Recently, I came across an interesting LinkedIn post by a prominent Angel Investor who contemplated if there was a list of failed startups as it will help a lot of prospective entrepreneurs. After all, as Denis Waitley rightly said, “There are no mistakes or failures, only lessons.” Here is my list.
Lesson 1: Don’t undersell yourself
At one of my previous startups, I accepted one fourth equity while my ‘best friend’ took three fourth. Why? Because, it was his idea. The idea that was neither unique nor first to market. When I realised that I deserved more and demanded more sweat equity, things got ugly. However, at my current startup, I had offered him equal equity (of course he didn’t accept as ‘his hands were full’).
Lesson 2: There is no such thing as a perfect product
My then co-founder was and still is obsessed with his idea and lives in an Utopian world where perfect products exist. That’s exactly why we never launched the product because (like Waiting for Godot) we kept waiting and waiting for the perfect product. To not repeat the same mistake again, we launched with a demo website at my current startup and used Facebook events to get bookings.
Lesson 3: Freemium model is dead
When we started off, we were working on a freemium model where the basic app will be free (with targetted ads of course) but to remove the ads and to use premium features, the users will have to loosen their purse strings. But as we progressed we knew it in our hearts that we needed fresh revenue streams.
Lesson 4: It is just common sense to bootstrap
We spent (gulp!) 16000 INR on a font. That’s a luxury no startup can afford (self-funded or not). That’s exactly why, we have been penny-wise since day 1 at my current startup.
Lesson 5: It is never too early to start making money
Until the first customer pays you her/his hard-earned money, you don’t have a validation or market. You might be delusional and over-protective about your so called idea. At my current startup, we initially accepted payments through Paytm (because we didn’t have a bank account) but every single sale was a major win for us.
Lesson 6: Go where your market is
Yes, there are several advantages when you incorporate a company in foreign waters. However, it is suicidal to run a startup from India when your customers, stakeholders, the entire f**king market is away.
Lesson 7: It is vital to have the same energy levels
This may sound trivial, but, trust me it makes a world of difference. The last thing you want is a man-child who needs a push every other day.
Lesson 8: Execution beats idea every single time
As an ex-copywriter and ad-guy it pains me to say this, but, ideas are (sigh!) dime a dozen. A good idea needs great execution and so does a terrible sounding idea.
That’s all folks! For now at least. I would love to know your thoughts.