Have you been in a position where you suddenly get an idea for a startup and think of it as the best idea in the whole world and that you would potentially become millionaire in a couple of months? So in the excitement you tend to do these mistakes as mentioned below.
We have worked with various entrepreneurs and mid sized companies, among which we had an occasion to work with an “Entrepreneur” from whom we learnt a lot of things not to do while you want to startup a product company.
His idea was of a carpooling app which would show you how your co-rider is connected with you on facebook in a single multilevel tree graph format to portray a sense of trust among co-riders and also had specific routing requirements, the car owner needs to stick to his route and the co-riders can search best suited routes based on their geo map marked start off points. Hence the core business idea was of carpooling, with just one interface to his users was a website. Hence technical aspect in this project was of sole priority and requirements were done as required by us.
But surprisingly the product never even created a single real time record in the production database months after it was made live. Yes, the product failed bad, despite such elegant technical algorithms implemented! He discontinued the system as he quit. Being the technical team of the project we were keen observing things happening and here are the things that lead to the failure:
- No validation of idea – He made a mistake by working on an idea which no one was interested in or already there were many such applications available in the market. The idea could have been easily validated by conducting surveys in various facebook groups or by using tools like SurveyMonkey. Our team had to develop an algorithm which took us several days that cost him more money. You need to validate your idea before building it. Why would anyone use your app? What makes you different from others who already exist? What is your USP? You need to answer these questions, before coding it.
- No market research – There was no market research done on the idea. Hence he was not aware of his competitors, potential customers, their spending habits and needs of the target market. Market research has to be done to gather data that helps you solve the challenges faced by your target audience.
- Assumptions – He assumed that he could ask the govt to support his application and everyone would sign up to use his app without even validating a single feature we built. When you assume things, most of time we end up failing. We need to always give access to few customers in every stage of the development and get feedbacks and reiterate.
- Not choosing the right team – Before approaching us, he had hired a freelancer, who could not complete the project because the freelancer did not have the expertise. He had hired the freelancer just because he was “cheap”. He ended up spending more! Instead of choosing cheapest service provider, you can hire quality providers and can opt to have a MVP(Minimum Viable Product) for validation instead of spending a whole year building all the features. This will drastically reduce your costs and improve the quality of the product. You would also want to have a process in place with the development team.
- I’m “Steve Jobs” kind of attitude – Having this kind of attitude when building a product is always dangerous. You tend to not listen to any feedbacks and believe that you are always right. When you build a product you need to get feedbacks as much as possible, plan and execute on it.
- Building a product just for funding – His sole purpose to develop this app was that he was fed up with his job and he would pitch the app to govt, and they would fund it or that he would sell it to facebook. This makes you think only of money and not about the customers or what they need. Most of the time this approach leads to a failure.
- Unnecessary patents and trademarks – He wanted to trademark his app name and patent the feature which he thought was the USP. Unnecessary trademarks and patents will make you spend more money unless your product depends on a particular algorithm or method which is the USP.
- Away from Reality – he was like a superficial starter, who always thought that building a website would drive in huge traffic as soon as it is live. In our conversations he always portrayed about the best case of every aspect of his startup but had no clue and a plan of how to get there.
From our early days we have also done most of these mistakes, by doing them and learning it the hardway. We always felt we should be well informed of experiences prior starting any tasks. Hence we believe this shared experience will be a learning resource for us here. We believe in this era most of the startups have two aspects Core Business Plan and Technical Aspect — mostly to reach out vast target segment with the help of the internet. Technical Aspect is important but always can be fixed by right management and better developers.
Core business plan is the most and soul important aspect as going the wrong way can drain you completely as in the above case. One main pattern seen in many successful startups is going as lean as possible learning the market trends on the fly. The lean way suggests to identify minimal viable product features that your product needs to have to hit the market, get the feedback and evolve based on needs. Being a technical team we always tend to consult entrepreneurs the best suited technical methodologies to go for, considering resource constraints and timeliness.