5 lessons learned after
3 years with a Startup
Welcome to the fail academy
W e are living in a great time.
The advent of the Internet, with its promise of being all connected humans and objects, offers opportunities that seem endless for anyone who wants to embark on the creation of a company. Larry Page, Mark Zuckerberg, Elon Musk, so many names that make the most courageous dream, and thousands every day wake up in the morning saying, “Ok, let’s do this.”
This is the same thing I told myself one beautiful morning in 2010, when my partner and I decided to put together our professional social network project, Digikaa. The goal was simple: to create a sort of vertical LinkedIn, which would host all web experts. A platform that had different purposes: to allow quality networking and offer recruitment solutions with HR. After 3 years of life, the adventure is drawing to an end, shedding some light on various mistakes in the project.
Welcome to the “Fail Academy.”
1 / Integrate technical expertise
from the beginning
By definition, the web is based on code.
Without code, and even with the best ideas in the world, you won’t be able to do much. Almost all digital successes were driven by developers: Facebook, Google, YouTube… Even Apple, often depicted as the success of the designer Steve Jobs, could not exist without the technological genius of Steve Wozniak.
When we started Digikaa, we made the decision to work with an external development studio, which offered a proprietary framework, with features that were ideal for our project. It appeared to be an attractive solution to minimize costs at the beginning of the project but quickly proved to be a bad idea for two reasons:
- Each modification cost money, and the little that we could earn with the project was swallowed up whenever we wanted to improve the product. Each development required a long negotiation where we had to find a happy medium between the number of features and the associated budget, which became quite a burden over the months.
- With this system, it’s impossible to go through with a pivot, which is the basis of any startup project: the winning idea rarely happens on the first day, and it’s necessary to be able to develop the product quickly at the lowest cost to adapt to the development of the business model.
“ With an external development studio, […] it’s impossible to go through
with a pivot, which is the basis of any startup project. ”
Within the business incubator where we were, it was possible to follow the development of different startups like 1001menus: there clearly was a before and after the arrival of the company’s CTO.
In conclusion if I had to rebuild a digital startup today, I would integrate a CTO from the beginning (which is clearly one of the most difficult jobs to fill today ☺).
2/ Focus on the minimum viable service
The race for a good idea is not an easy thing: we have to know how to make concessions on its starting instinct and to trust data and user feedback. And above all, we must focus on the minimum viable service, which will be able to meet a real user need and therefore generate revenue throughout the development of the project, in order to move through the different stages that will lead to the Big Idea.
The visual below perfectly illustrates the problem of minimum viable service to me:
In my opinion, this was one of the pitfalls of the Digikaa project: we had a very long term vision of the final product (a specialized social network), which could not be viable until everyone on the market was present on it: an attainable goal after many months and years, the period during which it was very difficult to convince our potential customers. There should have been a focus on essential services, perfecting them to attract the maximum number of profiles, and then perhaps implementing the social network. A site like Remixjobs for example (A french authenticjobs), could move towards a more social shift today, now that it has a reputation, a business model, and most importantly, user accounts.
Another point concerning the minimum viable service, we had the unfortunate tendency to spread ourselves to a large number of different actions, which required lots of energy, and often money. So we created Digikaaperos, a monthly meeting of digital professionals, convinced that this would unite the community better on the network later. We also organized many activities for all members so that they would feel a sense of belonging to a vibrant, dynamic group. But, once again, all of these actions were futile, as long as the minimum viable service and the revenue generator weren’t implemented.
“ We had the unfortunate tendency to spread ourselves to a large number of different actions, which required lots of energy, and often money. ”
Finally, when we considered Digikaa, we considered the user. It was also our obsession. But the mistake was not thinking about the customer. We did everything so that the web professional could register easily, navigate, and enter data to enhance his or her profile, but too often we put the customer and his experience aside, thinking that this would come in no time at all, when the network would be expanded. Unfortunately, we did not have this minimum viable service for users, and as seen in 1 /, we didn’t have the technical structure to allow us to pivot or modify the service to better meet the customers’ needs.
3/ Don’t be out of touch with potential customers
Our potential target was HR and other firms specializing in recruitment. However, this target was not yet solid because of new uses of digital, and it was just discovering LinkedIn, where it could find all the market’s profiles. Therefore, we had too much anticipated a use with a target that wasn’t responsive, which caused us to have a lot of trouble convincing our potential customers.
“ Many people had largely advised us against launching in this sector,
[but] we remained deaf to all this advice. ”
Many people, including Richard Menneveux of FrenchWeb, whom we met with for a long time at the very beginning of the project, had largely advised us against launching in this sector. We remained deaf to all this advice, and finally, all those warnings proved to be true. Which goes to show that even though it may be important to believe in an idea, it’s also important to remain flexible and open to the remarks of industry professionals.
4/ Hire based on revenues
Another important point is to not succumb to delusions of grandeur. We had quickly grown, up to 7 people, to cover the various activities that we had implemented. Internships and contracts, as well as many significant fixed costs that needed to be paid put so much financial pressure on us that we needed to return to the company’s coffers every month.
To do this, in addition to borrowing, we had a side project at the Digikaa network: Pomkaa, the parent company, offered user experience design services. It was a profitable, but very time consuming activity that didn’t allow us to fully concentrate on the real business project. The topic of side jobs was often at the center of discussions with my partner, and was part of the reason for the lack of involvement and motivation throughout the life of the company.
“ The basis of any success:
tenacity, humility, pragmatism, and frugality. ”
Michel de Guilhermier, one of our mentors when we went through l’Accélérateur, kept repeating the key words that seemed to be the basis of any success: tenacity, humility, pragmatism, and frugality. Maybe we weren’t very frugal, at a stage in the project which required us to be.
5/ Really understand your motivation
An essential element that allows you to stay motivated in the project’s first months is what I call faith. Faith in your idea, faith in your associate(s), faith in your role as an entrepreneur. As soon as faith starts to dwindle, the energy to get up the morning decreases, and it quickly becomes very tiring to always struggle to explain your project for the umpteenth time.
Some people want to be an entrepreneur to change the world, others simply do it so they won’t have a boss above them. For me, I think i was being super excited at the idea of creating something, a project or a website. But in the end, the creation is only a very small piece of the adventure. Once this step is complete, another whole story begins: the marketing, the management, the accounting, etc. All the matters that play an important role in the smooth running of the life of a young company, but that aren’t necessarily very exciting every day.
“ The creation is only a very small piece of the adventure.
Once this step is complete, another whole story begins. ”
Ali Mese, a young entrepreneur, wrote an article that also details the social consequences he noticed at the beginning of his project, which can play an important role in an entrepreneur’s morale. He asks various questions that I’ll let you discover on your own, and the last is interesting: “How do you define success?” … Everyone has different motivations, but it is interesting to know what they are before launching.
Conclusion
The Digikaa project is currently coming to an end.
It was a three year adventure, where I went through all the phases between excitement and depression. It’s a professional and personal learning experience where we explore our limits, learn more about ourselves, and above all, learn from our mistakes. If I were to start a company again today, I would be better off from all these bad decisions, and I would avoid making them again. With that said, creating a business is far from being an exact science, and there are so many parameters to handle that a single experience doesn’t make you immune from another failure.
“ Don’t hesitate to ask former first-time entrepreneurs
about their experience to avoid making bad decisions. ”
It’s necessary to create new businesses because it’s important to explore a new way of doing things. Today, I gladly help friends who want to launch something, by sharing part of my little experience with them. The era we live in is extraordinary for anyone who wants to change the world, so go for it! But before doing it, don’t hesitate to ask former first-time entrepreneurs about their experience to avoid making bad decisions right from the start.
