This post is part of a Startup Edition series on mistakes made
When I dissolved my startup it triggered one of the most euphoric feelings I’ve ever experienced. The lock popped on a trap I created for myself, and I was filled with an instant urge to start something new and better.
So much of entrepreneurial success is the refusal to accept reality. We bend the Universe to conform to our ideal of a better world. We believe it when no one else does. And sometimes we’re right.
But this stubbornness comes at a high cost. When things aren’t working out, hungry and foolish like you and me are the last to know.
How did I get to failure?
The decision to shut down the company happened on a picture-perfect summer afternoon. Thunder split the air as the Blue Angels precision flying team practiced their maneuvers.
As the F-18 Hornets simulated aerial combat overhead, my co-founder and I hurled accusations across the kitchen table. It wasn’t planned, but it couldn’t have been more cinematic, or more iconic moment to end a business relationship.
Eighteen months earlier, my friend and former roommate joined me on a mission to create an online learning platform. The goal was to deliver live, video instruction enabling people to sell their expertise online and earn money, similar to Udemy and SkillShare. We thought we had a viable niche serving baby-boomers who needed “upskilling” to perform better at their current jobs, or to transition into different roles in the new information economy. We wanted to make the training process efficient, cost effective and customizable, without the need for a pricey, arcane university credential.
I would come to learn out startup success is more much about avoiding crucial mistakes than it is about executing the grand vision.
The 10 Biggest Mistakes I Made
The following is a collection of mistakes I made as founder of Future Forge Labs, an edtech venture I ran with a friend for two years.
Choosing the wrong co-founder
Choose the wrong co-founder you’re doomed to die a slow startup death.
I chose my friend and former roommate to be my cofounder because he could code. When I asked him to be part of something, he said yes. No more thought went into it.
It was much later when I learned that experienced entrepreneurs perform excruciating due diligence on potential cofounders before entering into a professional relationship.
Choosing your co-founder is more important than picking a spouse. And in the end, you’ll bicker like a married couple, but you need to find ways to make it work for the good of your startup baby.
We were wrong for each other in so many ways, but the pivotal moment came for me when my cofounder and I argued for 20 minutes about the type of paper to use for our business cards. We dug in our heels, bickered relentlessly, and in the end no business cards were ever printed or even designed.
There were plenty of small and large disagreements after this one, but it characterized how petty and uncooperative our relationship had become. Most of our fights were about ego–actually all of them were–and we had no mechanism for settling disputes. Disputes like these were not about what was right for the customer or the business, but instead who was wrong, and why. I still shudder at the thought.
On the flip side, my favorite bit of startup culture were the “board meetings” we would have at a nearby tennis court, flinging a frisbee over the net and chatting.
Don’t build a business you can’t afford
We built our business in anticipation of receiving VC money. Our servers ran open source technologies, but the cost of operation and serving live video would be exorbitant with any amount of success. Without an infusion of outside cash we would never be able to grow the product we had created.
As a former Silicon Valley tech reporter I was confident in my ability to raise money as soon as we had something to show.
Chasing down VCs is not unlike corralling sources for news stories, but it is a ton of work. Getting funded is a full-time job, which means you’re not working on product or serving customers. Bootstrap your business, or don’t build it. Once you take money you become an employee.
Fail fast and move on
I was ready to pull the plug nine months before we called it quits. I was stubborn and thought I could will my way to success. My gut told me it wasn’t working.
Failing fast can mean abandoning features or ideas, or even the concept of a business. The faster you decide, the more time you will have to work on something that has a chance to win.
Your business should reflect your personality
We thought we would be selling to stodgy, faceless corporations and hoighty toighty higher ed administrators. We never spoke with any, but this became the operating assumption. We molded our company to fit a perceived image that would pass muster with these fictitious and ever-so-discerning customers.
The image we projected and who I am as a person were at odds. As I’ve written, it’s important for startups to own their swag because we do business with people we know, like and trust. If you’re a quirky, colorful and fun-loving person there are enough businesses and customers out there that reflect your values. The more you let your personality shine, the sooner you will find each other.
Build community before you build product
Forming an active community before you launch is the cheapest and most effective form of public relations your startup can get. Community allows you to listen to problems and gather user feedback that will help you deliver the most effective product possible, and have a built-in customer base before you go live.
Your MVP needs to be a minimum viable product
At Future Forge we didn’t have an MVP, but we spent more than a year arriving at a workable prototype before showing it to anyone.
My cofounder spent months and thousands of dollars of his own money to launch our MVP. Technically it may have been a masterpiece, but it was hard to tell from the user’s perspective–and in the end that’s the only opinion that matters. If we had started with a lightweight MVP–even an email signup form–we could have validated our early ideas, and built a product based on the needs expressed by the market.
Instead we created a solution in search of a problem. Somewhere out there hundreds of customers are still waiting to have their lives transformed by our our platform. Not!
Eat your own dog food
The term “dog fooding” is a well-known concept about being an enthusiastic user of your own tools.
If you build a factory to make dog food, you’ll be in serious trouble if your dog won’t eat it. The only way to know is if you sample your product and delight in using it to solve your own problems.
If I’m honest, I didn’t delight in using our product, and days would pass where I wouldn’t log into the site we’d created. I allowed myself to be seduced by the business value of our product–and the market size–and overlooked the user experience. This should have been a sign.
Focus on problems, not markets
The accelerator model, as exemplified by Y Combinator, TechStars and others encourages founders to focus on markets, not problems. It’s no one’s fault. VC needs exponential returns, and the only way to do this is serve a customer base of millions. But accelerators and venture funds make multiple bets in the hopes that one out of 10 will be a LinkedIn or Palo Alto Networks.
You’re not a bet, are you?
At Future Forge we looked at the gargantuan education market and saw limitless opportunity for success. Although we narrowed our problem set to skills-based, adult education, we should have chosen a specific use case that we understood better than anyone alive. With 314 million people in the U.S. you can live quite well off a large slice of a small pie.
Don’t hoard ideas
No one wants to steal your startup idea.
Share what you’re working on and get feedback early.
I spoke with Matt Mireles, co-founder of SpeakerText, who encouraged me to reach out to our competitors and find out why they weren’t tackling the problem we set out to conquer. Opportunities materialized the moment I told family and friends what I was working on.
An idea is nothing without implementation. Share early and share often.
Don’t Incorporating too early
We incorporated in anticipation of customers, but we didn’t have any. This was a costly and time-consuming mistake. In the end our lawyer and the State of Delaware got paid, but incorporation did nothing to advance our goals. Even shutting down the company cost $750, which came out of personal funds.
In the future I would postpone a Delaware incorporation until a legitimate customer need or serious investment opportunity necessitated it. Otherwise, it’s one of those vanity metrics that are meaningless to the bottom line.
A few lessons learned
Forgive me for waxing on, but I’ve never shared this experience before, so I jumped at the chance. If you got this far then I imagine the preceding tips have been helpful. Below are a few more lessons I learned along the path to startup failure.
Set goals for yourself
These days I set S.M.A.R.T. goals for everything, and I map out success before I begin. “If you stand for nothing, you’ll fall for anything,” as the saying goes. The ability to confidently say no to things that don’t fit into the master plan is crucial to success. The only way not to waver on the path to success is when you have a clear destination in mind.
Take care of your brain and body
Mastering your psychology is crucial to success. So too is maintaining proper health and diet. You’re in it for the long haul, and you need to preserve mental energy and physical vigor to get the job done right
You will bounce back
While I’m not invincible, I bounce back stronger every time. However, resilience isn’t enough to succeed. Rolling with the punches is not the same as creating and executing a plan of attack.
Build a lifestyle business
My final piece advice to aspiring entrepreneurs is to build a technology-enabled lifestyle business, not a disruptive tech company. A lifestyle business solves a problem, often one you know well, and uses technology to deliver results to people. A disruptive technology startup aims to transform a massive market such as travel, education or publishing by using deflationary economics to deliver products or services at scale. I don’t know the failure rate for disruptive technology companies is well known, but the high-profile payouts are rare.
You’re going make less money with a lifestyle business, but you’re going to have more fun.
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