Admit Your Failures
To everyone that has ever failed and had the audacity to admit it. — Authors of The Real Startup Book
I’ve been servicing the startup community for the last 10 years. Throughout that time, I discovered the Lean Startup movement and have slowly evolved to embrace it and help my customers find success through this approach. I’ve seen this meme recently in my social media stream that it is cathartic to admit to your failures. Here goes …
I have had several pre-viable experiences with startups that led to a couple of failures that were all my own.
Recognize Business Model Failure
I joined a startup after their business model failed, the person who knew how to do the startup thing, recognised it but couldn’t refocus his partners. He ended up leaving and the remaining leadership team was in a desperate struggle to find a way to market the valuable resources and relationships they had developed.
False Lesson: Startups mean 300-hour months to make your product better.
Deeper lesson: After reflecting on my new lean startup perspective — recognise business model failure for what it is and pivot, don’t keep riding the same horse into the ground.
Investment isn’t product market validation
I spent many years with the ultimate startup zombie. Get this: I joined them after IPO but pre-solution problem fit. I was with them as they scaled too early with every new round of funding, where the leadership team randomly threw products out into the marketplace with the hope that one would stick.
False lesson: Receiving financing is success.
Deeper lesson: Landing investment dollars, even something big, like a successful IPO, isn’t market validation of your business model.
Corollary from both of my early experiences, subsequent investments in a startup zombie may have more to do with milking the previous investment vehicle then further validation of the underlying business.
I’m reminded about this startup daily because a fellow traveler in this space had a half-billion dollar exit and their product is now integrated in devices that billions of people (including myself) use constantly.
False Lessons Killed My First Startup
I was an early purchaser of a prosumer DLSR. I took some amazing action sports photos, and got lots of positive feedback. Foolishly, I decided that there was a business there. I created a flashy business plan with amazing financial projections. With it, I convinced myself to invest a significant portion of my home equity into the project. GaltPhoto was born! I designed a logo, built a website, connected it to one of the burgeoning photo fulfilment services, and bought lots of even more expensive photo equipment.
However, anyone who could rub a couple of grand together could take those amazing shots and distribute them through the same services. Many people did just that and were happy to do it as a hobby. No amount of hard work or further investment could compete with that.
False Lesson: I’m not good at startups and should give up.
Deeper Lesson: My previous experiences with startups were terrible examples. I can find better ones, and I can learn how.
Lean Startup Offers Me Hope
I consider my experience with Snocoach, CRM for Ski Instructors, a successful use of the lean startup approach, although not a successful startup.
The first hypothesis I tested was “Could I attract ski instructors through a content marketing campaign?” The short answer was I could, but with more expense than I could imagine the lifetime value of my customer. I couldn’t make it up in volume because too few ski instructors actually wanted to operate more like a business.
I would like to hear the hard lessons you have learned from your startup experience. As I’ve been reading on Facebook, it’s quite cathartic!