Lessons From My First Startup Failure
It’s been a while since I last posted here, and good reason — I’ve been trying to run a startup! As this is a technically focused blog — and given my startup experiences were mainly commercially focused — I didn’t have all that much to say here. But, now I’ve experienced my first startup failure, I thought I’d write about it here (even though it’s not really technical content).
It has become somewhat customary for entrepreneurs to write about the good times and the bad. In either case — often even more relevant in the case of the bad times — it seems quite useful to share with others the lessons one learnt along the way. So, this is me sharing some of the lessons I learnt during my first startup failure experience. Let’s get on with it.
Be wary of complex dependencies
If your business model is reliant on others (partners) investing in changes to their own technology systems, your chances of success are considerably lowered.
All startups have an implicit dependency on customers buying their product/service. Any additional dependencies just hugely complicate things. Try to keep as much within your own control as possible.
Take good feedback with a pinch of salt
Most people will tell you how great your idea is — it’s human nature. The only way to be sure you’ve got a good product is by getting someone to actually pay you. Until someone actually hands over money for your product/service, you haven’t validated the problem you are solving (this is skewed somewhat towards B2B software).
Identifying a problem is not enough
Whilst clearly important, it’s not enough to just identify a problem. Yes, your business may well solve a real pain point in theory, but it still doesn’t mean you can actually execute on it successfully. Commercial complexities (e.g. a deeply tangled industry) can still make even a good idea impossible to actually execute on, especially for a startup.
Be patient before diving in
Even if you can afford to, it might not be a good idea to quit your job until you’ve found something you are really passionate about building/solving. Identify a problem you’ve had in your own life/job, don’t try to force ideas out of nothing — it’s contrived. You have to be patient and let the idea come to you — if that means working for others until you do, then so be it.
Make the most of working for larger companies where you can network with those in business areas you are not familiar with. The gaps will be there, you just need to put yourself in the position to see them.
It’s much harder than you could possibly imagine
It’s going to be infinitely more difficult to succeed than you think. Success is a combination of a good idea, impeccable execution, luck, who you know etc.
There is a myth doing the rounds that it’s easier than ever to start a startup. In reality it’s just a cultural mind shift, the actual chances of succeeding are just as low as they have ever been. The ‘anyone can build an app’ delusion is really unhelpful.
And, it will take five times longer to succeed than you probably think it will. Most successful startups have been operating a lot longer than you think they have — you’re facing many years of blood, sweat and tears (and you still might fail).
Also, be willing to acknowledge, therefore, that the idea of running your own business might look much better on paper than it does in reality.
A tech startup is not just about tech
Marketing and sales will most likely be 80% of the effort in a startup’s success story. Don’t be under any illusions — a good product won’t sell itself. A warning for you techies out there — don’t be fooled into thinking that you only need tech skills to get a business off the ground. It’s not true, seriously!
Accordingly, non-techie entrepreneurs shouldn’t feel disadvantaged that they don’t have tech skills. This is not to say that tech isn’t hugely important (I obviously think it is), but it’s not a one-way ticket to success.
Recognise when the game is up
Be prepared to recognise when it’s time to call it a day. Cut through the false positives in order to make an objective assessment of your business. There’s a fine line between sensible persistence and blind optimism. It’s not always advisable to keep the faith if every indicator of business healthiness is against you. Maybe it’s just not a good idea, or maybe the market is just not ready, for any number of commercial reasons, to accommodate your product.
Don’t do it for money
Don’t bother doing it if you are doing so in any way for money. Be totally honest with yourself from the outset. Unless your only reason for starting a business is to build a great product/service then don’t bother. For most people, it they are truly honest, the idea of becoming rich is the real motivator deep down.