How to develop social networks when you’re a start-up

When developing social networks, the biggest challenge for start-ups may not be safeguarding against failure so much as preparing for massive success.

The first commandment for building a social network is: Thou Shalt Scale. A social network needs to be able to cope with huge spikes in users – perhaps multiple millions – and if it can’t, users will abandon the site in droves. It is also critical to make a site ‘sticky’ by providing compelling reasons for users to stay once they’re on the site; innovative design and unique, robust applications are therefore an absolute prerequisite.

Users tend to flock to new networks – well, the good ones – but numbers drop off sharply when critical mass is reached. The issues then become scaling back down and, of course, retention. Networks employ various methods to keep users interested, such as notification of applications, alerts for new messages and new activity, and reminders to visit. These all require users to submit contact details and, and for an audience now wary of putting details online, very strong security policies must be enforced across the social network.

If there aren’t enough users on the site at launch, it appears ‘empty’ and potential users bounce off, probably never to return. Start-ups therefore must feed users onto the site prior to launch, either by inviting beta testers to the site or by actively recruiting users from their own networks of contacts – including employees.

Some organisations partner with specialist web site developers to turn their vision of a social networking site into a reality. In this case, start-ups should only seek developers with a strong track record in developing social networks. This is because developing this type of site requires specialist skills to both address the challenges – including the rapid development of unique and robust applications, coping with rapid change, creating fresh design and handling exponential load spikes – and embrace the opportunities.

New Bamboo Top Tips
1. Get feedback early and often. Get people using your social networking site during its development and act on their feedback. Therefore you ensure that you consistently navigate your network towards success.

2. Go cross-channel if you can. Maximise your user numbers by making the site accessible via mobile devices.

3. Plug into existing networks. Including links to established networks – Facebook and iPhone applications for example – will help put you one step ahead of the game.

4. Create a Unique Selling Point (USP). No one cares if you provide the same features as other established sites. Do something different and focus on that completely.

5. Or….target a niche audience. A social networking site is only useful if everyone you know is on it. Facebook initially targetted individual colleges for example.

Acquititions as a viable and great exit opportunity ..

When a startup company is ringing doorbells for capital, investors will often ask what its exit strategy looks like. An exit strategy is your plan to turn your startup company into some sort of payday for investors. Two common means of cashing your investors out are getting acquired or going public.

While we'd all love to believe our company will list on the Nasdaq and become an S&P 500 industry-shouldering stalwart, that rarely happens. The road to becoming a public company is long and has only gotten more difficult in recent times. The more likely road to riches is an acquisition by another company.

With this in mind, startups are putting more emphasis on figuring out who would be in the best position to buy a company with their particular offer. They then begin to craft an offering with these attributes in mind.

Effectively, these companies are wiring a direct path from the initiation of the company to the ultimate exit strategy of financial liquidation. By creating a company that is easy to digest by larger companies, a startup significantly increases it chances of being acquired, which gets investors (and shareholders, like you) excited.

Where is the love?

Wiring the exit starts with pinpointing your potential suitors. A great starting strategy is looking for companies with similar business models operating on a larger scale.

For example, if we were starting an online job recruiting site, we may logically assume that companies like Monster.com or CareerBuilder.com would have a natural interest in acquiring our company in order to expand their businesses.

The list of acquirers can be more than just companies that share an identical business model. Often companies are acquired because they offer a complementary service that enhances another company's business model.

Take the $1.5 billion purchase of payment processor PayPal by online auction giant eBay. PayPal was a perfect fit because it had a great payment system that eBay customers loved to use.

To understand where you would offer the most value to your potential acquirers, try putting yourself in their shoes. What would an acquiring company stand to gain by purchasing your company that would make the deal worthwhile?

Perhaps you have a novel technology that would enhance the experience for the rest of their customers significantly like PayPal did for eBay.

Maybe you have captured a large customer base for an attractive niche, such as a doctors-only recruiting service positioned for Monster.com. There's no one strategy that applies to all companies, but if your strategy creates enhanced value for its acquirer, you're probably on the right path.

Get some details

You should also do some homework to learn about what types of companies they have acquired in the past and for what reasons. Public companies that have made acquisitions are usually required to disclose a fair amount of information about their transactions. These Security and Exchange Commission filings are good places to start.

There are a few key details to look for in the filings. First, take a look at how the purchased business fits into their overall business line. Was the company a complementary service or a competitor? Then, take a look at the financial informaiton for the acquisition, specifically how was the acquisition valued relative to the acquired company's revenue.

If you find that companies like yours generally get purchased for five times top-line earnings that will give you valuable insight as to how much your company might be worth when you go to sell. You'll also need these metrics when you return to investors if you are going to raise capital for your business. They'll want to know what kind of return to expect on their investment based upon how similar companies have been valued.

Once you understand who has an appetite for buying companies like yours and what they are willing to pay, your next step is positioning the company to be acquired.

The best way to do this is to build relationships with your potential acquisition targets. Some of them may be competitors who haven't yet exploited opportunities you're already taking advantage of. This is perfect because any asset you build that your potential acquirers don't have is one more reason to purchase your company.

If your company's offering is complementary, start advertising that too. If an acquirer wants to offer a similar service, it's often less risky to buy it off-the-shelf from you. Sometimes, it's even cheaper than developing it themselves.

There's no guarantee that your exit strategy will deliver a big sale for your company. Some amount of luck and timing play into every acquisition. But if you plan on creating a company that is going to be worth a fortune when it's growing like wildfire, the only way to get out quickly is to know exactly where the exit is.

JavaScript Clear Textfield Default Value onClick

So basically if you have a text field with default text like “Enter Email Address Here” and you want it so that when the user clicks in it, the text disappears, this is the code to use. It goes one step further so that if you do not enter anything it puts the default text back and if there is something entered it doesn’t get tripped up and clear it out. Plus it is super simple and clean and tested in all browsers.

Here is the code:

function clearText(field){

if (field.defaultValue == field.value) field.value = '';
else if (field.value == '') field.value = field.defaultValue;

}

Here is how to use it:

< name="emailaddress" type="text" value="Enter Your Email Address" onFocus="clearText(this)" onBlur="clearText(this)">