Two Startups in 9 Months: Lessons Learned as a Technical Co-Founder
The past few months, I’ve worked on a half-dozen side projects that were web-based applications. Two of them were even so big that I formed an LLC with my co-conspirators, did some marketing and tried my hand at a few sales, and even looked at raising a bit of money.
The first product was a social network where students could share outfits and fashion ideas [archive].
The second was a music distribution service for artists that want to tap into how listener behavior has shifted to blogs and free downloads [archive].
Unfortunately, as of this writing, both startups are no longer functioning.
While I was mostly on the technical side of things, I learned a ton of business lessons about startups that I wanted to share.
You’re Probably Over Engineering It
It’s good to read articles about how Facebook and Netflix and Reddit solve their scaling and hosting challenges. It’s bad to think those lessons apply to your startup.
When you’re constantly devouring those articles on Hacker News, it’s easy to get caught up in architecting some super-advanced system. When we were building the music distribution service, I came up with this elaborate architecture that required multiple technologies and instances and CNAMEs:
I built up all this complexity, and ended up stripping it back to two ec2 micros and an s3 bucket, which held up just fine. A simple stack will get you surprisingly far.
We did start to grow traffic to the point where scale became a sporadic issue, but the problems were always bugs in my code that I hadn’t anticipated. A complex hosting environment wouldn’t have helped, and would probably have made issues harder to debug.
You ain’t gunna need it. Plus, if you get to the point where scaling your infrastructure really becomes an issue, you’ll probably have gotten some money which you can use to hire someone smarter than yourself to fix it.
Always be Validating Your Idea
The basic premise behind validation is that you shouldn’t waste time building something that nobody wants. It sounds simple enough, but it’s easy to get caught up in the excitement of building something and end up doing a poor job on validation.
Find Strangers to Validate Your Idea
Both startups began essentially the same way – first there was an intriguing idea, then we kicked it around for a few weeks, and finally decided it had enough promise to dive in and start building. Fast forward a few month and all we had was a big pile of code and no customers to show for it.
How could this happen! we thought. We did customer validation: our friends all said they loved the idea! Wasn’t that enough?
In hind sight, it’s obvious that I made two key mistakes, both times:
- Our friends weren't our target customers.
- Our friends didn't really understand what the fuck we were doing so they'd just smile and nod to make us feel better.
The takeaway from these mistakes is that you need to find people outside your friends and family that actually like your idea.
Find People Who Need Your Product
Which brings me to the next point. Validation doesn’t mean that people “like” your idea. People, even strangers, will usually say they like it because it’d be rude to say otherwise.
You want people who need your idea. People who need it so much they’re willing to put up with downtime and a bad UI and constantly changing features and all the other issues that nascent products often face.
Paul Graham says it well in an essay called How to Get Startup Ideas:
When a startup launches, there have to be at least some users who really need what they’re making—not just people who could see themselves using it one day, but who want it urgently.
Usually this initial group of users is small, for the simple reason that if there were something that large numbers of people urgently needed and that could be built with the amount of effort a startup usually puts into a version one, it would probably already exist.
Which means you have to compromise on one dimension: you can either build something a large number of people want a small amount, or something a small number of people want a large amount. Choose the latter. Not all ideas of that type are good startup ideas, but nearly all good startup ideas are of that type.
Even if we had looked a little further outside our friend group, we should have noticed the lack of raving fanatics. If people are kinda “meh” on your idea, you’re going to have a hard time getting them to pay you for it. Find someone who wants to put their money where their mouth is before you consider the idea totally validated.
Selling is Really Hard
Until recently, sales always seemed like an unnecessary soft skill. If I had a strong product, customers would find me. If you build it, they will come. The product sells itself. How hard could it be?
While I was spending my time thinking about features and implementation, I got bogged down in the messy details. Certain things didn’t work out how I thought they would. I found myself making arbitrary deicions cause I didn’t have enough data to go off of. Once we had a few users, it seemed like they were always finding new bugs or turning up edge cases I hadn’t planned for.
As a result, most of the time both products felt like sloppy, creaky messes full of mistakes and bugs just waiting to fall over. I was embarrassed to ask for money for them.
I found solace in the fact that this is a rather common phenomenon for startups to be in. Reid Hoffman (LinkedIn co-founder) famously said:
Reid Hoffman: “If you’re not embarrassed by your first product release, you released too late.” #PandoMonthly
— PandoDaily (@PandoDaily) August 10, 2012
And while it is comforting to know that other entrepreneurs have felt the same way, no one mentions how hard it makes it to actually sell the damn thing you’re building.
Seeing how messy and haphazard the prototype of a product is makes it almost impossible to sell. If you’re the one making sausage, you probably shouldn’t be the one selling it.
Benefits vs Features
It’s really easy to fall into the mindset that your product is simply a bundle of features. After all, that’s how you’re building it – going down the list of things you need for your first prototype.
But features don’t sell a product, benefits do. Unfortunately, you don’t built benefits, you build features. Hence the disconnect.
At one point, I typed up a one-page summary of all the features we had built or were planning to build (mostly the latter) and sent it off to a hot prospect. She was the CEO of a music label whom I knew personally. She was excited about our idea and had asked for a proposal before she started getting all of her artists using our product. We figured it’d be a layup sale.
She said no. In retrospect, sending someone a one-page list of features and expecting that to convince them to spend hundreds of dollars a month on our service seems extremely naïve.
Selling is now a skill I hope to work on this coming year.
Startup Incubators are Like College
You can waste a ton of time filling out paperwork and applying to them or you can focus on getting shit done. If you get into a top tier one, it will add to your brand and look good on a resume, which helps people take you seriously. But other than that, they’re mostly useless.
Everyone seems to think they’re a good idea even though most have questionable value. But, if you’re good, you probably don’t need to waste your time in one. :)
I built that extended metaphor after applying and failing to get into Mass Challenge for the first startup. Actually filling out the applications was a good experience since it forced us to think about a lot of questions we hadn’t directly answered yet.
But the application process took up several days that would’ve been better spent working on the product and talking to potential customers (did I mention how important validation is?). We should have waited till we had more traction before applying. There probably would have been more value for us if we had a clearer sense of what we really needed.
I don’t think I’d do it again.
My New Year’s Resolution for 2013 is actually “no new startups.” I want to commit more time to working with and learning from great people this year, so that I can hopefully raise my batting average and take another swing in 2014.
If you have an idea, here’s what you need to know to get started.
PS: I’m also planning on spending this year finishing up Marketing for Hackers, a step-by-step guide to turn your weekend project into paying customers, which you should check out right now.