Lessons from Startup building
Everyone wants to build successful startup companies. That’s a clear given. And yet, 90% of new startups fail. I have co-founded three startups in the past. The first one started in late 2004, and we had to close shop late 2008 when we failed to secure additional funding, so we had to close it up. In 2011, I co-founded my second startup, and in 2014, we had to pivot away to a different market. 2014 with the new pivoted to startup I was on my third one, and that one had to shutter its doors in late 2016. In essence, all three failed but for different reasons. So let’s look at why they each failed, and how they taught me how to avoid the same mistakes to set my newest startup on a path towards success.
- The first one had paying customers, over 1,000 customers. In fact, we did so many things right! We had the first mobile coupon in the market (pre-groupon, etc). We created a calendar of events for our SMB’s in the entertainment world to drive higher user engagement. And we succeeded with that. We were doing everything right in that we built what the market was willing to pay for. However, we made a few mistakes, such as not partnering with Yelp in 2005, doing all of the videography for our clients which was not hyper scalable. Then 2008 hit, and we got hit hard and had to lay our staff off, and finally ourselves.
- The second venture was following the same path in that we were approached by businesses and their pain points. They began to pay for it from day one! We were plagued though by a few problems. Lack of a strong technical co-founder, a competitor that had raised $150M in the space, geographically not being in the Bay Area — even though I commuted there to meet with my co-founders, was simply not enough. So we pivoted (due to competition)
- The third one was a pure B2C and not B2B like the first two. It was all about eyeballs. All about getting as many people as possible to download the App. One of our mistakes though was that we built our platform on top of Parse. Parse got shuttered. We migrated to Firebase, which was then acquired by Google and broke all of our modules. I also had a personal family matter that required my full attention so I stopped commuting to the Bay Area. Eventually, I chose family over business. And frankly, I am very happy I did.
In each of the above, I learned valuable lessons. It is with those lessons that I dove into Product Management and worked both as a consultant, advised startups, and worked for a few companies. And in one of those consultations with a friend of mine, is what led me down the path of joining him as a co-founder. But, I was very, very thoughtful and specific about when and why I would join. Here are the things that were of utmost importance for me before I dove in deep:
- A B2B company
- An existing pain point
- A solution built based on customer problems, not a solution in search of a problem
- A co-founder whom I could spend a large majority of my time with and enjoy as it would set the stage for the type of culture we’d build together
- The solution needed to be something that I could be genuinely excited about, so much so that I’d have to be an evangelist for it before anything was built
It’s been a fantastic journey so far. We’ve raised early seed, gotten a killer partnership with a data company that has 10% of the world’s Recordkeeper data giving us a clear pathway to profitability — especially considering that we already have revenues coming in. And, our first product is now built and coming out of Beta, with our roadmap being built out with two new products having been identified that needs to get built based on actual customers willing to pay for it.
If you’re new to startups, or interesting in starting one and want feedback or advise, feel free to reach out to me on Twitter or connect with me on LinkedIn.
