages with the audience, and generates weekly reports on it. All my employees are contractors and paid on a client-basis. Now, I work only 10-20 hours a month and earn enough money to travel to countries like Thailand, Vietnam, Malaysia, Indonesia, Philippines, Spain, and the UK, among others.
However, in most cases, your first business will not be something you will continue to do for years. And that's good. You will have made new connections, some money and learned a ton from it. Then you can re-invest your time and money into a direction of your choice. So take off those purple glasses, build a down-to-earth cash-flow business and don't stop seeking your dreams.
(Laukaitis is a location independent entrepreneur. Among his online businesses is a coupon site ChameleonJohn.com, which also has an office in Mumbai. As told to Techcircle.in's Nikita Peer)