Lessons I learnt from failing at my first startupGuest Author
After almost two years of operations, I recently decided to shut down my first startup. What went wrong and what mistakes were made are important to understand, but equally important is to take forth those lessons into future ventures. Here is a short summary of the lessons I have learnt:
Focus on the product
My role in the organisation was that of a sales and finance champion. Though it was a technology-intensive startup, I figured that I would be able to outsource to a competent vendor who would take care of everything. I cannot stress enough the importance of having a CTO on board who not only is as competent but also as passionate about the product as you are. This is especially relevant if you are running a tech startup. After all, a vendor is just a vendor.
Set employee expectations
You may get funding and try to scale up quickly. Your initial recruits are going to be crucial at such a time. Make sure they understand the risks and rewards of working in a startup environment. If they think they are working in a large corporate and expect the same levels of job security, they are more likely to be disappointed in case of failure, and less likely to put in the extra effort usually required in a startup environment.
Don’t spend too much time behind funding
No doubt, funding is important at some point. But the endeavour to get funding should not distract you to the point that you forget to focus on the product. I spent so much time behind funding that when I did see investor interest, I realised that my product was way behind schedule, which eventually resulted in the investor losing interest.
Fit people in the organisation, not the other way round.
There is always a temptation to build a core team of people who are friends, or who you know from your previous company. Doing so may result in the recruitment of someone who isn’t a good fit for the role. The fact that you trust that person subconsciously becomes more important that his or her skill set.
Continue bootstrapping even after getting funding
I have seen many startups spend money very freely after getting funding. No doubt, the funding should facilitate better manpower, investment in technology and what not. But a nice car for the founder can still wait. Frivolous expenses not only weaken the company, they also attract negative press in case of eventual failure.
Be flexible on strategy
One of the advantages of running startups is that it is easier to change course than it is for a large organisation. Stay alert on the market and economic landscape and be open to doing something that wasn’t part of the original plan. It may just save your company.
Know when to call it quits
Founders routinely become emotionally attached to their startups, especially if it is their first one. Be practical. If you see that things are becoming unsustainable, or that customer interest isn’t shaping up as expected, take that difficult call and shut down the business. You may be able to prevent greater damage.
About the Author:
Aditya Mehta is a Mumbai-based stock market boy, entrepreneur and an Executive MBA Candidate at the London Business School. He is currently involved with Edgytal, a digital marketing company, and TipStop, a fintech mobile app.