When i first got the idea for Codeable, I decided that I would test it with some random people – before wasting time on an idea that could fail in the long run. Luckily, there was a Copenhagen startup weekend coming up at the time (march 2012 to be exact) so it was a great opportunity to also meet my long-term business partner, and now co-founder Per, who’s local there.
The event itself had about 150 attendees so they introduced “fire-pitching”, which was when each of us had only 1 minute to explain (or rather “sell”) the idea. I joined the pitching line quite fast, because it was unlikely the audience would still be focused after 70+ pitches.
Unfortunately, we didn’t get enough votes to pursue our idea so we joined another group, where the idea was similar to amazon reviews, with an api so it could be applied to other e-commerce sites (you’re free to steal it, i still think it’s a great one).
What struck me as a huge surprise during that weekend was the lack of any business models, or more importantly, the common opinion of putting ads on the (otherwise free) service/site. There were quite a few mentors/investors there, and pretty much the most important question they had for all of us was how are we going to make money. Needless to say, all of them laughed when hearing anything related to advertising (unless the idea itself was about it). Luckily, they had heard it all before and had a handful of suggestions on how to monetize our ideas.
I’m well aware of the fact that at early stages, ideas are meant to change the world for the better, make the sun shine brighter and flowers bloom all year long, but the fact is, ideas also need to make money, otherwise they are worthless – literally.
So the next time you come up with a great startup idea, ask yourself,how am I going to make money? If the answer involves advertising, think again, chances are it’s a poor business model. Now you might say that [insert your favourite startup here] did it and succeeded, but let me warn you, those are the exception to the rule?