I read an article where Peter Thiel said that most startups fail because of difficulty in Sales and distribution.
I read over and over again the value of Sales and the need for a founder to focus on "the business side", but then I still marginalize the role of sales.
I'm I broken or do we all do that???
Going into this thing, I really thought it was all word of mouth. After all, that's how Google exploded.
And I didn't realize that 99/100 people might not like what you built, but that 1/100 is enough to support a successful product.
But you need sales and marketing to find that 1/100.
If your startup is some enterprise product that cost $1000 a month.. or a small business app that cost $100 a month.. you are unlikely to get word of mouth users, and need to actually go down the sales route in one way or another.
Kind of related to the Dunning-Kruger effect.
ugh. this is 100% me. spent 6 years working on a hard problem. Why? Because ironically people wouldn't pay large sums of money for it and I figured that if I made it 1000% more innovative than the market I'd surely justify the price.
I sometimes look back and see how fucking naive I was. I'm a totally different mentality now. It's figuring out how to get paid and making sure you are able to CHARGE people for it. You just need to get to the absolute MVP. If it's something nobody has seen before then you don't even need to build it. Just try to sell the god damn thing before you even build it. However, if there are already established markets and competitors you can't do it without risking looking like a snake oil salesman but what this is the problem of many engineers, we view making money as evil and negative because we devalue our work, we just don't see the business value and so highly possible we end up working for free at some point our careers.
For example:
Marketer: Our software that will boost your sales by 50%.
Developer: It just scrapes data from other companies and resells you public data. You can find it on github.com
VP of Sales: Shut the fuck up.
Anyhow, I can't stress enough. Startup is 80% people and 20% coding. I've learned my fucking lesson the hard way.
Interesting, applying Dunning-Kruger outside it's original scope. Good explanation for the brilliant-yet-incredibly-dumb Dr. Ben Carson.
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"Don't go off to the races, solving difficult problems for people who won't pay for it"
and
"To us its a bunch of tables and CRUD generated on top of it. To them, its whether or not theres a free plan."
and
"Recognize when there is a poor market fit and CHANGE the situation. Falling in love with your own creation tends to blind you."
gg startups, hello drudgery
In the 1980's I worked for an Electronic Design Automation startup (during the go-go years for EDA). Our CEO said: "If you asked customers to give a letter grade to their current EDA tools, most would give a "D" or "F". If we can get a "C" we will do great."
He was very right. People in pain open their wallets easily, even for a stop-gap solution. That gives you money to do the solution that eventually gets graded "B" and even comes to define "A" if all goes well.
Ego. Nothing wrong with it as long as it's kept in check but let's not pretend we don't know where the drive comes from.
Seems obvious, but there's a reason it happens so often. If you live and breath your startup, you're better prepared to take on opportunities. Even if you're only at your desk "working" for 8-10 hours a day, you can find a lot of serendipity by talking about it with friends and family. Wait, you know somebody who could be a customer? Wait, you made money on your last job and want to invest? Wait, you want to work with us? It's easy to get into a mode where you're forever pitching, networking, and being your company, because there are real benefits.
That said, I've talked to a weirdly high number of people who had a kid while founding a company. Their tongue-in-cheek logic: "This is something that's obviously more important than my company. If I'm going to have my self-esteem wrapped up in anything external, it's better to be my child than my company. My business may fail, but I will not fail to raise this kid."
Me, I got a dog. It's working out!
Lesson 1. Sales and Marketing. So true. I think every entrepreneur greatly underestimates sales and renvenue growth. It's easy to create "top-down" market share spreadsheets and imagine the opportunities. It just never works that way. I am starting to learn that Sales is a major part of any company. People tend to think that just because there are fewer and fewer brick and mortar stores, and face to face meetings for that matter, that sales isn't an integral a part of a company.
Lesson 2. Indeed money is important. But at the same time how necessary is it for a lot of what Silicon Valley is producing these days. Hardware and development tools are the cheapest they have ever been. You certainly don't need a ton of venture backing to create a web service. That is the approach I am taking.
Lesson 3. With my web service I never created spreadsheets with forecasted user growth. But at the same time can say growth never really took off the way I had hoped. More important to me is year over year growth.
Lesson 4. I am still running this as a sole founder... Anyone out there interested in sales/marketing?
Lesson 5. Great point. Always a difficult decision knowing what features to add. More and more I add features and have the requesting customer at least partially fund the development of it. And more often than not don't release them as a "public" features. Sometimes you have to resort to "consultingware" until your fully self-serve web serivce takes off on its own.
Lesson 6. Indeed. Never be afraid to reach out to people who sign up for your service and ask them more. Stackoverflow is a great site to "find peoples pain".
Lesson 7. Yes - you always have to keep your chin up, especially on days where you feel
It would be interesting if Ross could share some indicators on his revenue. If not, other metrics like how long it took to get the first sale, etc.
Of course, if you go the VC funded route and want to be huge, then go for glory and quit your job. But if you want to build a smaller, steadier side business that you grow over a longer time, don't quit your day job.
I can't relate to this at all - there must be a tiny portion of entrepreneurs that can. I've been blessed to be in a position where I've never (as an adult) been hopelessly poor, but I've absolutely been in a place where I've worried that I'd have enough money to last until pay day. I've been in a position where I've sold anything I could think of to have enough money to buy food, diapers, or enough fuel to get to work and back for the rest of the week.
