Starting a Website Biz? 3 Huge Mistakes
1) Offering a
service or product that is illegal.
I’ve seen a number of website plans where the whole thing revolves
around violating other peoples’ music copyright. And isn’t that how Kim Dotcom allegedly made his fortune –
running a website that violated copyrights on movies and music? It does not have to be this
elaborate. I’ve seen website plans
that violate local laws about show booking and job placement. These things are usually covered by State
law, so you need to check it out before you plan it. I saw an online business offering custom wine labels. Wine labels are carefully regulated and
approved by the federal government, and you can’t just go creating cute ones
and slapping them on bottles of wine.
If your idea has never been done before – there may be some
really good reasons why. And if the
funding scheme for your business has never been done before, it is probably
illegal. Not possibly, but
probably. Research and
consult.
I’ve seen people plan web businesses, get funding, build websites, and
even start running their businesses, only to be cut short because their
enterprise was essentially illegal.
It’s rarely as dramatic and over-the-top as tactical teams in helicopters landing on Kim
Dotcom’s driveway, but it may be just as devastating.
IDEA: When you come up with a plan for a web business,
research it first. Then consult
with a lawyer or two in the field in which your business would be. If it’s music, check with a music
lawyer, if it’s medical, check with a medical lawyer. And on.
Whatever it is, before you get investors or put in work, check out the
idea.
2) Picking a
Name that Someone Else Already Owns. Twitter made this mistake – they picked a name that
belonged to another online service.
Eventually Twitter became so rich and powerful they were able to get the
trademark on the name, probably with a pay-off to the name owners. Don’t make the same mistake. For more on this, see Naming Your Creative Business.
3) Giving Away Big Chunks of Your Business Without Meaning
To. If you saw “The Social
Network,” you know that Mark Zuckerberg allegedly gave away a portion of the
not-yet-created The Facebook when he accepted money from a couple brothers and
agreed to build them a social website.
Giving away a share of your business can be as easy and
casual as a chat in a hallway or an email. And it is much easier to find yourself giving things away if
you are desperate for money.
Think. Read up. Know some
business and legal basics before you begin. Bring on a good lawyer to form any
working deals.
If you need a refresher course, watch “The Social Network”
again.
And remember this handy
rule: If you don’t make money, no one will bother you. But the minute you start making money,
people will come out of the woodwork claiming you owe them a share. So you need to think strategically and plan ahead.