PerceptionBox works a lot with different VC backed startups on different stages of their lifecycle. We help them with software development providing with skilled developers, exciting designers and sometimes with business advising services. However, we do not do business instead of them - we can help them, nothing more.
During our work, we've noticed that most of them make the same mistakes or getting onto the same business pitfalls. That is why we decided to gather pieces of advice of experienced entrepreneurs and share them with you. Today we're publishing the first piece of our series of posts based on the experience of rockstar entrepreneurs.
The opening post is a reworked piece of advice and is based on the Suhail Doshi tweetstorm, 29 years-old entrepreneur and CEO and Founder of analytics company Mixpanel. He has found 5 different companies that each failed within 9 months. Each time the company failed he figured out what he could do better. Eventually, only startup №6 got to $40K/mo by the 18th month of its existence. Below are listed the things he learned from his way to startup success.
Ignore things that are a waste of time: meetups & conferences, meetings with no clear agenda, fundraising if you're not fundraising, reading lots of tech media articles, etc. Every week you should feel like significant progress in the first year.
Your first 5 hires will be the most important hires in your startup life, eventually its the difference between life or death. So choose carefully. Be picky. Many of the things we do at the company still are a result of those early hires' legacy. Have fun as a tight-knit team. It will change & evolve as you get bigger so enjoy this moment. But don't forget to evolve with your team!
Growth may be flat for the first 9 months. And it's definitely okay for every business and especially for every startup. Almost every company has experienced this: Airbnb had to sell cereal in-between, Slack failed as a gaming company first, Tesla sold only 147 cars in 6 years! Every startup needs some time to find product-market fit. Even unicorns required years to become unicorns - you probably won't be an overnight success either.
In the beginning, do customer support yourself. You will learn a lot about why your product sucks. Suhail did 5,000+ support tickets when there was only two founder in the company. Delight your customers, talk to your users and fix things fast while you learn. It will help you build an amazing intuition about your customers and market itself.
If your competitor made something your customers love: remove your ego & build it. Nobody cares who built it first. But, make sure you understand why. Don't blindly copy things either you should understand why your customers like this feature - that can give you a critical competitive advantage in the future. Go back to the previous item to find out how to do that. Definitely, that will be invaluable and will help you to win critical battles over the years.
Do not spare time for figuring out how to explain your product. If it's easy to do, figure out how to explain why it's different as simply as possible. Done it again? Keep do it until you can. Wrong positioning can significantly weaken your future growth. It can often be the diff between success & failure.
That is your mantra you should follow. In the very begging, you should save money as much as you can. Don't waste. Ignore status. Focus on building your business or whatever will help you make money. Make people think you're bigger than you are. Do things the larger company won't do because they move slow.
If you have a co-founder define your roles and focus on it whatever it takes. You both can't be in charge of all engineering, product, design, & business decisions. Even if you think that you know everything (spoiler: you are not) - trust your co-founder or do not do business with him. Being in charge of everything can blow up your company and it usually does! Debate vigorously, but make a call. Opt to test ideas vs throwing them away though - especially if it's cheap to do.
When you do a startup you lack data and as everything else its okay. To compensate: talk to customers, meet people who will play a devil's advocate or just have opposite thoughts. Meet the people lived through it and who can teach you something. It will make a meaningful difference in what you'll learn.
What was done, what was popular, what has been changed and why. Not only your competitors but the whole market as well. It will help you identify old and long-standing assumptions, challenging obstacles you will face, and the years it took for old players to build critical features. If you fail to do it in the very beginning - it will hurt you later.
If you have bad customer retention, you're probably not ready to scale the company. Fix that first, then focus on growth. Don't forget that acquiring customers several times more expensive than retaining them. The number one reason why the most of the companies fail is by becoming addicted to a clever distribution strategy before their product was good enough. First, build a trap for your customer that won't be able to live without your product.
If this is your 1st time to start a business, consider some accelerators or business clubs. Having a crew of experienced people to commiserate and give an advice in the early days can help you overcome existential moments. You will struggle to raise money, to find customers, to build a product, to find your fit. Going through it together can make you more resilient and help you to succeed.
You always have a narrow set of problems you should solve. Don't let exiting new things take your mind - it will hurt your business and you may lose customers. Find out what things really matter for your startup and dedicate all your time to such things.
Realize that this is one of the most exciting phases: building the company from scratch. Experimenting, trying to figure out what works & what doesn't. Building amazing things that never existed. You're building something bigger than you are yourself, and pretty soon other people will become a part of it!
Of course, if you do everything right and don't fail everything. So good luck to you!
That is the first post of our new format. We will add more soon. Keep in touch!