Unforced Startup Errors
Lessons I’ve learned from jumping full-time into the deep end of starting a company.
About a year and a half ago, I left my job leading the platform engineering team at CrunchBase to bootstrapping my own venture, ekCoffee (one cup of coffee), a community and network of single people.
We set out to build a different kind of an online dating experience, and over time have evolved to become a “single’s space” that’s more social online and in life, compared to the dating apps that are out there today.
We had also started to get a real sense that we might be able to charge for it and start making some money (gulp).
That said, my Co-founder Anushri Thanedar and I have decided to shut it down, primarily due to: 1. The realization that to sustain the kind of growth we desire from where we are now is going to require the marketing $s we don’t have. 2. The funding landscape for apps in this domain is not particularly kind.
The ironic part is I’ve never felt more confident about our product now (after numerous experiments) than compared to a year ago.
It’s odd how the actual decision to wind it down was not as difficult as we would have expected it to be — but the one thing that I do feel bad about is seeing a good product go to waste due to lack of funds.
We’re going to try and look for a potential buyer for the assets and the small but niche brand we’ve built. Hopefully someone with deeper pockets that has interest in this space may find our learnings and what we’ve built valuable. We’ll see how the search for someone like that goes.
This post is part post-mortem, part analysis, and part capturing some of the lessons I learned in the process.
We made some tactical and execution errors that contributed to the outcome. But I’m more interested in what I call “unforced errors” that are avoidable and as a founder, you rarely consider.
In hindsight, some of these lessons and/or mistakes may have been fairly obvious to the casual observer or the seasoned entrepreneur. But when you’re in the middle of it, they’re not readily visible.
It takes a great deal of detachment from your ideal outcome to have an unbiased perspective on your actions in real-time.
Another thing: I’m going to consciously refrain from calling what I was doing a “startup.” I’ve come to believe over time that it’s too easy to hide behind the label of starting or running a “startup” than being focused on building a real business.
Granted it’s a semantic thing but it does have the potential to cloud your perspective. I now prefer to call things I’m working on projects, ventures, or experiments until they start looking like a real “business” (one that makes money). At that point it doesn’t matter what I call it! YMMV.
After I quit my job, I immediately went about forming the company and hired freelancers to build the app. We launched our app about 5 months later. And there came my first lesson.
If you haven’t raised capital, every week you spend not being in front of your end user/customer is akin to a month.
(You can sort-of afford it when it’s someone else’s money.)
While our launch did in fact go well, we had made the classic mistake of over-productizing our app by about 30%. That may not seem like a lot, but it’s a costly mistake to make when you’re self-funding something.
Eventually you have to fix or roll back some of the core assumptions you made.
You may have known all about iterative product development but it’s a very easy trap to fall into, this one. Especially when you’re building a consumer social app — you can rarely do “user development” in consumer apps.
Yes you can do customer development when building an app targeted towards, say businesses.
The self-inflicted narrative here that I succumbed to, despite knowing better, was that only a “complete” product will do, and anything short of it was not enough to withstand competition.
Think a 100 times before building anything consumer/social. Better yet, just don’t do it if it’s your first rodeo.
The exception to this is if you’re young and don’t know what you don’t know (you won’t realize this either, which is good).
Mass consumer apps are notoriously hard to have a predictable path to product/market fit, and harder yet to build a real business around. You’ve shot yourself in the foot even before you get started.
I thought I was a betting man, much to my chagrin, I was to learn.
It took me a while to really grok this, from deep within. Consumer apps are sexy, they are fun to conceive and build, and with the right timing, see the kind of scale that is like a potent drug.
They can also feel like low-hanging fruit. But the exact formula for product/market fit is a total mystery. I’d wager that none of the founding teams of hugely successful consumer apps knew that the random dart they flung at the dartboard would hit bulls eye.
In spite of their insanely great execution (or aim). It either works or it doesn’t.
Fortunately in 2017, it appears that fewer of you are running towards mobile/social/consumer. It’s a good thing.
If you’re figuring it out still, it’s a-ok to not put all your eggs in one basket.
This is probably the one thing that was counter-intuitive to me. Anyone who’s made it in startup circles will tell you that you have to be maniacally focused on ONE thing. The narrative goes that if you’re working on more than one thing, you’re doing it wrong (and you have no hope).
I’m going to call bs on that. Even seasoned entrepreneurs get it wrong all the time. Just look around and take stock of how many first-time successful founders have been able to repeat their successes.
That should tell you how difficult it actually is to build a real, profitable company — none of it matters if your timing is wrong, for instance.
When you’re starting out, I have actually come to believe that you should experiment with a few ideas. Test the waters in more areas.
The danger of being blindly focused on one idea is that you get too attached to it. Sometimes that’s a good, and necessary thing. But often it’s not. You might end up wasting valuable time ignoring other opportunities.
This does not mean that you take a scatterbrained approach to pursuing ideas and seeing whatever sticks. But it’s more of a mental exercise.
It’s the discipline to not get too emotionally invested in one thing early on, to pursue a singular path only once it starts to show true promise, through early experiments.
There are caveats to this. It’s probably better to pursue just one idea when you’re starting out if you have deep expertise in something. It you are 2000% confident that paying customer(s) for your yet-to-be-developed product exist (i.e., you’ve spoken to them before you built your product). And finally, you have the firepower (time, money, resources) to sustain getting to scale.
Another thing — you may be deeply passionate about an idea or product that you envision, but often you’ll find that you will have to take detours, temporary breaks, and may be do something else for a while before you realize the dream you started out with.
It took Quentin Tarantino nearly a decade to write the script for Inglourious Basterds. Think about that. In the meantime he didn’t stop making movies and directed one of his greatest works, Kill Bill.
There are things I’m passionate about and eventual dreams I have, but in the immediate, I’m now interested in staying in the game more; and that requires not being short-sighted and missing the forest for the trees.
Even Elon Musk has to pay the bills by launching satellites for paying clients before he gets to send people to Mars. And I consider myself more mortal than him.
Think business, not startup.
Very few will tell you this in a place like the valley. You’ll see it done around you differently. And it’ll grow on you. You’ll think that’s the way of the warrior. But it’s the way of only a few. And they really are few and far between.
Can we think about what we can do that will last the next 20 years? About how it can even outlast us perhaps.
This is not easy. But do you know the businesses that last the longest, and are often the largest? The ones that grew over time, adapting, tweaking, and scaling. They’re the ones that are anti-fragile. They responded to a demand and grew to meet it. They weren’t trying to shoehorn a poor business onto a big market.
I understand the narrative about startups being about growth, the network effects of technology, the need to capture market share fast but how far and long a business can thrive is an entirely different thing.
Most startups are not going to become the next Google or Facebook, no matter your burning desire to make it so. Flaming out early is certainly not going to get us there.
Getting to escape velocity in 2 years is not the finish line. Nor is an exit.
A few months ago, I met someone who worked at one of those very well-known laundry startups. They’d raised over $15M, to wash and deliver clothes efficiently. I asked this person why they failed.
He only had one thing to say…“we spent too much trying to grow in multiple markets before we got the basics of the business right”. $15M gone. Poof. Vanished into thin air.
These were smart people. They’d have had a solid business today, if they’d figured out how to be profitable and successful in one market, before going into another. There is an endless list of these stories and examples in startup world.
You don’t become a $B business by wanting or desiring to become one. Because there is rarely a line of sight to it.
I postulate that it happens to you, than you happening upon it. It’ll hit you on the head — when you’ve hit upon something magical.
I was under the influence of this sort of thinking too. For a long time. That I’m no good if I can’t or don’t build the next big thing by raising a ton of money, scaling fast, and striking it big, all within a span of 5-7 years.
But this thinking is toxic. It will only handicap you.
This doesn’t mean you don’t aim high. It doesn’t mean you can’t dream big. It means you have to keep your feet on the ground while you do it.
Don’t get caught up in any prevailing narrative of what a startup (yours) is supposed to be.
Focus at all times on building an actual business. It is easy to be influenced by the chatter around you, especially if you live in a hotbed of activity like Silicon Valley/SF.
For a long time, I was influenced by motivations that did not necessarily align with my own. And it’s taken a good deal of mental undo to recognize and get rid of them.
As with all learnings, these are personal to me and may not resonate with your experiences. I’m onto new projects now, more aware and better equipped.
Above all though, I’ve learned that you have to be honest about who you are, and your unique strengths and ambitions. I’m no longer interested in following a narrative that’s not my own.
We increase our odds of success when we find our own way, and question every assumption and notion along the way.