I have wanted to write a blog about my startup experiences for a long time, especially the lessons I learned from my failures.
Before I learned about lean startup methodology, I tried a startup the old way. We built Jobbertunity, a website that helps students organize their job search online – think of it as a CRM tool for job seekers. This was born out of my own frustration of organizing my job search. Our philosophy was very simple – “Build and then build and then build some more and they will come.” For obvious and unfortunate reasons, the startup failed. While I learned a lot, I still wouldn’t have done it the right way next time. I hope lean startup methodology will, hopefully, make me a better entrepreneur and product manager in the future. I have tried to summarize lean startup methodology here.
Here are some of the lessons that I learned from my failed startup.
1. Focus on your customer’s main pain point
We knew what a minimum viable product was. So we hacked up a website quickly and put it in front of students at my school (Duke University). This is where we started on the wrong path. Without understanding what their main problem was, we presented them with a problem and asked them if the solution fit that problem. They only focused on the problem that we presented and what followed was a slew of features that were requested. And guess what, we built them as well. We wanted to make every user happy. This gave us a false hope of progress – no. of features built, no. of lines coded, etc. While we built new features, it did not amount to improved user acquisition or retention. We failed miserably at our attempt and we wanted to do something else. Lean startup methodology was the buzz word in the tech space that every entrepreneur was talking about. So we decided to look into learn startup methodology to get out of the old mindset of “build and they will come”.
After learning about lean startup methodology, we decided to take a data driven approach to customer validation. We decided to meet a fresh set of students from other schools who haven’t used our product. We came up with a set of interview questions, which were aimed at understanding what the pain points were when it comes to job search and how they were solving it today. We decided that at least 80% of the students we interview should say that their main problem is organizing their job search for us to continue with our current idea. This is called minimum success criteria in lean startup terminology. Of the 20 students we interviewed who did not know our product, not even a single student talked about organizing as their main pain point. The top two pain points that were discovered using this process were 1. Not getting contacts to network with, in companies that they were applying to and 2. Filling out applicant details on every job application.
With this approach we learned about our user’s main pain point in one week rather than wasting our time building the wrong product for 4 months.
2. Listen but don’t implement every advice you get
You will hear this from every entrepreneur you will come across. When we started out Jobbertunity, we had a clear view of providing quality startup jobs for MBA students, but our vision got murky as we digested every piece of advice that we got, until we changed our product to organizational toolkit for job seekers. This is how it started. We wanted to get the career management center buy-in for our product, so that we could roll out our product to students easily. When we showed our initial half-baked prototype that provided jobs to students, we were quickly recommended to provide organization tools because that was the main problem for students according to the career management center’s view. While they might be right in their own respect, we should have taken it as another piece of advice, and tried to find it from students themselves. But, we took it as the truth as we held the career management to know-it-all source about students’ pain point when it comes to job search.
In hindsight, this was the single worst thing we might have done in the course of this startup. We started dividing our attention on two problems now, which consumed our time as we built features to solve both problems. While it seems like a dumb mistake now, it took us a while to realize it. We started off on a completely different path without learning and 6 months down the line, we were asking students to give us feedback on a completely wrong problem and an unnecessary solution.
I would recommend – listen to everyone and take everyone’s advice. But validate the advice that makes sense to you with your customer. They are the only ones to tell you about their pain point and what would solve their problem.
3. Tune out false positive signals
When we launched our product, we got positive feedback from students who listened to our idea. A lot of them even signed up to check us out. But after that it was a ghost town in Jobbertunityville. People would tell on our faces that our idea rocked just to be polite to us. I would have, most probably, done the same. We took this excitement as validation of our idea. Next, we took part in business plan competitions and we got tons of feedback there as well. We got a lot of positive comments from these competitions and we were in the final rounds and even winners in some of these competitions. While it was a great experience, and we learned a lot from this experience, we took it as another step to success.
We were not able to tune out these signals as false positive and treated them as successful milestones. And when the excitement and jubilation died down, we were left with the same product and the same users, who weren’t using our product.
My recommendation to avoid this would be to put a list of tangible milestones that adds value to the business. Please be aware that pushing more features or building an iPhone app should not be the only milestones, especially if its an early stage startup.
4. Measure, measure, measure
I admit that we did not get a grasp of our customer’s pain point. But if we would have measured everything that is happening on our website, we would have known pretty soon, what’s important and what’s not. Since our website was an organizational toolkit, job seekers used our website to track companies that they were interested in, maintain contacts that they wanted to network with (via LinkedIn API) and track jobs (via indeed.com API), in short, maintain progress for their job search. If we would have measured the right metrics such as how many people visited, how many signed up, how many added companies, contacts & jobs, and how many of them were coming back to maintain their progress, we would have got a pretty good view of what’s going wrong with our product. Instead, we decided to focus on getting as many people as possible, i.e. went after scaling the startup before we knew what’s working well and what’s not.
I would recommend looking at Dave McClure’s pirate metrics for startup – AARRR (Acquisition, Activation, Retention, Referral, Revenue). Someone from your company should be looking at these metrics everyday and figuring out what’s going wrong. This will also help you prioritize the right things depending on your goals for your company. While these pirate metrics are good starting point, there are many metrics that you need to look at within each one of them. For example, within retention metric, we could have looked at how many people came back to our website after their initial visit at the basic level, but we could have also tracked what they were doing when they were there, for example, how many added companies vs. contacts vs. jobs etc.
Overall, we made a lot of mistakes and learned a lot from these mistakes. Could we have been smarter? Maybe! I have realized one thing through this experience, people love to do what they are comfortable with. Engineers love programming, so their natural inclination is building a product. But focusing on what really matters and keeps your company alive is extremely important, even when you have to get out of your comfort zone. Hope this helps other entrepreneurs who are starting their journey on this new path. Take a look at lean startup methodology before you start building a product. It will save you a lot of time and energy and will help you fail fast and learn faster. Here is a post on lean startup methodology and my experience with it.
Quick tip: Have an idea? Go to a coffee shop and talk to users who you think will use your product. Offer a coffee for their time. Don’t ask them what they think about your product or if they would pay for it. Instead, ask how big the problem is, how do they solve it today, and what do they do before and after solving the problem. You will be amazed at what you learn.