Avoiding the Most Common First-Time Founder Mistakes
From FOUNDED: The No B.S. Guide for Student Entrepreneurs
The following is a chapter excerpt from my brand new book, FOUNDED: The No B.S. Guide for Student Entrepreneurs, a #1 New Release in Starting a Business now available on Amazon! I wanted to share a sample chapter to give a better idea about the quality and content of FOUNDED. I hope you’ll consider purchasing a copy!
Having worked with thousands of first-time founders, we’ve seen the same misconceptions, pitfalls, and mistakes made over and over again and have compiled the three most common pitfalls of first-time founders. You will be talking to and working with many other people, and there will always be uncertainty. But you will need to overcome these pitfalls if you want to succeed. Some of the most common mistakes include:
1. Giving up too easily
2. Building something no one wants
3. Ignoring distribution
GIVING UP TOO EASILY
At The Garage, we often see students excitedly show up with an idea they want to get to work on, only to have them give up at the first sign of trouble. It might be they want to recruit an engineer to join their team but can’t convince anyone. Or they heard from a few potential customers that they weren’t interested in what they were building. Perhaps during their Warm-Up Lap, they found another product that was somewhat similar, became discouraged, and lost their motivation. All these things will happen at some point to every single project, but that does not mean they are doomed!
To avoid giving up on your idea too easily, we encourage you to set the right expectations going in, to be adaptable in your approach, and, most importantly, to have perseverance. Before you begin a new venture, it’s important you have the right expectations about how much work it will take. For student founders, they’re often juggling classes, extracurriculars, campus jobs, and a social life. For adults, the responsibilities and commitments in their lives are often even more demanding. Realize before you embark on this journey that it won’t be easy. You’re going to run into obstacle after obstacle, and you will need to be highly adaptable in your approach to clear the hurdles and move onto the next challenge.
Spencer Levitt and Austin Pager were two friends who loved competing with each other in video games such as Call of Duty and FIFA. Along with other friends in their fraternity, they would often engage in friendly bets or challenges in these games but were frustrated that there was no way for them to keep track of their stats or scores against each other besides recording them on paper. As they talked about it more, they believed there was an opportunity to build a product that automatically tracked their scores when they played against friends and recorded lifetime statistics, so they knew who had ultimate bragging rights. After doing some light research and hearing interest from their friends, Spencer and Austin were convinced there was a huge opportunity to create a social layer on top of their favorite games. There was only one problem: Neither of them was a software engineer.
For months, the duo tried to recruit student software engineers to join their team and build their product for them. When that didn’t work, they decided to hire freelance engineers from the internet, which ended up costing a lot of time and money and did not deliver on their vision for the product. One freelancer disappeared after they had spent a month working with (and paying) him. At this point, they realized that nobody they could pay to build their product would ever care about it as much as they did.
Spencer says, “I started to think, ‘Is it really so hard to build an app that all of these freelancers around the world have some crazy knowledge that I can’t learn?’ So I decided to start at the basics. I purchased a $9.99 Udemy course on making an app that was basically 40 hours of YouTube videos. I took notes through- out the course, and when it was over, I felt like I could actually code the app myself. Ten days later, we had the first working version of Qade.”
It would have been easy for Spencer and Austin to give up after they had spent so much time and money trying to get Qade off the ground but still had nothing to show for it. Instead, they persevered and adapted, teaching themselves how to code, while demonstrating their commitment and conviction in their idea.
BUILDING SOMETHING NO ONE WANTS
We’ve already mentioned another common reason many startups fail, but it’s worth repeating: They build something that nobody wants. While this isn’t revelatory in itself, there are two fundamental reasons first-time founders make this mistake: Either they are too stubborn about their initial idea or they are too guarded about what they’re working on and fail to get feedback in the earliest stages.
Being too stubborn
Founders who believe the idea is the most valuable thing (rather than execution, AKA, thinking like a scientist) often struggle to be adaptable in their approach and pivot when all signs are say- ing that their original idea is not going to work. Typically, these hard-headed founders are so convinced that their original vision is correct that they ignore all the feedback and data that say other- wise. This failure to accept reality can cost precious time, money, and team morale.
It’s important to understand from the get-go that things aren’t going to work out exactly how you expect them to. Your initial idea is not going to be exactly the one that people want. An imperative skill for any entrepreneur is adaptability — figuring out a new angle or product or distribution channel when the current one isn’t successful. If you embrace thinking like a scientist, you shouldn’t fall victim to being too stubborn.
When Spencer and Austin finally released Qade, they ran into their next hurdle:
“The app worked. But the big problem with Qade after seven or eight iterations was that people were excited by the idea but didn’t continue to use the product over time. That is what propelled us to start asking questions like ‘What did we learn from this?’ and ‘Where do we go from here?’
“So we asked users what got them excited about it initially, why they stopped using it, and all those questions. What we ended up discovering was that they liked seeing whether their friends won or lost video games and commenting on it but didn’t care about bet- ting, which was a major component of the original app. We took that discovery and made a new app called Buffd while still running Qade. Buffd was built in a week, and we quickly got 100 people on the app who liked the product and continued to use it.”
Instead of doubling down on Qade or spending more time and money trying to get users onto the app, Spencer and Austin realized their initial idea might not be as compelling as they thought it was. By talking to their users and asking them questions, they avoided building something no one wanted and were able to build a product that people actually did want.
Being too guarded about your idea
Another reason founders end up building something that nobody wants is they fail to gather input and feedback from potential customers from the earliest stages, often out of a fear of embarrassment or negative feedback. These founders will spend months building their product in private, afraid to show or tell anyone what they’re working on until it is “perfect.” When they finally launch or release their product, they’re shocked to find that the people they thought would want it actually aren’t interested. For many, this is a heart- breaking letdown, and they may decide to shutter the project.
To avoid this mistake, we recommend talking to people in your targeted customer segment from the very beginning to hear directly from them what they are interested in. Share each new iteration and version of your product with anyone who will take a look. Ask for honest feedback, what’s missing, and what they do or do not like, just like Spencer and Austin did with Qade. While you shouldn’t put too much weight on any individual opinion, talking to a lot of people you consider potential customers should give you directional input on what to build.
In addition to making sure you’re building something people want, there’s another reason you shouldn’t be shy or guarded about your project. For your startup to be successful, you’re going to need a lot of help from a lot of people. You’re going to need to build a talented team, you’re going to need customer input and feedback, you’re going to need relationships with suppliers or buyers or partners, and you may end up needing investors to grow your company.
Your chances of finding the best people to help you along your journey are much, much higher if you tell anyone and everyone what you’re building, and what you need help with. Tell your friends, family, and classmates. Post about it on your social media channels. Start a blog! The more people who know what you’re building and what you need help with, the better your odds of get- ting the best help from the best people.
One of the things you’ll discover with this strategy is how serendipitous being an entrepreneur can be! Your friend from middle school that you haven’t spoken to in years may see your tweet about hiring a designer and connect you to a very talented designer they know. A stranger on the internet may read your blog post and reach out to discuss investing in your company. Or maybe your mom’s boss has been looking for the software you’re building and comes on board as a beta customer. All of these things are only possible if you tell people what you’re building. But if you don’t tell anyone, no one can help you. So, don’t be shy!
One of the most overlooked components of a new product or service by first-time founders is distribution, or your go-to-market plan. In other words, how do you get your product in front of your potential customers? “If you build it, they will come” is simply not true when it comes to new products or services. It’s not uncommon for first-time founders to spend months building out a website and launching it only to realize there’s no reason anyone would know about it or be able to find it. It happens with physical products, software, service companies, nonprofits, and every other type of creation. It can be incredibly discouraging to put all the time and effort into creating something only to have no one show up once you launch it.
At the earliest stages, it’s important to find ways to get your product in front of potential customers organically (without paying for ads), even if it costs a lot of time or effort on your part. Not only can advertising be expensive, but if users don’t already love your product, it can be a complete waste of money if the users you pay for stop using or buying your product. You should begin exploring how to do this even before your product is ready by thinking about two questions: (1) Who are my target customers/users, and (2) where do they spend their time? This could be physical places (e.g., college campuses) or virtual places (i.e., where they spend their time online).
Finding a unique distribution plan will be critical to your success. Facebook’s initial distribution strategy through college campuses was novel at the time. Since then, it’s been replicated many times, including by Bumble, which launched through college fraternities and sororities. RXBAR found an enthusiastic early adopter audience through CrossFit gyms.
Like these successful companies, you’ll want to dedicate time to brainstorming which channels and communities would be the best fit for your product. Be creative and look in niche communities that are the right fit for your audience or emerging platforms that are yet to be discovered by the mainstream. Consider working with social media influencers or even micro influencers on newer social media platforms or long-tail content creators experimenting with new forms of content.
At The Garage, many of our student teams find their first customers in online communities organized around interests relevant to their product. This could be a subreddit, Facebook group, or even the Nextdoor app to find local users. Others post flyers around campus or at local shops, speak in front of relevant student organizations, or recruit their friends on other college campuses to be ambassadors for the product on their campuses.
When Spencer and Austin first built Qade, their first users were their friends and other fraternity members on campus. But the duo was committed to finding as many users as possible without paying for them, so they kept at it.
“We literally went through every single phone number in our contacts and texted them on the off chance they played games or knew someone who played video games. It was definitely awkward reaching out to some people you haven’t spoken to since middle school, but we definitely got a lot of users doing that.”
When they pivoted to Buffd, Spencer and Austin thought more intentionally about who their ideal users were, and where they spent their time.
“For Buffd, we’re building a product that people who spend a lot of time gaming would like. Who are those people? Easy, Twitch streamers. How do we get in touch with Twitch streamers? Let’s just go on their streams and talk to them. We would go on Twitch, sort streams by popularity from low to high. We’d go into the streams with zero viewers, and the streamers would get really excited when someone comes to talk to them. So we’d chat with them for a few minutes, comment on their game play, and then say, ‘I’m working on this project I think you might enjoy, would you mind checking it out?’ Usually they would end up downloading it and then inviting their friends on as well. And that’s how our community started being built.”
We’ll discuss distribution in more detail later in the book, but an important point highlighted by Spencer and Austin is that to get their first customers, they engaged in activities that don’t scale. Buff’d probably won’t get 1,000,000 customers from the two founders texting their contacts and individually talking to Twitch streamers with no viewers, but it did succeed in getting their first 1,000 users, and all it cost them was time and creativity.
You’ll also want to experiment with other alternative tactics. Uber’s growth was augmented by its referral program, for example. Gmail and Slack utilized exclusive invite-only scarcity models. Other ideas include competitions, posting in forums, or piggyback- ing off an existing community. For example, Dropbox created a viral video full of memes for the Digg community, and Airbnb sent targeted emails to people posting short-term rentals on Craigslist.
Even before your product is ready, it’s important to design, test, and build a strategic go-to-market plan that gets your product in front of customers at scale. Create a plan that utilizes several strategies, including niche communities, partnerships, sales, media exposure, content, referral programs, advertising, or some other distribution channel. Finding the right distribution channels will require a lot of trial and error. Use your thinking like a scientist mindset to find the right channels for your business. It will be crucial to your eventual success!
- Don’t give up too easily! Have perseverance and adapt
- Make sure you’re building something people want
- Don’t be shy! Tell everyone what you’re working on
- Be considerate and intentional about how you’ll get in front of customers
The is a chapter excerpt from my brand new book, FOUNDED: The No B.S. Guide for Student Entrepreneurs, a #1 New Release in Starting a Business now available on Amazon! I wanted to share a sample chapter to give a better idea about the quality and content of FOUNDED. I hope you‘ll consider purchasing a copy!