We started our journey in the wrong direction and we failed to change direction with time.
The craze of startups has influenced people to such an extent that everyone wants to start their own company. People read success stories but ignore the fact that more than 90% companies fail within 3 years of operation. Our startup, SchoolGennie, is one such startup that never lived to see the light of day, which we had started in 2013 but had to shutdown earlier this year in 2014.
I wanted to share the top seven reasons for our startup’s failure.
No Market Validation
We wanted to build a Zomato like platform for school listings & reviews but later realized that parents research for schools around admission days only. Then we thought of doing something else for the education industry. With little knowledge about schools, we decided to build an online collaboration platform for parents and teachers. We thought that this was a much desired product which can help build great relationships between parents and schools.
Do market research (product-market fit) before writing the first line of code
We sowed the first seed of failure when we started building the product without validating product-market fit. We could have done better things if we had few school signed up before starting product development.
Waiting for the perfect product launch
In my experience, there is no perfect product in startups. My suggestion is to keep on building and keep on releasing. We were not aware of the Lean Startup concept which says, Build fast — Fail fast — Fail cheap, and keep iterating until you succeed. Unfortunately, we kept investing time in building an awesome product with great user experience and mind blowing features.
Launch an MVP (Minimum Viable Product) as early as possible and keep improving the product with feedback from early customers
We could have saved a lot of resources with an early launch of the product. Customers should have been given an opportunity to test a demo version, even with a shitty user experience and half baked features. We spent almost half a year to come up with the first demo account, which could have been done in the first month itself.
Following in the foot steps of Competitors
When we finally launched our product, we were confronted with the harsh reality. Customers were not interested in our offering at all. We then started looking out for what our competitors were selling. This was the opportunity to focus on our USP (unique selling proposition) but we started building what our competitors was already selling.
Focus on something you are very good at — but your competitors are not
We hired people from our competitor’s sales team, we tried to sell with a similar pitch, we prepared similar marketing material, we even tried to align our product features with the competitor’s. Our efforts, however, failed because we could not compete with competitor at points where they were good at — but we were not!!
Spending money on unwanted things
We spent too much on unwanted things like an office, furniture and electrical appliances. We could have optimized expenses by running operations from our home.
Spend money only if it helps in releasing software faster, test faster (customer acquisition) or pivot faster
Startups have to spend money on hiring talent and there is no alternate unless you have time to do things yourself. Actually money was not the primary reason for our failure. Rather we could have done much more with same amount of money, like hiring more smart developers to build & test our product faster.
Lack of Vision
Ultimately we lost track of the vision!! We forgot why we had started the company in the first place and where it should be in two years or five years. We were saying something and doing something else. We wanted to collect student data from 1000’s of schools but we were trying to sell to top schools only. We did not have a clue of our key growth metrics, unit economy, sales conversion ratios or product road-map.
Startups should keep an eagle-eye focus on it’s Vision and keep changing strategies and products to achieve the end goal.
The influence of wrong kind of people also disturbed our thought process. We discussed things with people who had no prior startup experience but they were successful in corporate jobs. My suggestion is, do not follow the advice of corporate guys. I am not saying they are wrong but things work differently in startups.
Startups have to explore their own growth path, don’t be afraid to experiment with new things.
I believe every startup reaches a stage where hard decisions have to be taken. Delay in making these decisions can have a negative impact on a startup’s growth. Founders should sit together, discuss deeply about issues, take firm decisions and move on!! There are good decisions and there are bad decisions. No decisions are just bad decisions.
If founders are clear about what they want to achieve, then they can take quick and efficient decisions. Otherwise they take a decision one night and the next morning want to change it again. This indecisiveness can be really harmful.
Something similar happened with us when we were to decide for sales partnerships, establishing new sales channels, our product roadmap, equity allocation to team members, pivoting the product and finally during the critical decision of running or shutting down the company.
With time, we (founders) had differences in our thought process. One of us wanted to try new unexplored things and the others wanted to follow processes of big successful companies. One of us believed in open culture, where anyone can contribute in any area, but others believed in a closed culture where two teams (dev & sales) should not share know-hows of each other.
This friction and lack of cohesiveness was also the reason for delayed decisions. Hence one more step towards the death of our startup!!
A startup should genuinely invest time in finding good mentors. We could not find mentors for our-self or honestly we did not try hard enough. Mentors can be really helpful in critical times when a startup needs expert advice, connections into new networks and resolving internal conflicts.
We are no longer working on SchoolGennie but it has been a great journey so far. I am really grateful to my co-founder Amit, who trusted my capabilities and gave me the opportunity to work with him. He was instrumental in bringing me out of corporate world and introducing me to amazing world of startups.
Failures are not always bad if we know how to handle the post-failure situation and apply it’s learnings in future endeavours. On the upside, I now know some of the ways things don’t work and I will avoid repeating my mistakes. SchoolGennie’s experience actually helped me getting into my current startup, PocketScience, where I joined as a co-founder.