I’ve never sat down to list all of my startups, let alone what if anything I learned from them. But Vikram Joshi, co-founder and CTO at Pulsd did in his Forbes article Five Things I Learned From My Failed Startups. Per usual I will list each of what he calls “learnings” – which isn’t a word where I come from – and annotate them with my comments.
1. Do Not Go Solo
It was obvious my original idea for the Mainspring business was a failure – trying to create Microsoft Developers Network for developers of web sites and web applications was a non-starter as the web was soon flooded with this kind of information for free. We had even considered giving the many millions still left in our bank account back to the investors. I decided to leave to start a new company, Throughline. I made the mistake of basically going solo. Now I always recommend against it. Startups are hard enough for two or three co-founders, let alone one founder. Co-founders bring not only experience and expertise you may not have, but also perspective and their own personal networks. Don’t go solo! And if you can’t attract a co-founder there is probably a flaw in your business concept.
2. Do Something That You Are Really Passionate About
Again I agree totally with Mr. Joshi. One of my many startup ideas that was way too early was remote monitoring of diabetes patients. Not only was the technology not there, but I wasn’t passionate about helping diabetics. When I found that doctors really didn’t like diabetics – they tend to be very overweight, don’t follow their prescribed diets, don’t take their meds, etc. – I very quickly folded my tent as I thought my tech idea was cool, but I had no affinity for diabetics. Startups are a marathon, not a sprint, so if you are not totally passionate about helping your customers don’t even start.
3. Launch Beta Sooner Than You Think You Should
I learned this lesson the hard way with PopSleuth and Endorfyn. We spent way too much time and money before we launched Endorfyn – a mobile app to help fans find the latest works from their favorite artists. If we had launched a lot earlier – and frankly focused on customer development not product development – we would have found that the audience for this app was very small and that it would take gobs of money to find them and get them on the app. You have to get engaged with the market even before you start coding – create some mockups and get them in front of your target audience.
4. Have A Balance When It Comes To Market Research
You may want to read my blog post Market research – what is it and why you need it. What you need to focus on is primary market research: get out of the office and talk with target customers, don’t sit at your desk using Google! But don’t neglect using Google to find your competitors, that’s where it’s really helpful. It surprises me how many founders neglect this step. In mentor meetings there’s often a mentor searching Google for competitors!
5. Do Not Ask For Funding Too Soon
With Mainspring we not only asked for funding too soon we got it! Eight million dollars for a business plan! It was far more money than we needed and way too soon – we hadn’t talked to a single prospective customer. Talking with friends and family about your startup idea is no substitute for talking with total strangers who won’t be biased in your favor. As the saying goes, first you have to nail it, then you can scale it. Investment capital is rocket fuel – it should be used to help you achieve escape velocity. Sweat equity and perhaps money from friends and family gets you onto the launch pad and ready to raise institutional capital. Recommended reading: Nail It then Scale It: The Entrepreneur’s Guide to Creating and Managing Breakthrough Innovation by Nathan R.Furr and Paul Ahlstrom.
The great thing is that it’s never been easier to start a company with hosting from AWS and distribution through the App Store and Google Play and billions of venture capital looking for the next great thing. But the bad news is too many would-be founders jump in with booth feet. Look before you leap! If I learned anything from my many failed startups it’s focus on customer discovery and development, not product development, not business development. You will still make mistakes but you won’t commit the cardinal sin of not knowing who your customer really is.