The True Lies of the Startups
Doing a tech-venture is very intriguing, 100's of books written on how to do the right thing for a successful startup. Still every founder has to kind off re-invent things and everyone goes through a different journey. There isn’t a blue print which one can take and get a successful i.e. secure a product-market fit, scale and build a successful startup (read unicorn).
From finding a co-founder(s) and/or ideas to getting to a 1 Mn$ Annual Recurring Revenue (ARR), every journey is different and things working for someone will seldom work for you. And the fun part is that for every aspect of a startup there are 180 degree opposite things which have worked for different people, and some of them are:
1. Hiring your initial team
This is the first lesson you’ll be taught or hear about is how should you hire your initial team, how careful you have to be. It has to be literally hand-picked and successful founders do so…Airbnb is among the most successful startups and Brian Chesky perosnally hired his first 200 employees. And this is how he found his first employee
When hiring their first employee (who was an engineer), Chesky ran through thousands of applicants and interviewed hundreds of people. After six months, he found his guy.
And on other hand you got Uber, where all Travis Kalnick, the founder, did was a Bn$ tweet and he got his first employee.
So who do you want to follow Travis or Brian, not that one is less successful than the other…
2. Scale or Growth hacking
No startup discussion is complete till we talk about growth hacking. The more people i meet the more i hear - lets build the MVP and we will growth hack. There are books, articles, blogs and what not available on Growth-hacking.
While we were trying to get traffic for our SaaS product in my previous startup, there were companies who had product & service offering to hack growth for you. They even had success stories & customer testimonials built around growth hacking. They will create dummy twitter accounts, add followers, write fake reviews and then generate traffic. We didnt go that route because of $$ involved so i don’t know if it would have worked or not. But all it told me that there is a hack to growth.
But on other had you look at Dropbox, linkedin, airbnb and many other successful startups everyone somehow growth hacked. Did they? Look at these successful growth stories, these are no way hacks, these are actual marketing strategies executed to perfection after careful analysis of data.
May be i am wrong, like code, may be there are hacks to get to first 1 Mn users for your product.
3. Pricing — Free vs Freemium vs Paid
Who doesn't want things for free, we all do. And in rush to get traffic or users most startups start looking at freemium models. The general belief is that all successful companies follow freemium pricing model to build the momentum.
But i had an interesting read about Baremetrics pricing model and this is how it starts
Three months ago, we introduced a Free plan…and it nearly brought Baremetrics to its knees
you can read the whole story here.
Many successful products such as Invisionapp or Trello have free plans- free for ever…but Kissmetrics is very vocal in this blog why you should get rid of free plans.
So the puzzle remains, free vs freemium vs Paid day-1?
4. Smart work vs Hard Work
Now this one is really tricky and touchy, all startup founders should be smart, they should really find opportunities to do their work smartly. Its all about smart work as they say.
But the below tweet will let you think one more time….
5 . Pivot or Persevere
You started working on idea- why? Because you sensed a problem, you felt you are passionate enough to solve it. Not just solve it but also build a company or business around it. And then what happened? There are users who come to my landing page, some of them sign up also but they dont use it. And this is how it has been about 6 months in to our launch. So is it time to pivot?
Many companies pivot, Twitter was initially developed as a service for people to send messages to a group of friends. Square was created for micro-businesses to process credit-card payments. And Instagram was born after the founders pivoted from Burbn.
“We actually got an entire version of Burbn done as an iPhone app, but it felt cluttered, and overrun with features. It was really difficult to decide to start from scratch, but we went out on a limb, and basically cut everything in the Burbn app except for its photo, comment, and like capabilities. What remained was Instagram,” Systrom wrote.
How long should you wait, is 6 months enough or 2 years are good or even longer, your guess is as good as mine.
And such moments challenge you everyday, you try to read & learn from others’ experiences but it ends up confusing you more. The trick is to experiment, measure & collect data and make some decisions. To conclude, there are things which everyone kinda agrees upon in the startup world, things like:
- Ideas- they are dime a dozen, this is one area where the mandate is clear. Execution, team, experience — everything matters more than the idea.
- Founders — starting a business is hard and sometimes stressful, its important and advisable to have great co-founder(s), investors love that too.
- Focus on your initial user group, solve a problem for a group of users and focus on customer delight.
- Funding is like air under your wings, it smoothens your flight but don’t really depend on it for take off.
In the end do anything and everything — everyone has done and you’ll be able to do it as well. Enjoy the journey!