TL:DR: Wake up with a startup idea, Imagine yourself to be Steve Jobs, Talk to people who appreciate your idea, Kill yourself building a product without a validation plan, learn nothing & perish.
In advance to all of who think I am a demotivating pr*ck, I am not. I don’t sit in an ivory tower and dole out advice. I have made & averted many of these mistakes over the years. The ones where I didn’t avert have always proven to be expensive.
Today, if I threw a stone across the street, it would hit somebody working in a start-up. I would imagine that the ecosystem is mature. Truth is, people are none the wiser despite Eric Ries and Steve Blank screaming and writing posts for years. People still fantasize in bars, wake up quit jobs and destroy their lives over ideas that should have never made it past the hangover the next morning. I marvel at the number of people who think building a business is about building an app. Building the app is the last problem. Some how people are disappointed when I say this. They want an expensive lesson that involves engineering cost — without validating the business model.
This post is structured to identify problems based on signs. I would encourage every one of you to think hard and not tell yourself stories about why you don’t fall into one of these. If you read any sign and feel even a vague doubt, you probably fall into the category.
Sign 1: I have a startup idea, I need to build an app/site/product to launch
This mostly comes from non-tech founders. They are lucky because they don’t have the technical expertise to dive right in. I say luckily because startups are not about building apps or products in the beginning. They are about discovering a sustainable business model. This is the hardest part and because of that, we do what is easier — build the product instead. It’s comforting because technical problems can be solved. Business problems are a beast of another nature. They depend on behaviour, market dynamics, understanding willingness to pay, etc. These are all hard to measure when you are sitting in your chair. They are also hard because every entrepreneur thinks his/her target customer behaves exactly like them. The way to shatter all these illusions is to get your product in the hands of a customer.
Sign 2: I don’t have a customer using my product yet but if I build more features…..
Most startups suffer from this disease. We spend days, months & even years building features without meeting a single customer. Your product will never be fully done, take it to the market and see what happens. In the early days, you are better off working with customers & letting them be your lighthouse.
Yes, I know it is not easy to find your early customers. If you can’t find someone to work with your product how will you sell it?
Not every prospect will be ready to work with your product, not every customer is an early adopter. If your product solves a problem that is worthy of building a business around, you will find that customer. After making your product fit their needs, your next problem becomes replicating the success and finding others.
Sign 3: But I need to build features in my product so that it scales
Bullshit. If you don’t have multiple customers on your product, don’t even bother building for scale. You can boil the ocean use the best platforms, go serverless and the list goes on. If you are busy going serverless when you are customer-less, you are doomed. I read somewhere that at Y-combinator they insist on spending time building things that don’t scale in the early days. The wisdom in this is so profound. Scale never comes without engineering cost. Throwing that away hurts. Scale is not a day 1 or day 100 issue for most startups. You should not lead yourself to believe that you will reach scale overnight unless your business shows you otherwise.
Thinking about scale, in the beginning, is like worrying about which stadium to book for your concert on your first day at music class.
Sign 4: I spoke to 4 people and they told me my product is great
Another disease. If none of those 4 people are target customers or worse — they are target customers but won’t adopt your product, ignore this feedback. If your customer says your product is great, that is a good sign. If they say it’s great and use it regularly, that’s a very good sign. If they pay for it, amazing. If they keep renewing, you have won. Don’t listen to the 4 people who tell you your product is great but say nothing else. It’s smoke up your a**.
I am not saying ignore feedback, make a note of everything. If you see a pattern take notice as well. A lot of us get caught up in trying to hear what we believe. An echo-chamber where everybody is offering up optimism is dangerous not just useless.
I am writing an entire piece about how it is valuable to say no to an entrepreneur. More about that later.
Sign 5: I can’t do sales, I need to hire a sales guy and everything will be alright
Yes, not all of us are not the best salespeople. In the early days, you should do the sales so that you are talking to the customer. There is no conflict of interest and the right feedback goes back to your product. If you employ a salesperson whose sole interest is to hit targets, you will find him/her giving you excuses on why they didn’t meet the targets. I have said this before, Salespeople are trained to find fits, not gaps. They will miss the critical data points you need for your product. Of course, when you have validated that there exists a market, it would be foolish to continue owning this stream. That is a good time to delegate it to real salespeople. The key is to transition the responsibilities out when you have things figured out.
A good salesperson at the right time will shoot your company into the orbit. At the wrong time, you will be shooting yourself in the foot.
Sign 6: I have met 3 potential customers & I need to pivot to get things right
The most critical thing that we need to understand is, what is a pivot and when to make it. That starts with understanding what metrics we want to measure to see if our product is succeeding.
I want to share this tweet at this point:
The number of people who abuse the term MVP, I am tempted to start a #meMVPtoo movement.
Most of us work with feelings, perceptions & interpretations. All 3 of them are misleading. It can be a hard task to understand why somebody didn’t buy your product. In India, we are non-confrontational so nobody says No, the customer will always say he/she will get back to you. That could mean they will do something or they are not interested. This makes it very hard to get the right feedback. Sometimes your product’s buyer persona is such that decision making is fraught with delays. In such cases, making an intelligent guess on why your product is failing to sell becomes hard. This makes it all the more dangerous to pivot.
In the absence of measurable metrics, most of us tend to make a dizzying set of useless pivots. When it’s all over, you won’t even know why you failed.
Sign 7: My competition has been around for 10 years, I will wipe them out because my product is awesome
Bullshit. If your competitor has been around for 10 years, they have built invaluable market experience and resilience. You have jack shit. Your product needs to find users who aren’t already using another product. Else you need to convince prospects to switch vendors. Resistance to such change will always be high. You need to work doubly hard, your product won’t sell itself or market itself. Features will start making a difference only when customers start using them. Till then your competition is somebody and you are a nobody.
Sign 8: I succeeded in company X with 15,000 people, I can do this
Running a startup is not like running a large team at a large organization. The leadership skills required are completely different. The vast majority of startups that fail with a veteran from a large company is because of this. Startups can’t be run like mini-versions of large companies. The focus has to be about taking products to the market & validating the business model. People from large companies seem to lack this skill completely. When you move from a large company to a startup you quickly realise how much of stuff was sorted out before it landed on your lap. Sadly, some people never learn. With higher experience, people tend to become opinionated and less malleable. Their worldview gets fixed. When they land up in a startup, they keep trying to replicate their success using large company techniques and the result is always a catastrophe.
Sign 9: It is not me, its the
The assessment of the market, the approach, the pivots — everything is simply a function of the team and the board.
Startups supposedly fail due to the following reasons:
Lack of Product-market fitTough market situationsBad chemistry in the team
All of the above is simply a function of the people’s inability to understand and adapt to the above. These are the expected challenges. Doing the wrong thing when we encounter them is a sign that we have consistently failed to lead or interpret the signs.
Sign 10: I will build everything my customer asks for
This is the last one because you have solved the biggest challenge of getting your first customer. Now you have a new problem, you are saying yes to everything your customer is asking for. This means you don’t have a roadmap — your customer is simply asking for stuff because they feel entitled to it. It’s dangerous because customers don’t always know how to ask for stuff, they come with solution requests, not problems. That’s a red flag.
Don’t convince yourself that it is a strategic move and that you can course-correct later. Saying yes without reason is a habit you will never be able to break out of.
Soon you will find yourself doing the same thing for every customer and then you no longer have a product. It is important to please & retain your customers. However, you should be driving the roadmap else you risk making a mess of your product.
I want to wrap up by saying, not all problems present themselves with a sign-board. Sometimes they manifest themselves as organisations where it is impossible to move fast and adapt to changes.