How Generation Y Starts Businesses

Rather than thinking outside the box, those creative types at The Instructables went ahead and built their own box. So far, it's working -- they've been going for three years, and they are now a profitable do-it-yourself content site, with a 'magazine of the future' business model that has reached break-even.

They've had to shift what the box was for since they started, as I found out today when I sat down with founder Eric Wilhelm and community manager Christy Canida. When I wrote about the Instructables in a column I did last year on getting ideas from outside your business, their plan was to sell software to help companies manage their own communities. That's gone by the wayside, in favor of the new media publishing model.

Instructables was the first spin-off of a nascent idea incubator called Squid Labs, which has now started up five companies aimed at new markets. Given that the Instructables site encourages people to do-it-yourself and then share, it's no surprise that Eric's published a 16-step guide to how to start a business. Drawn from the experiences of the folks who started Squid, it's an idiosyncratic guide that won't work for everyone, but it's a fun look at how some of today's brightest young minds are tackling the problems of creating businesses. There are little tidbits like picking a location based on average kitesurfing wind speeds, tropical bird populations and lack of ex-girlfriends, showing that there's more to starting a business than just work. There's this little bit about how not to start a business, from the "Popcorn machine of ideas" step:

Here's my chance to rail against MBA students: I know of many companies that were formed because some MBA students heard a particular niche market was "under-monetized." They then convince themselves of their passion for their solution, as if the problem was something really painful to them personally. Surely there's money to be made in these types of scenarios, but if this is your tactic for an idea, be honest about your intentions.

Their four dumb ideas you should avoid.

There are also five book recommendations for framing your ideas around starting a business:

• The Innovator's Solution
• Influence
• Buffet: The Making of an American Capitalist
• The 4-hour workweek
• Poor Charlie's Almanac

Confession: Technically, the Squid Labs founders are late Generation X, not Generation Y. But these are arbitrary distinctions to some extent. I'm a Baby Boomer, but born so late in the Boom that I might as well be Gen X.