3 Lessons Learned From My Startup Failure
(This blog post was written prior to Covid-19 and social distancing mandate. Make sure to follow lessons #1 from the safety of your home.)
One day I got home from work and said to my husband, in an exasperated voice, “I’m going to create a product to solve the parent-school communication problem we have seen in the preschools and schools our kids have been to.” It was 2016, I had 15+ years of UX design and I was tired of working on other people’s ideas, serving missions I didn’t believe in, and following nonsense orders. To be honest, I was angry; I wanted to work on my own ideas.
Within a year, I pivoted my idea to another industry and acquired my first customer. But I was so overwhelmed learning about C-Corps, tech stacks, and financial projections, that I overlooked some basic principles of startups.
This post is for visionaries, entrepreneurs, product managers or any one with the dream to one day start working on your own ideas. The time is actually NOW! I’ll share the three most valuable lessons I learned while building my startup and explain why they are so important.
Why You Should Learn From My Failure
We have all failed or will fail at one point or another in life. The lessons that I learned with my failure, I learned by myself. These experiences are always personal, and different for each hopeful entrepreneur. What I’m sharing here is personal to me and my experience. How I see it now is that I have two options: I can either keep what I learned to myself and apply it to my next venture, or I can share it with you. I like to think that the world would be a much better place if we all share more, give more, and connect more.
I hope the lessons listed here will have a positive impact on your startup, project, or business. I believe they have the potential to help you save money and time with MVP iterations, and consequently, achieve product-market fit faster.
Validate Your Hypothesis
There are many different ways to validate your hypothesis — surveys, pre-launch site, smoke tests, ads, prototypes. I will focus on Customer Development, as it could be the one with the biggest impact, and it was also one of my biggest mistakes…
My startup was a B2B2C business, where customers were local governments and consumers the citizens. Once the first city agreed to run the pilot, I prototyped a consumer app and went outside to validate the idea. I got great feedback, learned what the most popular features were and improved the UI. But I made a crucial mistake…I forgot about the customervalidation part. Looking back, I think I know what happened. Basically, when you’re in the eye of a hurricane, it’s hard to see the obvious. At the moment my customer said “yes” and I got good feedback from consumers, I was laser focused on development until the launch.
“Customer Development” is when you interview potential (or existing) customers to validate your ideas; This is a simple conversation, without any prompts or prototypes. Steve Blank, the father of customer development, defines it in four steps in his book, The Startup Owner’s Manual:
Step 1: Customer Discovery
Step 2:Customer validation
Step 3: Customer Creation
Step 4: Company Building
Blank’s first rule of customer development is, “There are no facts inside your building, get outside.” This is the most important step when starting to build a new product. However, based on my experience, I would add a few more ideas that could be crucial.
First, spend time on this first rule about “getting outside.” This is not a simple “checkmark” on a list. Don’t rush to Blank’s second rule, which is to “pair customer development with agile development,” as it can cause confusion and take you into development too soon.
I would also suggest reading “The Mom Test,” by Rob Fitzpatrick. This is a short, straight-forward book that teaches one simple lesson — how to interview without asking bias questions. For instance, you start by asking broad questions like, “What are your top problems with …?”, “What are your big goals and focus right now?”From there, you narrow down to the more in-depth questions like, “How are you dealing with this problem right now?” I applied this technique to another startup and it worked wonderfully.
So…Have an idea? Ready to start? Test your hypotheses with customer development, but ask the right questions.
Don’t Build an MVP, Build an MDP
MVP, or Minimum Viable Product, is a well-known concept created by Eric Ries in his book, “Lean Startup.” It’s the first product that a startup puts on their users’ hands. And, although it’s the best approach for creating a product, finding the right balance between what features to include or not is extremely challenging. This set of features can’t be too basic or it will make your product boring, with low user-engagement and a high churn rate. And that is what happened with my MVP.
We had no search capabilities, no images and no personalization, which was part of the core promise. Our analytics was also weak. We had many metrics, but very little data on the individual users, we never had quantitative data on who our power users were, for example.
I wish I had learned about the concept of Minimum Delightful Product earlier, but I was so full of myself during that time, I probably would have ignored it. ☺
When building an MVP consider:
1. Prioritize your MVP features appropriately. Discuss them with your teamand advisors. Consider not only the technical difficulty, but also the KPIs. (For more on feature prioritization, check out the book, “Hacking Growth,” by Sean Ellist and Morgan Brown).
2. Take analytics seriously early on, and hire a consultant. This will help you track the important numbers, which is not only fundamental to your business, but also to investors.
3. If you are not a developer, hire offshore to get started. You’ll save a lot of money.
Have a Strong Sales and Marketing Strategy
I will focus on B2B here, but if you’re building a B2C product, make sure you have a strong marketing strategy AND make sure to have a budget for it. Very few products go viral as Facebook did; don’t fool yourself.
Early on, I had many people telling me how difficult selling to the government was. My innate bravery and ego meant that, at that time, I couldn’t really hear that advice. In fact, I couldn’t care less. I had what I call the “product-market fit illusion,” and no one alerted me to that ☹
Let me explain: When we’re building our own startup, we are blind. Sometimes being hard headed is helpful, but not always. And that is the hardest part of it all; knowing when to set your ego aside, and listen to someone else, AND also knowing when to listen to your gut.
Right after I launched Lupn, I went to three Smart City conferences, put my banner up and smiled. The feedback was okay; people liked the concept but there were no follow ups. For the rest of the year, I split my time between product development and sales (and everything else the founder of a bootstrapped startup does). I wasn’t able to sell the product to any other city, and the hardest part was that I didn’t know why. I tried referrals, cold emails, and cold calls…but nothing worked.
After twiddling with sales for a while, I finally deconstructed a common belief — “if you’re the founder, you should be the one closing the first deals” — and concluded that it was ok to look for help. I did find some potential co-founders, but unfortunately, it didn’t work out, and I was already too burned out.
So, here you go:
- If you’re not into sales, hire a proven salesperson or find a partner that can sell. Know your weaknesses and don’t be afraid to ask for help. Know your strengths, and delegate when needed.
- Know what sales process works best in your industry.
- Allocate a budget for sales.
- Hire an advisor in your startup industry; especially if you are not familiar with it (like I wasn’t familiar with selling to governments).
To Sum it Up: Don’t be Afraid to Get Started
The most important lesson learned was the fact that I was able to do it. Yes, I had a lot of help, but I did it all by myself. I hired, I fired, I managed, I created, I sold, I signed, I designed, I cried, I laughed, I made it, I launched a freakin’ awesome product to 200,000 people.
After having kids, it was the second most exciting thing I did in life. Do it, and don’t be afraid to fail. After all, that’s the best way to learn.
“You don’t learn to walk by following rules. You learn by doing and falling over.” –Richard Branson, Virgin Group Founder
Please feel free to share this story if it had any impact on you. To connect and receive my upcoming posts, visit www.adrianatt.com.
Stay home, stay healthy!
For more insights on my learnings, join me at Tech on Tap Meetup, on May 20th, 2020.