7 Lessons I've Learned from a Failed Startup
Dave's original article can be found here.
To introduce myself, I've been the co-founder of a startup that FAILED…and I am extremely proud of it.
It pushed me so much further than I could have ever imagined. The lessons that I learned were invaluable and priceless. I'd like to share my startup experience with you.
My Startup Experience
First off, I had THREE jobs. Yes, three. Why? At that time, I had only begun to consult in a professional capacity. And as many of you know, it takes time to get your name out there, so I needed to supplement my income by means of a second job. A job as night auditor at a local hotel to be exact. Quite a switch from working for a Fortune 500 company.
Here's what an average day looked like for me:
7am: Arrive home and go to sleep.
12pm: Wake up and have lunch
1pm to 9pm: Startup work, consulting, bookkeeping, prospecting for new business
9pm to 10pm: Power nap
10pm to 11pm: Get ready and drive to work
11pm to 7am: Night Audit
Then the cycle began all over again. I did this for 7 months straight. And the fatigue alone nearly killed me. Literally. BUT....I don't regret a minute of it. See, a failure can be worth so much more than a success. When you fail, it forces you to ask the hard questions. Why did it fail? Did I not try hard enough? Did I not do my homework? Wrong timing? You’re forced to face reality, to re-evaluate yourself, your priorities, your reasons, and your motivations. And the best of all, it teaches you what not to do in your next startup.
Here are seven of the many lessons that I've learned though my this startup experience:
1) Never Assume, Always Test and Validate
This is so important. You need to validate whether your product or service solves a real pain point or problem for your customer segments. And in the beginning, everything you believe of your business idea is an assumption (Ex: your customers, your product, your market size, etc). Don’t let your bias blind you. Find out if someone is willing to pay for your solution.
Learn how to test this prior to building your product. Avoid wasting a large amount of cash on an idea that will never sell.
When we launched our startup, we did none of the above. We assumed the market we were targeting because we thought it was impossible to validate. Instead we launched with the hopes of validating as we went along. Bad idea.
2) A Good Co-founder is Worth Their Weight in GOLD
Having the right co-founder is extremely important. My co-founder was an excellent complement and the voice of reason. There were days where I wanted to throw in the towel, and he helped me stick with it. There's a bond that happens. In most cases you can be brutally honest with each other and they won't judge you.
3) Always Have a Technical Co-Founder/Equity Partner
Trust me, it’s so much harder to get things done when you don't have someone on your team capable of handling the software development. Fortunately, we managed to secure an excellent developer for awhile, but not having a developer as part of the team really held us back.
4) You Are MUCH More Resilient Than You Think
Had someone told me I was going to work a night audit job, get 4 hours sleep a day, be a consultant, and run a startup, I would have told them that they were crazy. I knew I was resilient, but this really pushed me to the next level. NEVER underestimate your capabilities.
5) Never Be Afraid to Call Yourself a Startup
For some reason when we launched, we didn't want to be labeled as a startup. We thought if we called ourselves a startup we'd be perceived as less reputable. What we failed to see was the enormous amount of support and programs available for startups, such the Venn Garage.
6) Don’t Be Afraid to Ask for Help
When you're in a situation or scenario, don't be afraid to ask others for help. Just make sure that those you turn to have "earned" experience and have lived through a similar scenario. In other words, don't simply turn to your family and friends for advice. Most often you’ll get watered-down advice simply because they love and support you, and most likely don't want to hurt your feelings.
As well, when it feels like everything’s about to fall part, it's not.
7) "Brick and Mortar" Products Can Sink Your Startup
When we launched, we bought products that we "thought" our customer segments wanted, and it was expensive. Only buy products to sell if you've properly validated that your market is willing to pay for it. And make sure that it's profitable.
So, my question to you is: Have you ever failed in business? What lessons did you learn from it?
PS: In case you’re wondering, my first startup was called PickMyPlace. It was a real estate property marketplace and industry professional network. Best example I can think of would be Bigger Pockets with a marketplace for rentals.