Startups Are (Really Fu*king) Hard!
By Cliff Lerner on ALTCOIN MAGAZINE
Why is it that some things just don’t seem to get any easier the second time around? For instance, you’d think that after going through the trials and tribulations of growing a business from startup dust to a thriving publicly traded company with over 100 million users, the next business would be infinitely easier to get off the ground.
Spoiler alert! It’s not.
For those of you who don’t know me, my first company — SNAP Interactive — went through so many ups and downs and featured such an abundance of invaluable lessons on its way to being valued at over $100 million, I wrote a book about the whole experience, called “Explosive Growth — A Few Things I Learned Growing To 100 Million Users & Losing $78 Million, available on Amazon.”
My next venture is a cryptocurrency app called BuySellHODL and while I’ve been determined not to make the same mistakes I did with SNAP, I’m once again reminded that … startups are really fu*king hard!
Of course, this isn’t much of a revelation since it’s widely known that most startups fail. In fact, according to The Startup Genome Project, over 90 percent don’t make it. Still, none of us want to be included in that statistic, so one of my goals is to continue providing insight for others looking to traverse the rocky road of entrepreneurship.
Nobody knows what the future has in store for BuySellHODL, but I’m happy to share what I learn along the way. By following me (Twitter & LinkedIn), you’ll read about my strategies, plans, updates, and successes/failures in real time, as my second foray into the wild world of business leadership takes place.
The content that follows is part one of a series I plan to write about my experience in launching and operating my new cryptocurrency business. If my app is featured on Bloomberg News or CNBC, like SNAP Interactive was, surely at least some of it will be well worth the few minutes it takes to read.
Why Cryptocurrency?
Through my participation in Tony Robbins’s events, I’ve learned that our decisions are based largely on past experiences, which is undeniably true regarding my decision to become an early adopter of cryptocurrency.
The biggest advantage SNAP had, was that it was the first dating app built on Facebook’s Application Platform, so it effectively rode the coattails (along with many other apps like Buddy Media, Zynga, Badoo, Zoosk, and others) of a platform with massive growth to achieve substantial success. I see cryptocurrencies, and Bitcoin, in particular, as an opportunity with similar potential, capable of providing other companies with an opportunity for substantial success.
Why do I feel that way? First of all, over two billion people, worldwide, need it to happen.
Sadly, there are over two billion people in the world that qualify as poverty-stricken. These people aren’t just poor; they’re unbanked because they live in countries with corrupt governments that block every chance they have to raise their standard of living. Crypto is simply their best opportunity to join, and even thrive in the new global economy. By giving them a digital wallet, they will have access to a totally secure and efficient financial alternative, which circumvents the traditional system that’s littered with interference from corrupt governments.
That presents a pretty compelling argument, because anytime the human spirit is given a glimmer of hope to improve itself, it generally goes to great lengths in leveraging its best asset to take full advantage of that opportunity.
You’re probably thinking, “Hey Cliff, that’s a great idea and a novel concept, but those two billion people living in poverty are going to have a hard time leveraging crypto for a better life, if they can’t connect to the internet from their hovel.” The simple answer to that is, all they need is a smartphone and most experts agree that up to 90 percent of the unbanked population will have smartphones within five years. They may not have sufficient food, adequate shelter, clothing, and clean water, but they will have smartphones … yeah, that sounds right. Maslow’s Hierarchy of Needs be damned — at least they’ll have unrestricted access to the latest version of Pokemon Go!
I believe strongly in the ability for cryptocurrency to help the impoverished population of the world. In fact, I’m passionate about it, which leads to another reason I chose the crypto industry for my next business.
Passion
Passion is an incredibly valuable asset in any business. You need it to survive the barrage of roadblocks and emotional challenges that will present themselves while trying to launch and operate your business. Without passion, it will be difficult — at best — to summon the drive and desire to push past the tough times.
Fortunately for me, I’m also passionate about travel. In fact, one of the biggest reasons I left Wall Street many years ago to start my first business was because I wanted to travel more. Unfortunately, that didn’t work out quite the way I planned. I soon learned that there was very little time for travel while managing a publicly-traded company with such rapid growth. There was always a brush fire to put out, and as the CEO, I just about always needed to be on-site with a metaphorical fire extinguisher at the ready.
I know there’s a popular entrepreneurial mantra out there that a healthy work/life balance is critical to a founder’s success, but I’m calling BS on that. A work/life balance may be great for physical and mental health, but it’s not great for the long-term viability of a startup. Simple fact: the founder who works eighteen hours a day is just about always going to beat the one that works nine hours a day. Also, I’ve never heard a venture capitalist say something like, “Let’s put our money into Company A because their founder doesn’t work nearly as hard as the one from Company B.”
How does this passion for travel and my desire to not be relegated to an office building for 18 hours a day relate to my choice of cryptocurrency for my next business venture?
A crypto business allows me much more flexibility with my time and location than most other businesses. It’s an industry that affords me the ability to work as a digital nomad.
As a digital nomad, I can operate from anywhere in the world. So far, I’ve been able to build and run my crypto startup from Tokyo, Bali, and soon I’ll be headed off to Thailand. The biggest advantage of such an arrangement is that my quality of life has increased to far greater levels than ever before. Check out my last blog if you’re interested in knowing more about the various pros and cons of a digital nomad lifestyle.
Besides those reasons, let’s not forget that crypto is directly linked to blockchain technology, which offers several advantages to the global marketplace such as unprecedented speed, total efficiency, and ironclad security among others.
Considering all those strengths, I see explosive growth happening sooner, rather than later, for cryptocurrency. Therefore, I think it’s incredibly valuable to be an early adopter of the industry, and my vision is to convince the next 100 million people to join me.
The Amazing Race
Getting back to my original point — startups are really fu*king hard! Perhaps the most significant lesson I’ve learned at this point of round two in the startup world is the following:
“Launching a successful startup is a race to build sufficient traction before you run out of money.”
With that concept in mind, I’m altering Explosive Growth Tip #2 from my Best-Seller Business Book, which reads, “Once you’ve figured out how much start-up capital you need, double it.” While the basic sentiment of that advice is still spot-on, one very important detail needs to be adjusted. It should read,
“Once you’ve figured out how much start-up capital you need, quadruple your estimate.”
It seems as though the unheard-of will almost always occur (at least once) when starting a business. Whereas most apps are expected to take somewhere between two and seven days for approval to go live, mine took eight weeks for approval in the iOS store, which was absolutely infuriating.
That delay prevented me from doing a proper launch and caused the app builds for iOS and Android to become out of sync, which added to the development cycle. Alas, the product roadmap became an unreadable mess due to my inability to properly test features and understand what was working and what wasn’t.
In addition to that unfortunate delay, cost quickly spiraled out of control to the tune of around $10,000’s. Of course, there was an unpreventable encounter at Starbucks that contributed significantly to this cost increase.
There I was, minding my own business while working at a table in Starbucks, and enjoying a much-needed caffeine infusion to kickstart my process for creativity and innovation. All of a sudden, someone with a backpack large enough to provide shelter for some of those impoverished families I mentioned earlier, emerged from a crowd of people and inexplicably whirled around at the speed of light, which knocked over my coffee and soaked my computer. Cha-ching! That was $1,200 added to the startup costs for a brand-new laptop.
Perhaps this is a good opportunity to provide a new Explosive Growth Tip: Always spend the $50 or so on a protective cover for your laptop. Humans work well on caffeine; motherboards don’t.
Add in some other unexpected costs due to unfriendly APIs and slower development time, and my initial estimate to launch, which was already doubled, was doubled yet again. Let the Amazing Race (Entrepreneur’s Version) begin!
Early Results
In hindsight, building the product was the easy part in both of my startup experiences. The part that is really fu*king hard comes after, which is trying to grow the product fast enough.
The vast majority of startups don’t fail because of an inability to build and launch a product; most startups fail because they can’t get enough traction before the money runs out.
The BuySellHODL Cryptocurrency App finally went live in the iOS App Store about eight weeks after I submitted it for approval (also on Android). It’s still got a long way to go before we’ll be able to predict its fate, but there are already two noteworthy results to share:
1. Massive Marketing Fail Again: I recalled a massive marketing fail from my time at SNAP, when I spent $50,000 on a Spring Break marketing campaign that went completely bust. Determined not to make that same mistake again, I balked at the initial recommendation from a firm to spend $5,000 on helping me to build a vibrant crypto community on Telegram. Instead, I negotiated a far smaller test run of just $300. I wanted to see what sort of results I might expect.
I figured that even if I only got a few users, I would at least know that I could expect an appropriately higher number of users from spending an appropriately higher dollar amount the next time. The good news is that my $300 yielded 1,000 sign-ups on Telegram. … hooray! The bad news is that those 1,000 Telegram users resulted in zero downloads for the actual app. Let’s do the quick math on that: zero times anything is still zero!
2. Explosive Growth Again! (Never mind): Within seconds of the app (finally) going live, ten users downloaded it, which made me think, “Holy crap, we did it again! This time, when Maria Bartiromo calls me looking for information about the hottest stock on NASDAQ, I’ll be better prepared. I can even talk to her directly from a beach in Thailand.”
Upon further inspection, however, I discovered that it was really only one user who created 10 fake accounts just to get 10 extra lives in our Bitcoin game, which improves your chances of winning the cash prize. D’oh! This was also a case where I learned from a previous mistake. I was only able to uncover this mirage of instant success because I had robust data from multiple sources working for me.
Standard analytics did not show the fallacy of the 10 users. Because I remembered the importance of abundant data from my time at SNAP, however, I made sure I had in-depth analytics to track. My data-centric approach paid off, because only the most granular analytics revealed the fake accounts. Maybe some aspects of a startup are a little easier the second time around …
Be sure to look for my next post, which will go into details about how I plan to grow BuySellHODL. The article will include information about some features I plan to leverage for viral marketing tactics, strategies for content marketing, ideas for a purple cow, and more. If you’re already a crypto-enthusiast, you can learn more about it in our App Launch and Cryptocurrency Predictions and Ratings Feature press releases.
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Cliff Lerner is a successful entrepreneur and Author of the Best-Seller Business Book, Explosive Growth — A Few Things I Learned Growing To 100 Million Users, which is available on Amazon. He advises fast-growing startups, is a crypto-enthusiast, and recently launched his new Cryptocurrency App, BuySellHODL (@BuySellHODLapp), whose goal is to get 100 Million Users to adopt Crypto by providing live Crypto-currency Predictions, Ratings, Bitcoin Price Predictions, and a fun Bitcoin Game to win real cash.
