Startups In The Cloud Era – Things Have Changed

Startups In The Cloud Era – Things Have Changed

There are numerous startups of all varieties of purpose and goals. We have seen great successes and great failures. We have seen a lot of money being made on fabulous exits, but also seen a lot of money lost as well.

Things are changing for startups, and in turn, they are changing for investors as well. What affects how startups must work affects how investors must forecast chances of success, and which ponies they want to back. Of course, with progress, change is inevitable and ubiquitous, but the past couple of years have seen the steepest change in this industry’s history. What is this culprit? Cloud computing.

To appreciate the change, and what aspects it is wrought upon, let’s first talk for a minute about the classic challenges faced by startups.

First, of course, is the venture capital issue. This is really why investors exist, but startups can’t solve some of the initial monetary issues they face before approaching investors. Many investors won’t even consider investing in someone with no early demonstrable prototype of some sort. Sadly for startups, that requires some money to achieve 9 out of 10 times, and for that step, they are unfortunately on their own.

The next problem investors can’t really directly help startups with either, is their marketability. Sure, if investors believe in a cause, they can throw money at marketing, but it’s up to the startups themselves to have a product or service that meets a proper demographic, and can overcome the obstacle of them being a newcomer. Unless their service or product is absurdly novel and earth shattering, the startups have to be heard above the din of countless established and successful providers of the same service/product. All investors can do is arm them with the loud speaker, but it’s mostly luck if the batteries work.

But, if startups manage to overcome this, and they have won the investors’ approval with a working prototype of their service/product, they still have to give the investors some justifiable expenses. Just starting out, there’s no success rate to gage them by, obviously. So, when costs for infrastructure such as web hosting, computing equipment and the like come up, how much do they expect investors to invest in? There’s a fine line between optimism and being rational with this. Investors have to be a bit stoic, even if we don’t like to be.

But, cloud computing is changing some of this, especially in the software industry. With cloud computing, operating environments for prototypes and virtual environments are affordable to access, so much so that startups need very little initial capital to implement them.

They no longer need powerful infrastructure to develop and demonstrate upon, rather offloading this to a server somewhere that they rent on the cheap, due to sharing it with others, over a daisychain of machines.
Cloud computing doesn’t alleviate their problem of being heard, though cloud and software service models for easy advertising and outreach online are starting to appear. They’re not really ready yet, but this will change this problem soon enough, though I can’t see it being an end all solution.

People are fickle creatures, and just because information reaches them does not mean they will choose to notice or acknowledge it. The same infrastructure they later expect investors to invest in, however, is entirely more affordable, so what they may expect investors to enable is a fair deal more than it once was. This is great for investors, as it means their startups of choice have a greater chance of success with less risk to us.

In light of this, here are some tips I assembled from experts for startups out there, in this new cloud age, for success, and for gaining investors:

Focus on Your Current Platform Right Now

Unless you’re designing something mobile specifically, don’t worry about mobile for the moment. Trying to bite off too many platforms to chew will be costly, and the complicated models of deployment this spawns will turn investors off. If you’re primarily mobile, the same goes for other platforms in its stead.

Prototypes Can Wait

With cloud computing being so affordable, you have time to test your concept in a number of scenarios before even approaching us with prototypes. Through this you can see room for improvement, added functionality and overall improvement of your model. Knowing cloud computing is giving you better initial facilities will mean we will raise the bar on what investors expect out of the first “ugly” prototype.

Take Advantage of Cloud Computing Collaboration

Utilize the collaborative nature of cloud computing to reduce your costs in development time and monetary expenses. With cloud computing, you can work on your product collaboratively from different locations, even from your mobiles while you shop if you like. Take advantage of this team omnipresence, because investors will be expecting you to.

Multi-Prong Profitability Structure

Have a plan that uses cloud computing’s multi-prong profitability structure to get maximum gain from any implementation. If you want a free model, investors expect you to use ad software services to make it still profitable.

Accessibility for Investor Observation

Cloud computing makes it possible for investors to easily access revisions of your prototypes in real-time, which saves you money and time, and pleases us as potential investors. Take advantage of live box cloud software which lets investors see your current prototype builds as they are worked on and released. Investors like being in the know, and will be more willing to divulge further investments more easily if we have this level of observation at our disposal.

Unfortunately, cloud computing can’t entirely solve the outreach. It also can’t guarantee a product or service is a good idea, or that the people will care about it. It also cannot resolve all man our issues, and cannot guarantee investor interest.

So, cloud computing is changing how investors judge proposals, and it should be changing how your startup is approached as well. Being flexible is preferable being stiff. Investors are changing in light of cloud computing’s ramifications. Startups must join in this transformation.

By Omri Erel,

Omri Erel is the lead author and editor of “SaaS Addict”. And Marketing Director at WalkMe – the World’s First Interactive Website Guidance System.

About CloudTweaks

Established in 2009, CloudTweaks is recognized as one of the leading authorities in connected technology information and services.

We embrace and instill thought leadership insights, relevant and timely news related stories, unbiased benchmark reporting as well as offer green/cleantech learning and consultive services around the world.

Our vision is to create awareness and to help find innovative ways to connect our planet in a positive eco-friendly manner.

In the meantime, you may connect with CloudTweaks by following and sharing our resources.

View All Articles

Sorry, comments are closed for this post.

Banking On Recurring Revenue In The Cloud

Banking On Recurring Revenue In The Cloud

Recurring Revenue In The Cloud Many common traditions have held up for centuries (Thanksgiving dinner, anyone?), but the post millennial world of business and technology has perennially followed the idea that traditions are meant to be broken. Take a look at the radical change in the way content is consumed.Traditionally, cell phones were used as…

Cloud-Enabled Managed Hosting: 5 Things A Cloud Provider Should Offer

Cloud-Enabled Managed Hosting: 5 Things A Cloud Provider Should Offer

Cloud-Enabled Managed Hosting The IT industry moves at light speed fueled by constant change and advancement. No area of IT has been affected more by this change than the hosting and managed service space. Advancement in the cloud and its delivery models of IaaS and SaaS have caused a monumental shift in the way IT…

The Open Performance Grid: Utopia Comes To Tech

The Open Performance Grid: Utopia Comes To Tech

The Open Performance Grid “For what greater wealth can there be than cheerfulness, peace of mind, and freedom from anxiety?” So wrote the English author and philosopher Sir Thomas More in his novel, Utopia, almost 500 years ago. More’s utopian dreams continue to thrive in one guise or another to the present day; in the…

Are You SURE You Are Ready For The Cloud?: Financial

Are You SURE You Are Ready For The Cloud?: Financial

Are You Cloud Ready: Financial In my previous article, I discussed several different points about moving to the cloud. A lot of companies do it for many reasons, but the majority of them in my experience normally come down to two major reasons: 1) Financial 2) Security of business. The security tab isn’t the same…

Understanding Big Data – Are Big Data Analytics Your Friend or Enemy?

Understanding Big Data – Are Big Data Analytics Your Friend or Enemy?

Understanding Big Data The term “Big Data” is highly reminiscent of terms like “Big Pharma”, and it has a tendency to make consumers and professionals alike a bit nervous. However, whereas Big Pharma refers to large pharmaceuticals companies with market sway and seemingly countless political lobbyists, big data simply refers to the exponentially rapid growth…

How Successful Businesses Ensure Quality Team Communication

How Successful Businesses Ensure Quality Team Communication

Quality Team Communication  (Sponsored post courtesy of Hubgets) Successful team communication and collaboration are as vital to project and overall business success as the quality of products and services an organization develops. We rely on a host of business tools to ensure appropriate customer interactions, sound product manufacturing, and smooth back-end operations. However, the interpersonal relationships…

Featured Sponsored Articles
How To Develop A Business Continuity Plan Using Internet Performance Management

How To Develop A Business Continuity Plan Using Internet Performance Management

Internet Performance Management Planning CDN Performance Series Provided By Dyn In our previous post, we laid out the problems of business continuity and Internet Performance Management in today’s online environment.  In this article, we will take a look at some of the ways you can use traffic steering capabilities to execute business continuity planning and…

Featured Sponsored Articles
Optimizing Digital Marketing Through Accessibility & Aesthetics

Optimizing Digital Marketing Through Accessibility & Aesthetics

Optimizing Digital Marketing In The Cloud Marketers are constantly looking for better ways to tantalize and engage customers, and there’s no space more competitive than the digital universe. Deliberating over pleasing layouts, effective calls to action, site responsiveness, and much more, digital marketers have more than enough to keep themselves busy without understanding the intricacies…

Featured Sponsored Articles

CloudTweaks is recognized as one of the leading influencers in cloud computing, infosec, big data and the internet of things (IoT) information. Our goal is to continue to build our growing information portal by providing the best in-depth articles, interviews, event listings, whitepapers, infographics and much more.

Sponsor