Creating Startups in Gray Areas

In 2002 or so, I had an idea to create an internet magazine, inspired in part by CNET. CNET had done well enough overall, including surviving the dot com bust, and seemed to have a model that worked. I thought about what might make sense in the market and what may not already exist. A freelance fashion business consultant, stylist and sometimes journalist at the time, I found that people got a lot of inspiration from what other, everyday people were wearing. No media outlet really offered this at the time. I launched Stylediary.net in 2004, the first fashion media property that did.

Dozens of copy cat sites and similar concepts have launched since, including one recently at TechCrunch 50. The trend can also be seen today in major print magazines like Lucky, Teen Vogue and Elle.

In 2007, I sold Stylediary to another company. Two months after the sale, I successfully expanded into television/entertainment, catching the attention of big network execs in a matter of hours. I am by no means some kind of business rock star. I didn’t attend Stanford or know anybody. I just focused on creating what didn’t exist, both then and now.

Many refer to this as “gray areas,” and they can be very good for business. Here are my five rules for finding them:

1. Take your time. I want to launch another web start up but I’m patient. I knew the economy would more than likely be tough this and next quarter, and that it’d mean money for young startups would be tight. Rather than burn investment capital trying to survive, I’ll wait and do something when the climate is steadier. Think through everything before you move. There is always time for good ideas done right.

2. Do the homework. Finding what doesn’t exist in a category requires that you become a bit of an expert on what does. Absolutely, at all times, deeply research the industries and markets, as well as your and other ideas. I could have told the half dozen struggling video platforms in the market that it was too late to be the next YouTube and too early for web TV, as well as that professional content (webisodes, etc.) would be easier to monetize – as far back as in 2005. Dig in before you launch – it’ll help a lot.

3. Be your user. Many companies launch sites and features that they think users want based on top level trends, ignoring what’s useful and appealing to their own, actual audience. “ToolBox” was one of Stylediary’s most popular articles because it gave more tactical style advice than just simply saying, “Wedges are hot,” like most magazines at the time. Get inside your users’ world and you’ll see what might be missing – another gray area that’s usually ripe.

4. Wear the watch. Timing is everything in internet business. Too early or too late will more than likely lead to expensive repositioning/redesign, long lean years, or slow, painful death. Gray areas are a lot like forming storms on the horizon. Look for the clouds and map your launch for when lightning strikes.

5. Always reinvent. A winning idea in the market is a good thing as proof of concept helps. But, duplicating it without any variation isn’t wise. This includes better/different features, which a lot of entrepreneurs mistakenly think will do the trick. You have to put a dynamic new spin on what’s already working online to create something in a gray area.

Patricia Handschiegel is the founder and former CEO of Stylediary.net, and the founder of 9 Group, a digital media and internet consulting startup launched in 2008. A respected speaker and industry voice, she resides in Los Angeles. You can find her online at www.dailypatricia.com.