Technical co-founder · Fundraising

Most challenging obstacles for the first time startup entrepreneur?

Austin Cornelio Co-Founder & Frontend Engineering Consultant

November 27th, 2013

Hello fellow members,

I am exploring some new product ideas and wanted to hear this groups thoughts on what was some of the most difficult hurdles when launching their first startup or even post launch hurdles.

It can be anything from funding, team building, sourcing talent outside of your skill set, bootstrapping, etc... I'd like to hear other peoples thoughts so I can compare them to the research I've been doing outside of this group.

Thanks and happy holidays!

John Wallace President at Apps Incorporated

November 27th, 2013

I feel for you, Dimitry. Being an entrepreneur can be lonely. What bothered me is that at times I wondered if their well-meaning-yet-soul-robbing advice might actually be right. I found Robert Fritz's book "Path of Least Resistance" to be a big help in understanding why I create and how to be a better creator. I've also attended his workshops. Wisest teacher I've ever had.

Monica Borrell CEO and Founder at Cardsmith

November 27th, 2013

Thanks for the book recommend John. It looks like a good read, so I just ordered it. I also get concern/advice from family that my start-up is taking too long and perhaps I should give up and get a job. 

For me, in a software business that I'm trying to move from concept to prototype: 
the biggest challenge so far has been team. I initially started creating a software application without the right team and ended up wasting a lot of time and money. I think in a startup the right team has just as much to do with attitude, personality fit and maturity as it does with skill sets, although skills are obviously important too.  


Dimitry Rotstein Founder at Miranor

November 27th, 2013

I'm sure I haven't yet experienced even a small part of startup-related problems, but so far the hardest part is loneliness. No one understands you and your vision, no one shares your ambitions... that's hard. Family, friends, they keep telling you to "stop this nonsense" and go back to the "real" work. Co-founders are hard to find, and those I had found I wish I wouldn't have had. I'm sure that loneliness is a huge problem because generally I like being lonely, but now, for the first time in my life I suffer from it. If a more social person was in my place, he'd probably caved in a long time ago. Hope that answers your question.

John Wallace President at Apps Incorporated

November 27th, 2013

Undoubtedly the hardest parts are (a) getting the product to a place you can start making revenue, and then (b) actually getting customers. All of the other items (team building, funding, finding great talent, etc.) all suppose you have a product that someone is buying. I've done about a dozen ventures. Some went huge. Some went nowhere. The ones that went nowhere were usually because someone else with a similar idea beat me to the customers.

Timing is everything. As company builders, there are hundreds of things we must do to create a company and manage it well. In the beginning, only a handful of those matter. In my early companies, the biggest mistake I made was spending brain time on things that didn't matter at that moment. I now grade things based on their ROI, and if it's an important item with no immediate ROI, then I put it on a list and try to not even think about it until it matters. One question I ask myself is "If I did this later, would it have as good or better ROI than doing it today?" 

When you are starting out, that's difficult advise to follow. Until you've done it a few times it's hard to know what matters. Right now, when I'm building something I ask: "What do I want to build? Will there be an adequate and growing market for this product when I'm ready to ship? Who are my customers? How do I reach them? Will they pay enough that I can rapidly grow my business? Who are my competitors? Do I have a significant edge over them so that I am able to compete? How am I going to build this product? How am I going to market this product? Are there skill sets I'll either need to hire or learn to pull this off?" After that I can start building the product. And then when the product is getting close to beta I can start creating and executing on the marketing plans. And as far as funding goes, I don't like to invest my time in pursuing money before I've proven the product. Raising money usually takes considerable time for inconsiderable dollars, and I lose valuable time where I could be building something and learning through experience about my product/customers/competition. 

Time is money; in the early days about the only money we have is our time. Good luck, and Invest well!

Michael Barnathan

November 27th, 2013

John brings up an excellent point - you can't simultaneously fix scope, time, cost, and quality, and it's usually on scope that you'll want to bend. Discipline yourself to prioritize the features which really need to go into your product NOW, and put the rest aside for the next release (this is easiest to do in software, but applies elsewhere as well). Don't be afraid to drop things from the pipeline altogether if the market indicates a better direction for your product, even if you've already put a lot of work into them. Remember that you're in a continual process of finding out exactly what your customers will buy.

I don't think being beat to the punch is as significant a threat as most people make it out to be - unless you've given competitors enough time to become *really* entrenched, you can still beat an incumbent with a better product or user experience. Releasing in one month or two is unlikely to make the difference. More troublesome are systematic changes to the landscape: let's say you announce a Google Wave plugin right before it gets discontinued. Whoops, better pivot quickly.

Most failures I've observed have multiple contributing factors, but one of the most recurring I've seen has been a lack of discipline on the founding team: jumping to a new product area too quickly - or too slowly. Not filtering ideas enough, or filtering out too many. One part of the team having unrealistic expectations of the rest of the team (you can only sell as fast as your company can service those sales; asynchronies in your pipeline can put a lot of strain on your company and team if you try to follow through on them). Sometimes simple lack of compatibility.

I've experienced some hurdles personally as well, usually in team composition: going it alone when I really needed a partner, or going in with partners when I needed to go it alone (it's a misconception that you should always have multiple co-founders. There are some businesses that you really should run on your own; my first success was one where I made the judgment call to deliberately run solo). In a case where I did need a partner, getting so desperate that I selected the wrong partner - that's really hard to recover from.

Going into a two-sided market. Think long and hard about how you're going to get one group on without the other before you engage in any sort of matchmaking.

Going into a heavily regulated market: investors don't like regulatory risk. Don't do this until you have a lot of cash upfront, or you'll encounter a circular dependency between funding the regulatory filings and getting regulatory clearance so you can raise funds.

Just keep learning, when things go wrong - and when they go right.

Mark Cline Developer at PitchPoint Solutions

November 27th, 2013

Excellent question Austin!

I am sure everyone has different challenges as everyone has different strengths and weaknesses, but for me, it was the accountability part. I did have peers to help keep me accountable and it helps for certain (make your 'goal setting' more global and give others visibility into it, and by 'goals' I mean the steps you are hoping to get accomplished each month, week, day). It was possible though to break promises made to myself easier then it was to break promises made to others. 

Life is a learning lesson though. The current project I am working on I have a few partners as well so it enables to shrink the world I can focus on. The other benefit with partners is they can see things I miss. Truly, two heads are better than one (although finding the right partner is a whole other challenge :-)). 

I'm looking forward to see others found was the biggest challenge (and probably get some insight into issues I had I didn't place).

Mark.


Bill Kelley

November 27th, 2013

Mark's answer is very good and applies to 2 of the 3 most recent startups I've been in.

But I think on a broader scale, I've seen resource limitations as the near-universal issue: money and/or availability of producers. Without big funding, most participants in your startup will be splitting their time (leading to Mark's issue). Getting money can come with a big cost, so everything is a balancing act for the entrepreneur. 

There will be instances where money and available resources are not the issue, but market acceptance is. I was in a dot com in 2001 that had burned through $27 million in VC cash to develop a broken MVP based on a principle and business model that looked great on powerpoint, but not a single customer could be attracted to it. 

Austin Cornelio Co-Founder & Frontend Engineering Consultant

November 27th, 2013

Great feedback all! I really think these are all great points, I have experienced many of them and even forgotten about some similar past experiences that some people bring up.

@John Wallace - your first two points about product development are great and am currently experiencing this with one of my own ventures. Also, great advice about running tasks through ROI logic, and yes this is a difficult thing to wrap your head around when one is just starting off. Ones natural instinct is to act on as much as possible in fear of missing the mark on something.

@Mark Cline - great comment about accountability. This is one area that I'd like to focus on specifically, and see if I can come up with tools to help teams with accountability problems and or goal/task setting. I believe that the two go hand in had.

Thanks again,
Austin

Anonymous

December 1st, 2013

Hi Austin, 
this video also contains great information (as many other video in the TWIST series):
http://www.youtube.com/watch?v=0nky5JbWmkU
have a good weekend!
G.

Austin Cornelio Co-Founder & Frontend Engineering Consultant

December 2nd, 2013

Guido, This is great! Thanks so much for sending this over. Super informative. Best, Austin