Entrepreneur: “3 mistakes that killed my startup”
Estonian entrepreneur Andras Purde wrote a blog about shutting down his startup Achoo. Achoo was a place to ‘celebrate achievements’ – the user interface looks vaguely reminiscent of Pinterest, with small “status updates” celebrating things like
“@Michelle_Mazur survived her first year of blogging (and shared her lessons in a blog post)”
After 18 months, says Purde, it’s time to put Achoo to bed. Here are the three mistakes he regrets: “We made many popular startup mistakes but if I had to pick one I’d say the main reason we failed was that our servers kept crashing under the load. I wish:)”
1. “We should have worked full time on our startup idea”
Andras and his team thought they could pull Achoo off while not working full time on their startup. This had important disadvantages, he writes: too many of the many, many hours he spent on working on Achoo were evening hours, working alone, away from the team.
Andras: “All team members had other commitments of various levels, and our thinking was to moonlight until first signs of traction, and then go full time. Sounded good on paper, but this setup slowed us down and mostly working in Skype chats and Google docs limited our creativity. On a different level co-founders are also co-believers and if the team is not there for each other emotionally, you won’t get the 101% output necessary to bring a world-changing idea to life.”
European startup founders are a lot more likely than Silicon Valley entrepreneurs to do their startup as a side project, or to take on consultancy projects as a side project, a recent Genome Startup study found. Of course, there are reasons for this, like the lower amounts of funding that European startups can raise.
But Andras’ story clearly shows the dangers involved here: it’s easy to become discouraged when you’re working on your idea alone, at night, after a long day of other professional obligations.
2. “We didn’t test our idea”
I recently interviewed Adeo Ressi of the Founder Institute. The biggest, gravest mistake founders make, he said, was that sometimes they would just sit on their idea, or brood on it – foster it, think about it, tinker with it, without ever actually talking about it to the target customers.
Ressi said: of course it’s possible that someone will pay you for the service you’re dreaming up, but how about dispelling the uncertainty by just asking them?
This, says Andras Purde, is exactly the mistake Achoo made: “I fell in love with the idea rather than followed the process of getting user feedback before starting to build. Our comprehensive piece of market research was a month after our public beta launch, not before. And while I talked to lots of people about Achoo, I didn’t do enough of talking to our target group.”
3. “We lacked focus”
The third mistake is a classical one that entrepreneurs make: lack of focus on a specific target demographic.
Andras Purde: “We had freelancers in mind but we also wanted to target a couple of other types (“let’s throw some spaghetti on the wall and see what sticks”), and so we never properly penetrated any one target group. Which is not how you grow a social product.”
This is the worst way to build a customer base. I think every startup founder should read “Crossing the chasm” by Geoffrey Moore. It’s a 1990′s marketing book about high tech, but it’s still extremely relevant today.
Moore basically says: if your customers aren’t talking to each other, that means you’re not in a market. What he means is that you should target a segment that is big enough for you to make a living from, but small enough that getting one customer will attract the attention of other customers.
Moore calls this a beachhead. Your goal shouldn’t be to try to invade France, he says. Your goal should be to storm a beach and occupy it. From there, you can regroup, add resources to take over France.
Remember Facebook? Facebook started targeting one specific target demographic: Harvard students. They all talked to each other about this crazy new website that went up. After that, Zuckerberg added other universities, who had heard from friends at Harvard about the website. Then, he added high schools – because high schoolers want to be like college students, they had already heard about this closed network, that they were itching to get on. And so on. Every time, Facebook could hop to a new market, but from the safety of an established beachhead.
Next up for Andras Purde? He doesn’t know yet. He knows this: ”I won’t be hoping to be the exception whose idea doesn’t need validation before building and I’ll work in a motivated team.”
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