For repeat entrepreneurs what did you change the second time around?

February 20th, 2013

In the effort of helping others not suffer the same pitfalls, what were your top three mistakes? What did you learn from them? How would/did you avoid them?

Tony Rajakumar Founder/CEO at SnugBoo

February 28th, 2013

That's the thing about life - you only regret your own mistakes :) Having said that I thought there were several pointers that resonated with me:

* Market is everything - this is the #1 rule. If what you're selling is something that has a large market demand, then pretty much every other issue is nullified. You can screw up and still come out ok if the market is big enough. If you understand your market, the product and its evolution and pricing and marketing all fit together nicely. And the simplest way is to ask for feedback from the market.

* Fit with customer behavior if you can - don't try to make them change behavior or even think. Lower the cognitive friction the customer has to suffer.

* People - treat all people you meet with respect - customers, employees, investors. Everyone.

* Understand the role of luck and that of skill - you could make all the right moves and get a product out there that's awesome, but if say you picked the wrong people, it could all unravel in the blink of an eye. You can control only what you can. Success is often not deserved, nor is failure.

--Tony

Michael Sattler President, Splitzee

February 23rd, 2013

I could fill a book with what I've learned with my startup experiences. Never go it alone, don't confuse a market wish with a market need, never fall in love with your idea, traction matters first and always ... the list goes on. Most of the time this question is high-level - almost philosophical. But I'd love to see a repository (maybe even a discussion framework, Quora-style) about what people learned related to specific business experiences.

For example: the original concept for my company Cauzoom was "crowdfunding-for-social good-plus-cause-marketing." We offered a Kickstarter-style project funding platform that offered deals from businesses to help meet a project's goal. To wit: "Buy this $100 gift card to Whole Foods and $20 will go to set up a community garden in your home town." The concept was well-received, we got some great early traction - but six months in we discovered the business that had shut down two years earlier after trying the exact same thing. Turns out that nonprofits are HUGELY resistant to new fundraising ideas and businesses don't like using gift cards as promotions. I wish I had known about this company's experience BEFORE I committed to my idea - I wouldn't have repeated their mistakes and probably would have pivoted sooner. The fact that I learned about them at all was random.

Think about how many startups out there right now are clueless about the mistakes their predecessors have made, and how hard it is to dig up the legacy of vanished dead-pool ventures. Imagine a place where you could post a company profile and get official (and unofficial) comments on what mistakes were made and what went wrong. Let people connect directly/confidentially with founders. Find ways to lessen the stigma of talking about failure (let people vote on the ideas that never should have gone away, for candor, for novelty, for so-crazy-it-should-have-worked, for "most likely to be resurrected", etc.). Make it fun. It would be a huge asset.

Umang Jaipuria work in progress

February 26th, 2013

Great question, and great pointers from everyone.

However, I can't help but wonder that everyone's situation is so specific that it may be hard (inaccurate?) to generalize one experience and try and apply elsewhere. Thoughts?

Anonymous

February 20th, 2013

Awesome question. My first startup was very successful in a monetary sense, but I learned a lot about how not to structure a business as well! I very quickly built a bootstrapped ecommerce company to a consistent $2M+ annual revenue rate at a very high margin, but ultimately the business wasn't scalable. I had boxed myself into a corner because the "secret sauce" was really just me--my expertise, my connections, my curation, my reputation. There was no way to recreate that in others without potentially damaging the brand/business/my name. I was able to hire people to handle other facets of the business, but ultimately I realized this wasn't a "forever" company. It was a great 6 years, and I learned a lot. Learnings: 1. This time around, I'm going much more slowly, planning much more carefully, and always totally focused on both scalability and the idea that everyone is replaceable--myself included. 2. I'm also only planning to bootstrap for a limited time and I've put a huge amount of energy into building a product and messaging that's equally appealing to both users and investors. 3. I'm pushing way past my own skillets and comfort zone, prioritizing certain things (Analytics, financial modeling) that are not my personal strengths but are fundamentally necessary to building a successful long term business. 4. Partner. Lean on others. No man or woman is an island. I have a cofounder and two part timers already, and we're still pre-revenue, early beta. And it's paying off! Just today, for instance, while considering a marketing idea, we realized that our personal networks represent over 12,000 individuals. There is truly strength in numbers. Hope this helps! Cynthia Founder, AbbeyPost

Michael Barnathan

February 20th, 2013

My primary mistake the first time around was building what I thought was necessary, not what I thought the market thought was necessary. I didn't do enough market research, and as a result, spent months rolling a boulder uphill.

It's especially important for the first startup to connect with your market. Once you've established a core area of competency - a niche - you can start to broaden out into brand new territory adjacent to it, priming the market you've already captured to accept it the entire way.

Vijay MD Founder Chefalytics, Co-owner Bite Catering Couture, Independent consultant (ex-McKinsey)

February 21st, 2013

I rushed on the people side (it was taking to long to find the right hire) and outsourced mission critical tasks I didn't understand (and a co-founder didn't feel responsible for).

Ended up learning a lot about how people game milestones in contracts and what ultimately makes a technology fail in implementation (e.g., not built to be easy to pivot).

Key takeaway = your plan is going to be wrong and you'll need talented people who are bought into achieving the mission to make it work and scale. Don't rush this step even if you think your idea is game-changing...you'll end up making decisions that will change the impact of your idea in a very negative way.

Jia Jiang Entrepreneur, Author and Keynote Speaker Who Turns Rejection On Its Head

February 25th, 2013

My top three pitfalls were:

1. Started with a cool idea rather than a problem to solve. There are many cool ideas out there now days, especially in the mobile space. It's very very tough to outcool others to win mind-share.

2. Tried to change/add to customer's behavior rather than tagging into their existing behavior. Now days, things need to happen automatically rather than asking people to do extra work. For example, Mint.com tracks your transactions rather than asking you add them.

3. Look at the competitive landscape early - my idea might be cool, but is it really true that no one else is doing it? If others are doing it, what's my competitive advantage over them? If I can't articulate exactly why people should use my product rather than my competitor's, then I shouldn't enter the market.

Oh, when you get rejected, know it's an opportunity and have fun with them. :)