I've seen startup success and I've seen startup failures. Success has many fathers, but failure is an orphan. No one wants to admit that they were a part of failure. I've been in two successes, and I've been in some failures, and consulted to some flailing startups that went and failed. I want to touch base on what I think creates the majority of startup failures.
First, let's talk about success. I never talk about the successes, but that stops today.
- MarketLinx. MarketLinx is long gone, but here are the memories of it. MarketLinx was a startup driven by David Bolt, Phil Graves, and Doyle Hodge. I want to be clear that I wasn't a driving force there. It was early in my career, and I was just trying to move up in the world. I watched and learned a lot from them. Sure, I learned a lot about technology, but I also learned a lot about what it takes to make startups work. You need to be out there talking to customers all of the time. You need to think forward in what is happening and what you need to do to make things work going forward. We continually asked the question regarding what did customers want, what did customers need, what did customers want to add value to their lives, businesses, etc. How could we automate various processes that happen in real estate? What can we do to make the lives of customers better?
- Popular Categories. Have you ever mistyped a domain name? Yeah, you might end up where you don't necessary want to be with options to click on links. I wrote the whole back and front end for that. Not a team of developers, just me. PC was actually in the top 5 of internet search engines at one time; iirc, we topped out at #3. Sure, there are people that make mistakes, and I've got some stories from it. However, the key thing is that it was successful. We spent a lot of time measuring what was being successful and what wasn't.
In 2006-8, I spent time with a startup that ended up being an exercise in lighting cash on fire. I did user interviews and figured out what users actually wanted. Try getting anyone from the engineering gene pool to talk to actual users. It was not a whole lot of different changes necessary, but it would require some changes, aka pivots. However, not listening to users and one cofounder trying to belittle every one that disagreed was just crazy.
In 2012, I dealt with a startup that was in the fashion space. The people that were running it really didn't understand how to do a startup. There were all kinds of weird things that they would do. They wasted their money with a development company and had nothing that worked while wasting all of their cash. They needed to gain focus and insert cash into the startup. Given that one of the founders had access to millions. Trying to do everything on the cheap was dumb. It just chased everyone off.
On again and off again startup 2013 to 2015 that wanted to do things with bluetooth and digital displays. It didn't make the most sense, but it sounded interesting. Talking to users matters. Building an MVP matters. No, everything doesn't have to be perfect. Don't hire 15 people before you generate income. I don't care how good of a salesman you think you. There are general rules regarding things like runway and MVPs that matter.
I've worked with some other startups, but I think we are seeing a pattern. The basic lessons of success and failure are:
- Listening to the marketplace matters. Build something that users want and someone will pay for.
- Cofounder disputes are killers. Everyone hating on each other, or just creating enough where trust is lost can be a real deal killer with startups.
- You are not immune to the general rules of startups. 99% means 99%.
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