What did I do wrong in my first startup?
What didn't I do wrong!
I probably did more wrong than right, but I got out the other side with some skills, earning power and am able to tell the tale.
I'll take the hard earned lessons with me onto the next one, hopefully executing much more artfully and smartly next time.
So what were the main things I did wrong?
I'd list my main errors like this.
We didn't have enough product and market knowledge
I didn't intelligently enough scope out the size of the markets, the value of it and its potential growth. I also didn't become enough of an overnight product expert, before launching my own into the marketplace either.
Beyond this, I also failed to understand how two large forerunners had ironed out most of the opportunity. Our forerunning competitors were making fees and spread of five times (or more) back in the day and we joined them competing for small margins, only made workable with large volumes; which we never achieved through our fin-tech platform, while I was there at least anyway.
Not understanding the strength of our competitors, their marketing models and customer loyalty was another failing.
It's ok to fast follow - like Rocket Internet - when the time's right.
We followed slow, lured by the values of the leading business in the sector and deployed a product without enough differentiation or virality.
A fool and his money...
We didn't have a strong enough team, with relevant skillsets
This one's pretty simple to explain.
We tried to launch a fin-tech startup, which was a digital investment product.
But, we had no digital marketing skills in the team (at the beginning), our tech was overly outsourced to Latvia and we didn't have a killer product guy either.
If I were an investor, I wouldn't generally back such a team.
We had some strengths, for sure. We had a superb analyst and news desk, creating great content - that probably set the standard in our sector - but it wasn't enough.
How strong is your team? Got great dev, masterful digital marketing and you're your product nailed? If so, good luck - go and kill it!
We didn't hustle hard enough to raise money and meet interested parties
This is another embarrassing one to admit, but we only pitched to 20 odd parties - ranging from angels, financiers, sector-related folks and VCs.
That is not nearly enough if you're serious about raising money. 20 pitches in a two weeks would be better!
Mark Suster has blogged about his 50 coffee meetings rule. He's right on the money and you should read the blog and put his wisdom into effect. This sort of application to meeting people is critical to funding too.
My more senior founder was never keen to hustle and raise funding the typical ways - and perhaps the product wasn't suited to it - but we would have learnt a lot, more quickly and perhaps achieved more perspective on the eventual lack of sweet product-market fit if we had.
I also know, within this mistake, I didn't appreciate the ability to draw on personal cash and savings enough.
Personal liquidity gives you amazing options - use it wisely.
Hopefully I've learnt to appreciate and use this luxury better next time. For now, I better get back to earning...
Our marketing model was too narrow, focused on one channel
Our investment product was mainly distrubuted via organic search in Google, without any other supporting marketing channels driving meaningful acquisitions really.
This was an overly narrow, flawed marketing model.
Not only were we vulnerable to changes in Google's algo (Hummingbird, Panda, Penguin, you name it), but we were fighting for position on page one - where rewards are highly non-linear - with larger competitors, with client bases and lots of customer data and trends to leverage into great content. This content consistently earned high quality links than we could.
We took a pea shooter into a gun fight and even if we nearly made and hung around on the top of page one of Google, the light was not worth the candle.
If you're reading this and your product has greater inherent virality and lots of distribution channels which offer an acceptable cost-per-acquisition, you're already executing more smartly than I did. Nice work.
Next time I want to see search (organic and paid), affiliate, referral, social and others - or a good combination of them - working together to build a more balance, sustainable marketing model.
I didn't worked hard enough at optimising my co-founder relationship
Whilst I moved on from my startup, without bad thoughts for anyone, I could have worked harder to improve and optimise my co-founder relationship.
This relationship was one of the reasons I chose to move on and perhaps I could have never talked, negotiated and empathised it right for me, but I do have a few second thoughts here.
Don't have second thoughts in startups.
Leave it all on the pitch and have more 'yo, bro!' chats if they're needed.
I, and we, were probably too British about it.
Big topics need constant discussion. Talk about them.
Value, contributions, strategy, fund-raising... don't keep your opinions to yourself, when they might add value and be held by others around you too.
I spent too long labouring in an infertile seam
Fail fast. Lean startup. Prove your concept or move on.
These are all (often) very smart startup philosophies.
I didn't know of them at the time (I sure as hell do now!) and spent four years trying to prove a product and model that I should have walked away from after one to two years.
Next time, I'll look to prove a marketing model and product-market fit in a far shorter a time period and be smarter with investment capital to understand if it is or isn't working.
For more on this, read wiser guys than me - Steve Blank is my favourite guru. Check him out here.
Why did I not leave, bait and switch earlier?
Was I too scared to admit failure? Was I too stubborn? Too wedded? Too emotionally all in?
I don't know exactly, but probably a bit of all of them.
Nonetheless, I was fortunate to learn digital strategy with a great mentor and work my way an escape, with lots of opportunity.
Still a great ride though and I'll be back at the table again soon
Whilst my first swing with the startup bat didn't change the much in the great span of human progress (or my life), I still think of it as an overall success.
A qualified success, but definitely a success.
If you manage to leave with skills, a network and new opportunities, you've done ok. You're here to fight another day... and swing for the fences again soon.
Don't go down with the ship. Don't go bankgrupt with it. Be Anti-Fragile and look after that mothership - that's you by the way.
Entrepreneurial success is non-linear.
You can do things 80% right and still fail. Even 90% right and still fail.
That's why I think of my first startup as a great investment of my time and money. I explained this in greater detail in a previous blog.
Here's to being much smarter next time!
Find anything to learn from my errors? Think I missed anything important? What did you do wrong in your startup? Add your thoughts in the commentsSuggest a correction