Learning from Failure
7 lessons I learned as an Ed tech Startup CEO
Whenever people ask me about my experience founding and shutting down an ed tech company, they want to know what wisdom I have to share. What follows is my attempt to distill three years of trial and error as the CEO of a failed startup. My hope is that these headlines will help other entrepreneurs who are just beginning their own journeys.
1. Don’t shortchange your market research.
Before founding my company, I was an elementary school teacher. While I expected a steep learning curve when it came to building a technology company, I thought I had a keen understanding of the user, the problem, and the U.S. education system. However, this was a naïve assumption. In reality, I understood my own experience as a teacher, but I knew very little about the business of education. To successfully build a product that educators would want and that administrators would buy, I needed a deep understanding of the way money flows through the system and the motivations of both the purchasers and the users.
2. Prove your value before approaching investors.
We hear the story of a founder pitching her idea on a napkin, and suddenly she’s raised her entire seed round. This is an extremely rare exception rather than the rule. Yet, I hear founders tell me all the time that they are going to raise a seed round because others have successfully fundraised on “much less” than what they’ve accomplished. In my experience, it’s a waste of time to fundraise unless you have a significant story to tell around traction. Investors are looking for potential based on what you’ve already learned, so make sure you have some revenue, users, and/or usage to show before attempting to fundraise.
3. Don’t hire your first salesperson until you’ve identified a repeatable sales process.
I learned this the hard way. It’s so tempting: you need to grow your company, which means making more sales; the logical decision is to hire another person to double your effort. However, until you know what your sales process looks like — who holds the purse strings, how long it takes, how much schools will pay, etc. — it can be a waste of money and time to bring on a salesperson. At the beginning, you don’t really know who your customer is and what value you’re providing. Until you figure that out, the CEO needs to continue selling and learning.
4. Early on, be intentional about your company culture.
Your company is the people on your team, and they need to feel motivated and comfortable in order to be productive and enjoy their work. At first, being intentional about culture was a difficult concept for me, because in our first year, our company consisted of just my co-founder and me. It seemed like a waste to spend time thinking about culture over sales or product. However, it turns out that it’s increasingly difficult to define or redefine your culture as you hire more people. Figure out what matters to you and what kind of company you want to build, and then work each day to live out those values.
5. Practice open communication with your team.
Mastering honest, direct, and compassionate communication may be the key to succeeding at all relationships, and it’s no different in building your startup. Giving and receiving feedback are difficult to do well, but they are necessary in fostering healthy relationships with your fellow teammates. Too often, I would let resentment or disappointment build without addressing it, which is a recipe for passive aggressive disaster. My cofounder and I began having a one-on-one breakfast once a week, intentionally holding the space to provide one another feedback and address concerns. We found that keeping this time sacred meant that nothing went unsaid. If you’re in the Bay Area, I’d also recommend InnerSpace as a great organization to learn about founder communication.
6. Your time is valuable. Outsource what you can.
As a startup CEO, I found that my time was constantly pulled between strategy and the execution of more rote tasks like managing Quickbooks, purchasing worker’s compensation insurance, paying taxes, and finding contact information of prospective sales targets. Being tight on cash, my impulse was to take care of these tasks on my own, but the better choice was to outsource as much as possible, so that I could focus my finite time on the things only a CEO can do, like fundraising and sales strategy.
7. Building and fostering relationships is key.
When starting a company, excelling at relationship management can make or break closing a deal, recruiting a new team member, or attracting investment. One of our customers told me that they chose our product over a competitor’s simply because they liked me as a person. At the end of the day, we’re humans, and relationships run the world. I’ve been able to build strong relationships by being a good listener, meeting people where they are, and offering to help them fill their needs. Staying in touch with a large network can be tedious, but keeping relationships fresh mean that you and your company stay top of mind for people when they’re making decisions about products to use or recommend.
Tess Brustein is an Entrepreneurial Engineer for Camelback Ventures and the Director of Design for Braven. She was the former Co-Founder & CEO of the edtech startup, SmarterCookie.
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