We built 30 tech products. 15 have shut down. 7 are so-so. 6 are <6 months old. 2 are blockbusters (>$50 million valuations)
Here are 10 things that I realized was different with those 2 projects
I wrote the below post after we launched our 30th product for our client, just to try to make a note to self on whether any early signs gave away how successful the 2 products would go on to become. I then shared it with my team internally first, and since they loved it felt would make sense to share to a wider audience.
1) Both the startups had 2 founders with varying skillsets
In both cases, there was 1 founder who led product — and was our primary point of contact. We had very limited interaction with the other founder — who was primarily out there leading sales/marketing/fundraising. This ensured that there were not too many hands in a single basket and helped in clear decision making
2) The founders had known each other for more than 10 years
Not exactly surprising is it? But in both the cases the founders had known each other for more than 10 years — and in one case it was 28 years!
In most of the other startup products that we helped launch, I have noticed a lot of founder disputes that lead to tension or founders parting ways at the first disagreement. Founder fights are a lot more common than I had initially thought, and especially for a pre-product-market fit/pre-revenue startup, a nasty founder fight would mean curtains for the company.
I assume the fact that the founders know each other so well made them look through the indifferences and egos. Also given that the founders were so close, they would want to fight through it more for the other, rather than just themselves.
3) The founders’ ideas were in industries that they had prior expertise in
In both the cases, we were working with slightly older first-time founders (> 30 years) who had been through the grind of the corporate routine for many years, laboured through the ranks, established their credibility in their space and identified the gaps in the market before venturing out.
Having been a relatively young founder myself — and struggling for 2 years before finding my true calling — every time I spoke with the founders of these companies, I was amazed by the clarity of thought they had on their core idea. That was probably the only time I regretted starting too early.
4) The beta version of both the products was built within 2 months from the time of UI/UX finalization
These were the 2 projects that took us the shortest time from UI/UX finalization to beta launch (~2 months), which is ideally how the first version of the launch should be. We have seen many a time with our other clients, founders keep adding newer unvalidated feature requests that would bloat up both the product and the timelines.
There is nothing like getting a product out in the market and seeing the first revenue when the fire in one’s belly is burning the brightest (which is in the first 6 months). And the first taste of revenue and validation helps fuel that fire.
There have been a couple of cases with clients where the product cycles were long drawn out — by which time the founders were demotivated, exhausted and the products died a slow painful death even before the launch
5) The sales cycle for both the products were more than twice our average sales cycle
Where these two sets of founders did spend time on though was evaluating and finalizing their tech vendors. Which is ideally how the way it should be.
A lot of times clients try to dismiss the tech vendors as adding no intellectual value — and to just listen to their orders. Many a time, the evaluation process focuses on asking tech vendors to show a website or feature — and ask if we have built it before. This is wrong on so many levels — it means that a similar product is already out there in the market and it also means you are not looking at innovation or originality from your tech vendor — but just looking to build what’s already been built by them. While this helps in shortening the sales cycle, it surely does not help in building a truly innovative product.
But with these two startups, while there was an initial level of screening basis our portfolio, every discussion post that till contract closure focused on how we could add value. They asked us (and I am sure the other vendors too) a lot of questions outside just what we built — and evaluated our design thinking, product development approach, knowledge of the industry/sector, feedback on the idea and ways to perfect it. While this lengthened the sales cycle, by the time we were ready to start, we knew each others’ teams really well too — which surely helped.
6) The value of both the projects was less than our median project value
In spite of all the above — the project value for both the projects’ was in the bottom 50% of the 30 products built. Which meant how laser-focused they were on what they wanted. There were a core set of features that they wanted to be perfectly working before the beta launch — and were focused on cutting off all the flab from the product.
7) Both the startups had five full-time technology hires within 6 months of the beta launch
While from a business point of view, we would love for our clients to continue having us as vendors forever, looking at it from the other side — it does not make sense at all. Having worked with multiple founders’ I feel if one is building a technology focused-product, having an outsourced development team can only get you so far.
Founders’ would have to hire their own in house team to quickly scale and be more nimble.
Both these startups’ realized that and were quick to get a small technology team inhouse in place from their revenues/seed funds very soon post the beta launch
8) Both the startups were in the B2C space and generated their first revenue within a day of launch
These two were the only clients of ours’ that started generating revenue from the first day of the launch. And had pretty solid business models right from the beginning. It also says a lot about their planning and marketing — that they were able to launch with a splash
9) Neither of the startups’ founders was too worried about the technology stack used, the patents or the infrastructure setup.
The founders’ stuck to their core of sales/marketing/product and let us take the call when it came to technology. A lot of times with other clients — a lot of importance was given to the tech stack, infrastructure, patents etc. — which though important in the long run, is surely not important in the pre-product market fit stage. This helped us be more nimble and move quickly since they trusted us.
10) Neither of the startups’ founders was too worried about getting their “idea” stolen and built by us
This is another thing that was refreshing about them. A lot of times founders’ do not completely open up or be honest to us about their ideas, in fear of us building the same. One thing I have realized is that irrespective of how amazing the idea is, the only thing that matters is its execution.
Execution is severely underrated.
No way would we or any technology vendor think of taking whatever we built for you to the market. We have got enough on our plates already.
And even these founders’ realized it. They realized that the only way they could build a really good product was if they transferred all their knowledge about the idea to us. We had to put ourselves in their shoes to ensure the product vision came across, and for that, the founders’ had to be as open and transparent as possible. And open and transparent they were.
I am the founder of a product development agency that primarily works with other founders to bring their ideas to life. More on what we do here. We also have another agency that works on small development tasks on existing products. More about it here
The above article was published for the first time on Reddit here