This is a very personalized story, and it is based on my first startup failure. Even it is very specific and some or most of the circumstances does not apply to you or your startup, I’m sure you will come up smarter than me at the time, after reading this, because at least, I hope you won’t repeat my mistakes.
Introduction to my Startup
I was a Co-Founder at startup for energy trading http://balanciq.com. We tried to build a software for big energy trading companies which can possibly save them some time and reduce errors by automating their manual data entries. But as you continue to read you’ll find out that it failed, and here are the main links in the chain of events and circumstances which caused a crash.
Your environment narrows you
I was not lucky enough to get startup idea while I grew up in some of the famous startup cities like Berlin, Dublin or NY. Instead, I grew up in eastern Europe in the territory known as Balkans. If this geographic name does not mean anything to you anything, don’t worry, I’ll try to explain in short which obstacles I had there. At Balkans, most people are not used to the concept of paying for digital goods, that’s why you can’t come up there with an idea such as Spotify, Netflix, etc. Simply this sort of ideas would never come across your mind because you’re not exposed to the concept. That was exactly the problem I had, I started to develop my platform, with features and specifications I found out at my surrounding. I was briefly aware of broad regulations in Europe but for example, North America, Asia, and other possible markets were huge unknown to me.
That’s why it is very important to go out and see how things work outside of the borders of your world. That’s the only way you can come up with a solution for some problem people in distant places have.
Sit and read first
I don’t like to do everything “by book” and generally I believe that we should experiment. But what happened to me was completely avoidable, because I wasn’t the first one. There are people who already experienced failure and explained that in their publications, such as The Lean Startup from Eric Reis
What I did wrong? First, I built a product, then asked a customer what they need. That was so terribly wrong, that it cost me so much time spent on developing something nobody gonna uses. Off course you can’t really have a startup with a sketch of your idea on a piece of paper for years and start to build once you get a critical mass of customers, but you definitely have to build your product with your customer.
Find your first customer ASAP
No matter what it costs, try to engage some customer immediately during development and ask them for feedback as often as possible. Also, offer them a product for free. We started nicely with customer acquisition. We had a couple of companies on our side, and we had frequent feedback from them, but then we started to travel here and there, pitch our business idea, and that moves us away from our actual clients. That’s sad :(
Quit your job if you can
There is no success if you’re not engaged 100%. If someone tells you opposite, don’t believe. You need to put all your effort and strength on your startup if you want to test it fast. Otherwise, it could take much longer, and if fail you lose much more time and energy if you had your regular job in parallel. I made exactly that mistake, I took some freelance projects on the side, which just postponed my progress.
Nobody gonna stole your idea
This is fear present at most of the startups. But don’t worry, does not matter how good your idea is, if you already work on it, feel free to share it with others. Paranoia does not help but sharing might helps because of your friend, business contacts or family will give you their opinion or idea which may impact way how you will develop your product. I personally kept my idea for some time in secret, but only when I uncovered it to my family and friends, I started to get some cool advice and got some great contacts which helped me at the time.
Failing startup is a great opportunity for starting a new one
I really don’t need to explain this one. If you already tried startup idea, there is a high chance that you will try another one soon, because you simply enjoy that.
Top comments (6)
Good advices, however looking at your startup seems to me you are far away from 'failed'.
Failed to me is when you exhausted every single option to improve and even then, you pick up and try to improve.
Imagine failing about 10.000 times and that 1 time worked ?
You would probably know more about that as we come from neighboring countries and know the history of Nikola Tesla :)
Anyway, I think you are still far away from failure, you just need someone that went through what you went through but from management side of view, that can help you grow your business.
For starters, if you want to appeal to english speaking countries and customers, I would strongly advice to look into grammar on your site, and then instead of 'contact us' at the end of the page... add something like - "schedule a demo today" .
Again, great post and pointers above.
Hei Joe,
Thank you very much for your feedback and advice. The website you are looking at is already 4 years old, we kind of stop it 3 years ago. From the perspective, you are looking, it is true that my ’failure’ is not a deadly crash, but still, I consider it as semi-closed, and moved to next chapter. When I moved to Berlin, my intention was to be as close as possible to the epicenter of the startup scene, so I can try out some new ideas.
Thank you once again for encouraging words, I appreciate it!
Funny I moved to Berlin out of exyu.. now in USA.
I agree with you, you should not dwell on old stuff and let you pull in.. everyone should know the time when to get out.
It was a good article!
I just started my company and I'm doing a lot of things wrong you mentioned ...
Like having a side job ... I tell myself I need to pay the bill until I have at least a prototype to pitch a client.
I really want to go full time but it is not feasible, monetary speaking.
I also keep secret what I'm doing except to a few because it's a very competitive industry and I know other companies could create a team of 50 developers without even batting an eye and create what I'm thinking super quickly.
So for this point, I may be biased but I would say it's ok to share but only once you're ready to go live and improve on the way.
First of all, I wish you a great luck! Do not take my pieces of advice as a formula for success, they should ignite some thinking and questioning, but not taken as 100% working strategy. I tried to mention all chain events makes my startup fail, if you believe it's irrelevant for you, feel free to ignore because every startup has their own story.
Once again wish you a luck with your business!
Thanks!
On the contrary, I think your points are totally valid and I'm just pointing out I realized I'm doing the wrong thing.
Then I just give excuses for my behavior ;)