3 Things I Wish I Had Known Before Launching My Start-Up
In August 2017 my life took a turn when I decided to abandon my original entrepreneurial endeavor of starting an air-conditioning service company. An industry I know well, in a market I knew and understood even better. Instead I decided to pursue something I knew absolutely nothing about; self-fund the development and launching of an app into an emerging market.
I had listened to hundreds of podcasts and countless books, before I set out on my endeavor, but at the end of the day there is no substitute for experience.
Here are some things I picked up along the way...
#1: Don’t be overconfident
There was an app like mine in the market already. I had never heard of it, nor had anyone I talked to. They had a few thousand followers on Instagram, and had booths at a few events.
My first reaction was, I’m not them. They aren’t working because they are doing something wrong, and that I am better and I am not going to do that.
But I did not stop to think of what "that" might be.
Flash forward eight months and a single transaction through my app, and I came to the realization that the market is simply not ready for an app like mine (ours).
It is too complex of a solution for the market. The market does want a better way of finding service providers and arranging their jobs, but they did not want an app. I found that people still wanted a belly-to-belly transaction and preferred texting me directly to quote and coordinate the jobs.
What I would have done differently:
If a start-up was similar to yours but failed, or is fledgling, learn as much about it as possible. Do this from the micro level, or in your market, and the macro level, a startup similar in another market or country.
Meet the team, meet the founders, meet users, listen, listen, listen, and try to pinpoint why it failed.
I was entrepreneurially trigger happy.
I was at a point in my life where I was going to launch a business come hell or high water, regardless of circumstance. Because of this I skipped over the due diligence, or rather did enough to justify moving forward.
Do your due diligence first, really dig deep before you start investing. Especially if your idea is not novel, or the first of it’s kind (I can assure you it probably is not).
Or face the fact that you might end up like me and think you're going to be the first to take an idea to market, and not find out until you're already deep in the development stages (and investing), that someone else is already there...
Furthermore, this is even more applicable if you're taking a product that already has an established market. You need to know what's lacking, and if there really is space, or interest there for your project (or if you can carve it out).
#2: Don’t invest if the market isn’t asking for it
I spent much more money adding features and on operational costs, assuming it was going to make my app and my company more complete, thus more desirable for the user.
But I didn’t have any transactions or user interactions to justify the features.
This is where the principles of the Lean Start-Up by Eric Ries would have helped me substantially. Unfortunately, I did not get my hands on the book until I was over a year into my journey, but it's the first book I think any "would-be entrepreneur" should read.
The principle is simple, release the leanest version of your product to the market, the bare bones, MVP (minimal viable product), and let the market tell you what it wants, and go from there. This way you're playing to the crowd.
If I had known of the principles I could have used the money I spent paying my developers to add the features on marketing and getting the app in the hands of real users. In turn I could have used their real feedback to determine what features or changes needed to be made.
Instead I felt from the very beginning that I had to release my final product to the world. Which in hindsight is absurd.
What I learned:
Launch the damn MVP. Don’t spend money until you have to, not because you think you have to.
#3: Don't underestimate the importance of luck, and be ready to dump it
I recently read a quote in Nassim Nicholas Taleb's Black Swan, that struck me deeply.
“Maximize the serendipity around you.”
This goes against just about all you’ll read in most entrepreneurial books, and against a belief that I held very deeply until just a few months ago. Just about everyone, and every company you read about, are written as tales of valiant efforts. Companies that held their ground and keep fighting to the bitter end, and advise you to do the same. Which only works for their narrative because no one writes books about all the people that held on too long to their ideas or companies that weren't working and ended up sinking with their ships.
I had the opportunity to meet an entrepreneur at a meet-up in Philadelphia (shoutout to Michael Marra at Entre for putting the event together), and we were conversing about his projects. He said he launched businesses, and if the market didn’t accept it, he scrapped it immediately and moved on to the next one. This was a novel concept to me at the time, and I was taken aback at how candidly he spoke about dumping his projects.
I empathize that this can be very difficult because maybe you’re emotionally attached to your business, or you feel like you’ve put in too much time, effort, or money into the project to just simply dump it.
I remind you that this is the very definition the sunk-cost fallacy.
The idea that your decisions are tainted by the emotional investments you accumulate, and the more you invest in something the harder it becomes to abandon it.
I remind you that this is okay, and it’s important to remember we are human, with human intuitions. But like with all human biases and often-skewed heuristics you need to be self-aware and to recognize you’re feeling this way. Accept that you’re business is not producing the desired outcome, take the lessons you've learned and move on.
Or else accept the fact that you’re going to keep dumping money into a sinking ship, and that abandoning the ship while you can, will actually save you money in the long run.
This is money that you could have been using to start your next project.
What I’ve concluded from all this:
To hedge your entrepreneurial bets, create and design your business(es) from the very beginning in such a way that, if not accepted right away by the market, it can survive on it’s own with little, to no attention or financial backing, through automation, outsourcing, and ensuring that it is as cost effective as possible (to name a few).
This way if you’re too early to market you can “stick around” until it does, while you focus on your next project.
It also allows you some leeway so you don’t have to “dump” your project in the trash, but rather just keep it on the mantle until you need it (if you ever need it).
Matt Mullenweg the CEO of Automattic and founder of WordPress said something on the Tim Ferriss Show that stood out to me and provided a deep sense of perspective to my entrepreneurial journey. I share it in hopes that it does the same for you:
"...if ten businesses were started today, nine of them would fail. By the way, including if I did them. So it’s not how many times you fall, it’s how many times you get back up is really key."
This is a man who's company is worth $1.3 billion dollars recognizing that the statistics apply to everyone, and no one is above them, even him.
Within this lies the beauty of entrepreneurship, and what I believe attracts us to it: no rules, no holds barred, pure blank slates, for everyone. It's anyone's game, and the only way to better your odds is by increasing how many times you bet. So keep at it, keep learning, keep striving, and keep maximizing the serendipity around you.