9 Lessons I Learnt From My First Failed Startup- with Melanie Haselmayr
[bctt tweet=””There are no secrets to success. It is the result of preparation, hard work, and learning from failure.” – Colin Powell”]
According to investopedia, a startup is a young company that is just beginning to develop. Steve Blank defined a startup as a temporary organization used to search for a repeatable and scalable business model. The number one goal of every startup is to become a large business or to fail and move on to another opportunity.
Also, startups searches for an unknown business model in order to disrupt existing markets or even create new ones. A startup is best explained by Eric Ries as a human institution designed to deliver a new product or service under conditions of extreme uncertainty.
Melanie Haselmayr is an Austrian born writer whose passion is to think about business and develop ideas into stellar concepts. She has written several articles on Forbes, Smashing Magazine, Business2Community, Under30CEO, Refreshingly Transparent and has provided answers several questions on Quora.
She has lived/worked in 10 countries in over four continents and industries. She is also a polyglot (proficient in 6 languages and still counting).
For her age, she has a vast experience in industries ranging from hotels & restaurant, event & wedding planning to marketing & communication. She writes about her passion on her blog and her massive resume is on her LinkedIn profile.
9 Lessons I Learnt From My First Failed Startup with Melanie Haselmayr
In August 2011, Mel founded Mevvy, an App discovery platform for Android, iOS and Windows. Mevvy is also an App ecosystem with unified API for all the major app stores on the market.
Mevvy helps you discover the best apps and tools that fit your professional and personal life. I came across Mevvy this year and wanted to know more about this awesome App discovery platform but she told me that Mevvy is “dead”.
Albeit, she volunteered to share the 9 lessons she learnt from Mevvy, her first failed startup with me. You are free to ask any questions in the comments section as you read along.
- NEVER ENTER TECH WITHOUT A TECH-SAVVY CO-FOUNDER
If you are going to be in tech, you need a tech-savvy co-founder on your side – someone who understands the technical aspects, and who can build an MVP (minimum viable product, I’ll explain later) on his own and therefore set the first stone to making a great company.
Outsourcing is possible, but only if technology is a side-product of your actual product, i.e. if you are a restaurant and want a mobile app for your customers to use. If tech is the heart of your business, hence it needs to be treated in-house at all times.
- SPECIALIZE IN A SPECIFIC TARGET GROUP, NOT JUST “EVERYBODY”
When we first started Mevvy, we thought we were targeting everybody, hence the screen cleaner street marketing campaign. Everyone who walked by could have been a potential user. It doesn’t work this way.
The more specific you are about your users, the more likely you will meet people who will actually become your users. Let me explain: if you target 20-25 year old males, who are studying IT in x universities, you have a clear image of a person.
You can find places where to meet this person, and tell him about your product (that is specifically adapted to them, see lesson 6).
- IT’S BETTER TO RULE 50% OF A SMALL MARKET THAN 0.5% OF A HUGE MARKET
It is not about how big your market is today, but how big it can grow. This is a very recent development: you no longer seek out to rule a huge market that has x million users, you seek out a niche.
When you pick a niche, you choose one that is going to grow, not stay or shrink, hence you’ll grow along. You seek out a small group of people instead, and build something that fits the exact need of that small niche.
You can always expand sideways (i.e. we started with apps for students, and then expanded into apps for professors) to grow your spectrum. But, first, it’s important to rule one niche. It’s worth so much more, as only the big companies like Facebook and Google can afford to go after a huge market with full speed.
- NEVER JUST ASSUME ANYTHING
This is one of the most common things startups do. We assume things. We assume that people will need x. We assume that they’ll love our solution y. We assume they’ll pay for it because it’s just great.
Your intent is to fill a need that your target audience has; but it doesn’t mean that they see it the way you do. You see, every business idea starts out with an assumption, a hypothesis, some sort of statement that presumes that the market will do one or the other.
“Customers will sign up for $x because of the huge value of our product”
“Users will see the value and become loyal customers”
“Our product will grow at x rate over the next x years”
You cannot do this. You cannot think that you know what your opposite thinks. You can’t even survey the market and say “would you …” It’s a fictitious scenario.
It hasn’t happened yet. People might say they’ll love to do x, but they never will because when the day actually comes, they have no interest in doing what you had proposed to them.
My point is: if you come up with a hypothesis, you need to validate it, and prove that it’s right. The only way to do this is by going out, speaking to users, asking them about their previous experience with the problem you are solving, and showing them how your solution can fix it. That’s the only way to eliminate doubts
- DON’T USE PAID ADVERTISING TO VALIDATE AN IDEA, BUT USER OPINIONS
Paid advertising is a really bad idea to validate an idea. Potential users are a much better gauge of what is possible, accepted and chargeable. If you follow the steps in point 4, you can get a good picture of what people like and don’t like.
- NEVER BUILD A PRODUCT BEHIND CLOSED DOORS, BUT WITH USERS
After all I have done, this point is so obvious, and yet so obscure. When doing startups, you somehow have to work against your instincts which tells you to shelter your idea until the launch because you fear being exposed and someone stealing your stuff.
Building a product with your users means that you are building something your users will actually love. This is so crucial. Often, we believe that people will love what we’re building, we are convinced of it, but it is not like that.
I actually heard someone saying that if you get this right (build something users love), you can get everything else wrong, and most likely still succeed because you’ve nailed the single most important thing.
- REFRAIN FROM HAVING A STATIC PRODUCT
This point is closely related to the point before. Have a co-founder on the team that is technically capable, dynamic, can move boxes on the site, can change text, and can move and remove features as you need them fairly quickly.
That’s what agile product development is, and you can use a tool like blossom.co to make it happen.
- HAVE A SOLID BUSINESS MODEL FROM DAY 1
Besides the technical co-founder, and building a product users love, this is the most important factor: money. You’re not doing this for fun, or for prestige, you’re looking to make a return.
These days, it’s getting more and more difficult to get user attention to your platform. User accounts are essential, but can’t guarantee that people will come back (a product that users love, does!).
The best way to build a solid monetization strategy is to aim for an exchange of product and money. Subscription models work best, and guarantee continuous income. Advertising is very risky and a lengthy process as it requires a lot of work beforehand without any clear outcome.
- BOOTSTRAP AS LONG AS YOU CAN
So, summing up, having a technical co-founder can reduce your cost by a lot, provided you find someone who believes in the mission as much as you do, and is willing to work together with you.
Going by the lean startup model helps tremendously in bootstrapping, because it saves you from investing time & money in development and guides you to validate your ideas before you actually get going with development.
Once you have validated your idea, you are building a product together with you core users’ feedback, this is still not the time to let go of bootstrapping.
Now is the time to focus on user retention – make sure people stick, and come back. Once that is achieved, you can let go off your bootstrapping strategy, and shoot for the stars.
In my world, I saw app discovery going into this amazing direction where you would receive contextual app recommendations. Let’s say you flew from London to New York, a Siri-like assistant would recognize where you are, and recommend the subway app, cab app or any other transportation app to get around.
Then, at your meeting, it reminds you that your wife’s birthday is in 5 days, and that you should send flowers home, since you won’t be there (the calendar is linked), and it suggests some flower delivery apps to use. You see?
But this is not possible as a small-scale company. Even if you were to figure out the technology, Apple might not accept your app, Google might not like you either, and if you miraculously do manage to gain a substantial user base (despite the fact that we only download a new app every so often), then you would have to fight these 2 giants.
In summary, there are four key ingredients to have as a startup:
- Solve a real problem (or fill a real need).
- Have a team that has the core competencies
- Target a specific niche and target audience
- Know your monetization plan from day 1
These are the 4 key ingredients. If you’re missing one, you’re done.
The reason why I wasn’t able to save Mevvy, despite all this wisdom, is because we had gone so deep in one direction and we were unable to find a monetization model, which would have worked from the start. This fact has forced me to make the decision to let things go.
PS: If you need someone to handle your content/content strategy, write for you or you simply need someone to manage your blog or website, you can hire me for the best services.