With the Success of the likes of Facebook, Twitter, Whatsapp, Instagram, Tumblr and many other great Computer and Web Applications, thousands or possibly millions of Students all over the world are spending sleepless nights trying to come up with the next big hit.
Well I have been one of those and I have done failing apps before. Out of devastation, I went researching as to why my ideas haven’t made it. I thought it humanitarian to share what I learnt. If you watch out for the points I have listed, then most likely you are destined for greatness in your next venture.
Startups are stressful and no one is good at everything. To avoid burn out, you need a co-founder and/or advisors to split the work load and confide in. You’ll also be more productive with other people helping you, plus there will be more money to bootstrap with.
Startups take up a lot of time, so it’s normal to feel chained to your desk. But you need to interact with people and take productive meetings to move your business forward. No one can do a startup alone.
Having too many co-founders.
It can seem like a great idea to start a business with your six best friends (if actually you can have more than one best friend). But that means you’re starting out with just approximately 20% of the company before ever raising a round. Plus, it’s hard to have four or more people calling the shots and it’s frustrating if everyone isn’t pulling equal weight. Most startups with multiple founders dwindle down to one lead founder anyhow. Think Facebook, Quora, Path and Foursquare.
Do a startup yourself (like David Karp) or with one other person you know you can work with. Otherwise, it could be a messy and expensive breakup.
Trying to force a business that isn’t working.
You quit your job because you have a brilliant idea you’re sure will work.
Only…it doesn’t. Now what?
First, you should never quit your job until you’ve had a chance to test your concept and there’s a legitimate chance it will work. But even then, it’s hard to predict your startup’s future.
You may not have accurately predicted the way people would use your product, or customers may hate a new feature you love.
Move fast, break things, and kill things. Don’t hold onto a startup idea just because you’re enamored with it. Pull out a kernel of the idea that’s working and blow it up into a full-fledged business, or pivot altogether. Some of the biggest companies today arose from the ashes of failed startups.
Communicating poorly and ignoring critics.
When you have a startup roadmap in your head, it can be difficult to properly communicate it to others.
Keep lines of communication open constantly and force yourself to listen to critics. Learning how to manage people takes work. But if you don’t learn how to communicate, you’ll destroy your relationships with customers and employees.
Being a smart entrepreneur means knowing when to leave the table.
A lot of buzzy startups have gotten $100 million acquisition offers and decided to walk away. Usually that’s an admirable but stupid decision.
Foursquare could have sold for $150 million when it had only raised $5 million. Video startup Qwiki had an offer to sell for over $100 million and now it may be selling to Yahoo for $50 million. Path was offered big bucks by Google but its founder Dave Morin turned it down and has had a bumpy road since.
For first time founders especially, seize a life-changing opportunity when it’s offered to you. Save going all in for your next startup.
It can be better to sell for a smaller amount of money than for hundreds of millions of dollars. A $20-30 million exit takes less time to reach and less outside capital to fuel than a $200 million exit.
Not Dreaming Big Enough
There are people who are practical and there are people who are dreamers. The best startup teams employ both types to keep them grounded while working toward a massive achievement.
If you think too small you’re limiting yourself and what you’re capable of. When you’re creating something from scratch, you can create anything of any size you want.
Investors say 10 million users are the new one million users, which has startups scrambling to scale quickly. But if you’re only focused on growth your product will suffer.
Different types of startups grow at different rates. Set growth goals based on the trajectory of similar startups and manage your expectations accordingly.
If you’re running a media company, you’re going to have to wait until you’re big enough to hire a direct sales team before you make money. That could take years. If you’re running a transaction-based business, know what margins you need to sustain a lasting business.
Telling White Lies
Since startups are private companies, they can lie to journalists and investors who don’t perform due diligence. If you’re desperate to raise capital or keep your startup alive, you may be tempted to tell a white lie about how quickly you’re growing or how much money you’re making.
If your startup is failing, the truth will come out eventually. Lies just delay death and keep you from founding something worthwhile.
Getting Press too Early
If you’re a startup looking for press, the first question you need to ask yourself is “Why?”
Why do you need press? Are you really ready for press? What will an article help you achieve?
If you want press to make yourself look cooler to friends or employees, you probably shouldn’t be seeking it. If you’re doing it to gain users, the bump will likely be temporary. Just look at Turntable.fm, Airtime or Brewster.
In some cases, press can be good. It can attract investors if you’re seeking financing. An article in Ad Age could attract advertising dollars.
But if you haven’t nailed your business model or product (and chances are in the first year you haven’t done either of those things), do you really want your name out there only to fail a year later? That’d be more embarrassing than never having press in the first place.