Startup Tips Month Extra! - Patricia Handschiegel from StyleDiary

Allen's note: The absolute best part of working on CN has been all of the great people I have met. Patricia Handschiegel is one of those people as she understands the business from every angle. She has become a close friend and also acted as a mentor for me as I grow CN. She was unable to participate during Startup Tips month, but when she asked to still submit tips, I said yes immediately. I hope you find value in her tips below.

As I'm writing this, I'm consulting a friend in Atlanta over IM on how to launch an idea into a company. He has a good concept for a start-up, and I'm sharing what I think the next steps would be to make it happen. It comes at the same time I'm rolling out a new one of my own, and it gets me thinking. What really does somebody need to know in order to launch and grow a company?

I think entrepreneurship is highly instinctive, and that everybody has their own unique skill set and style, but there are definitely a few things I believe are important in creating and building a successful start up business.

Innovate, Don't Duplicate. Success has a weird way of generating regurgitation of ideas, and to me, this can be a sign of inexperience in an entrepreneur. Sites like YouTube, TechCrunch - even my site, StyleDiary - were successful for reasons beyond somebody launching the concept. It's timing, user trends - even technology development and internet speeds. Attempting to recreate something yourself is possible, but you're more likely to see success by making something that doesn't already exist. At the very least, be different. Not in the feature set, but in your concept. A great example? Joost. Video, yes. Like YouTube? No. Differentiate. It can be critical to your success.

Understand Capital. It's interesting that VC funding comes off as being so sexy in the media, when nearly everybody I know says to avoid it if you can. I'm mentored by some of the best people in the business, and the first thing everybody - and I mean everybody - has said is not to do it. When companies raise additional rounds, it's not always a good sign, either. Some ideas need funding in order to happen, but be wise about it. Don't get swept up in the glamour of doing it - there is a good reason why people say it's not an ideal expansion plan.

Focus on the B Plan. It's easy to get excited about the potential of a business, especially when the market's hot like the one we're in and entrepreneurs seem to be cashing out in millions everywhere. Get into actually owning a start-up, and it's a totally different picture. Behind all of those great success stories were years of somebody busting their tail, probably going broke, and struggling along under huge constraints and stress. That's more than likely going to be you, no matter how much you want to believe otherwise. Keep your eye on the second prize - running and developing a successful, profitable and viable business. That's how you'll get the Googles of the world to notice.

Be Careful with Partners, Partnerships and Agreements. Owning a business with somebody else is a lot like moving in with a roommate. You don't really know a person until you're in the thick of things with them. Different people have different entrepreneurial styles, approaches, mindsets - before you marry somebody into your concept, think through whether or not they're a fit beyond their skill set. And when you do choose somebody, be careful with the arrangements. I take an automatic, high percentage on any ideas I bring a partner into, I'm a little stingy about how things are diced up, and nothing happens without signed contracts before anybody lifts a finger. This was learned the hard way. Be careful with who you bring in and what you give them, including friends.

Know That Making Money is Difficult. It's been said that it takes five years to reach profitability in the restaurant business, that you may never see it in retail. Ice arenas are allegedly constant money pits. Yet, somehow, when it comes to launching your own start up, it's easy to think things are going to be different - especially in internet business. Making money is hard in any market, period. Don't think about the 2.3 million you could sell for, and don't believe for a second that revenue will instantly come in. The reality is far different, and you'll fare much better to know it - and keep it in front of you - beforehand.

And Don't Spend What You Don't Have! I've learned under two of the best serial entrepreneurs in telecom, with lots of hits behind them, so I've always run my projects extremely lean. Lots of entrepreneurs I know, however, have made the mistake of spending based on what they think will come in - and believe me, it can be the death of your business. Treat each expense as if you don't need it - and only spend on the absolute that is necessary, including if/when you take capital. Money blows through a business so fast, people don't pay on time or sometimes at all, projections can be off, etc., so never - ever - spend on what you're expecting to come in. Keep all of your expenses, at all times, as lean as you can for as long as you can. You can have the fancy office later.

Read, A lot. I'm slammed all the time. I work a part time job that pays for my lifestyle while running StyleDiary and launching Look|Shop|List, yet I always make time to read the top blogs, business magazines and anything else I can get my hands on any chance I get. It gives me intelligence into the market, what's happening now, what might happen next, and has also played a really important role in connecting me with other people I need to know in business. It has definitely played a huge role in my success as an entrepreneur.

Do Your Thing. It's easy to get swept up in what's around you, especially in the current "Web 2.0" climate where huge hits are happening everywhere and opportunity seems imminent. The problem is, your business is going to be unique to itself no matter how hard you try to skew it. There's a reason why a site like MySpace climbed to the top as it has, and those reasons may not be present when you launch your business. Market climate, user trends, technology innovation, even the economy, can all affect how your company does and who it attracts. I don't try to be anybody else's business - I just try to be my business, and do it as well as I can.

Patricia Handschiegel is the founder and CEO of StyleDiary.net, Look|Shop|List and the Industry Girl Blog with nearly a decade of experience in internet and technology business.