Why my VC funded startup failed
codemonkeyism.com
codemonkeyism.com
I've been getting better at this as I have started to focus more on the marketing/business aspect of things. As much as I have learned in the past couple of months, with regards to the business side of things, I can't seem to shake the mentality of "it's just not good enough yet".
I may have a point though, as I will be competing against in house solutions, so I really have to come at them with a compelling reason to use my solution.
I guess the good news is in the next couple of months, I'll have the opportunity to be more formally educated on the business side of things.
It will save your startup. And no, I don't get a dime from your click but yes, I am going to buy 10 copies right now so I can have 3 in my bag to sell at cost to anyone that asks, wherever I go.
At first your goal is to define your assumptions, test them with potential customers and gather facts. Next integrate the facts into your product development. Continue verifying your product and business with customers, start your sales and go-to-market activities. Last, if you're successful, scale your company.
I read a lot business literature and Steve Blank's book is exceptional in way that it makes sense and offers you a path to walk on. For quick reference see http://www.slideshare.net/venturehacks/customer-development-... and http://steveblank.com/
Most of the existing product development literature fails to address the fact that most startups fail because they build something their customers don't want to buy.
He says "essentially the same" and then indicates it was actually a great deal more complicated.
The hard part is not deciding what to do. It's deciding what NOT to do.
I can't seem to find any image or screenshots of the actual site (it appears to have been prodata.de) so I can decide if "no product clue" should be added to the list.
Another example is that the earlier generations of bookmarking sites (which included Backflip and HotLinks among others) overlooked the massive-potential of delicious-style tagging and public link-sharing-flows. They were hung up in, among other things, a model of categories/folders/outlines, and explicitly-created interest groups.
The rational strategy is not to try to discover some 'success recipe' (there is none), but to do a lot of tinkering, be prepared for many false starts, and make sure that the unavoidable failures will not kill you as an entrepreneur.
Sell either to the people at the very top for a high price, or sell to the actual users inside the enterprise for a price (and using a deployment model) they don't need approval for.
But timing really is everything and if your timing is off the rest does not matter.
The salesperson might be the CEO, the VP of Marketing, or even an outgoing CTO - but each and every day, someone needs to be chasing down a source of revenue, talking to customers, and figuring out how, one day, the company is actually going to make revenue - and feed that information back into whoever your "product manager" is.
If you wait for year two or three, after you've built a great technology, it may be too late to discover that your customer doesn't want to buy what you've been building.
Look at the way a typical company runs. They spend huge sums of money on third-rate products, many of which have a superior alternative available. Why didn't they buy the better product? Why do vendors with clearly inferior products get the sales dollars that a vendor with a better product doesn't? It's because the vendor with a good sales team gets the product to the customer, and the fact is that a mind-blowing offering will not get bought unless there's some guy getting that customer to buy that product. If you can combine a fantastic product with a great sales team, watch out. But if you've got a great product but aren't selling early, don't look for a technical solution out of a business problem.
The hard part is finding a sales person who also truly believes in your product and gels with the team. I have worked with some awful sales people, who even when they sell can be terrible for your company (often selling the wrong thing). The first sales person in your organisation, I believe, should not be paid commission, but be paid just like the rest of the founders and have a long term interest in the company.
Lots of money gets thrown at projects that are doomed to fail. They give the industry a bad name.
They are a typical example of the pendulum in action, it never stops in the middle, it always swings through to one side or the other. Either everybody and their dog seems to be able to get funding or nobody. There is never a long time when investors seem to have a cool head and a steady hand.
In written text I find it a lot harder than in spoken word.