I thought I would make millions through my startup, but failed miserably. I read awe-inspiring stories of Flipkart and Zomato, but nobody told me that 90% startups fail within two years of their launch. I failed in the first year. Sometimes I feel cheated, but it was my fault that I failed to look beneath the glitter.
I built an ERP product for schools. We attracted some customers but could not scale up the operations.
My startup failed. But I refused to be defeated. The failure of my startup made me introspect on the shortcomings and I wish to share a few tips with you. Hope these takeaways from my failure help you avoid similar pitfalls.
Know your customer before building your product
The point should be clear by now. We built our product based on assumptions and the features of our competitors. We should have reached out to our prospective customers before building our product.
We should have convinced two or three schools of different standards to test our product. In exchange, we should have provided life-time free product and support for early adopter schools. We could have offered unlimited free SMS or something similar to save money.
Know where to spend money
We spent most of the money on office infrastructure and employee salaries. We could have avoided 80% of expenses by working from home and hiring employees on survival salary + ESOPs.
We were avoiding expenses on the professional design of sales material, marketing tools, and paid consultancy. We should have spent money on the things that translate into more sales or leads.
Now it seems a no-brainer, yet most first-time entrepreneurs commit the same mistake. If the primary source of your customer acquisition is your website, then you should spend money on content marketing, sales deck, and sales pages. If you acquire your customers offline, then spend money on sales brochures and other printed materials.
Involvement in Tech
Non-technical co-founders are clueless about technical know-hows and tend to remain so. They should not behave like a foreign client who just assigns work and expects them to be taken care of by the technical team.
That did not work in my startup and it will not work in yours.
I advise you to start coding, even if you are non-technical. There might be some exceptions (that we can discuss in subsequent articles) but a non-tech co-founder can take better decisions if he knew how things in the tech department get implemented.
If you do not have a tech co-founder and still building a software product, then there is no exception. Joel, co-founder of Buffer, tells you why non-tech co-founders should learn coding.
Involvement In Sales
I shied away from conducting sales because I thought my co-founder was better at communication and public speaking. We were unable to close sales despite his good communication and HR background. One main reason was that we were not talking about the pain points of the customer but just trying to sell our solution.
The sales process is not just about good public speaking but addressing the concerns of the customer.
When I moved to Chandigarh, I tried sales in the local schools. I visited about 50 schools in one month and closed three deals. I learned not only the sales process but also got acquainted with customers’ real issues. You can build a great product with a better understanding of customers’ pain areas.
Disclaimer: I am not suggesting that all co-founders should be doing all the things all the time. NO. They should be owners of their areas, but at the same time they should have first-hand experience of all levels of jobs in a startup.
Trust your Intuition and Be Decisive
We were bad at taking firm decisions. We started postponing tough decisions like spending budget of sales, hiring or firing an employee, offering equity to the employees, chasing big schools or small schools, offering free solutions or charge premium, and lastly how to go separate ways.
Since the closure of my first venture, I started taking firm decisions based on the available information at that time. You can never have 100% data available for taking any decision. You should be smart enough to derive a conclusion with 60-70% information and fill the gap with your intuition.
Trust me, I always felt good after taking a decision and sticking to it until I found solid evidence to change my decision. That is how things evolve. If you are confused with your decision, then you will not be able to execute with 100% confidence.
Don’t Stop Learning
Alarm bells ring in my ears when someone starts behaving like an expert and refuses to learn new things. You are doomed to fail if you stop learning.
There are so many sources of gaining more knowledge and insight learning – reading books/blogs, from juniors/seniors, from competitors/customers/vendors. I don’t hesitate to learn from my three-year-old kid.
The biggest source of my learning is by experimenting with my startup and life.
Money is Just a By-product
I learned it very late, but some of you might have realized by now. We entrepreneurs start a venture to solve a customer’s problem (or to explore our passion) and money is just fuel for our startup vehicle.
If you focus on money then you will become short sighted. You can make money in short-term but you will lose strength in the long term.
Focus on solving problems and keep your customers happy. The money will follow.
…and Be Generous
The most important lesson from my entrepreneurial journey – Be Generous, Be Polite, Be a Giver.
I always remember a beautiful line –
“Be nice to people on your way up because you’ll meet them on your way down.””
First give something to the world, then expect something in return. It will be even better if you just give without any expectation. Help people who cannot help you -that is the real gesture of generosity.
Note: This is an excerpt from my complete story