How far along are you on your startup venture? Just got started? Will start soon? A couple of years into it? Imagine you can travel on time, go to the future 3-4 years from now and see that kaput, you failed to build a sustainable business or to get a successful exit. Since you are just passing by the future, you take notes of everything that you should have done different, you come back to today’s date and you change the course of your startup. You still don’t know if the changes will make it a success, but you know you won’t make those mistakes for sure.
As you work on fixing those mistakes, you realize you got it all wrong. It wasn’t the competition landscape, it wasn’t the lack of features, it wasn’t SEO, and it wasn’t even the funding needs that caused your startup to fail. You got all those things right in the first place. You’ve built a good product, you figure out how to navigate the competition, you ranked pretty well on Google for the keywords that matter to your business, but not matter how hard you pushed, you didn’t get the break into the success room.
As you start to ponder, you realize people weren’t adopting your product as you expected. There was also too many products playing on the same field and you noticed you could never get written on the press as much as the other guy, or that you couldn’t get a meeting with that one important VP at a large company to discuss a distribution deal. You sit down and you write: Indifference, Noise and Inertia!
Failure Reason #1: Indifference
It doesn’t matter how hard you shout if there is no one in the room to listen to you. You realized you had to spend a lot more on marketing than you originally planned. The Tech press didn’t cover your company’s announcement as much as they did of the other companies on the same space. Your emails and mail campaigns had awful returns. People were not talking to others about your product. Even your best customers were not proactive at referring new customers. Armed with this information you start asking other entrepreneurs what would they recommend and in one of the many conversations someone asks if you read the Purple Cow by Seth Godin.
You get the book and you realize how mediocre your product was. It wasn’t remarkable or memorable. It was plain vanilla. It solved be problem, but so did the others. You noticed you surrounded yourself with people who were not giving you honest feedback or didn’t know best. You saw your competitor 4 years from now and they have this extra sparkle on their product. People talked about it. You jot down: Be Remarkable!
Failure Reason #2: Noise
Turns out you picked a segment that was poised for explosive growth and even before the explosive growth happened there was one new startup or a new product from a big company launching every other week. You had a list of competitors that was as long as your spouse Honey-Do list you’d been accumulating since you became an entrepreneur. One time you got covered on Mashable and you were pretty excited about it. The title of the post was “25 Online Tools for…” You realize is not good to be on a bucket of 25 substitutes.
You kept struggling with how you distance yourself from substitutes and competitors. How can you tell your story in a way that people will see that you are not “just like X”. You remember someone mentioning Blue Ocean Strategy. You go online, get your next day delivery of Blue Ocean Strategy and devour the book the same day. You realize you were just adding features to beat your competitors. You forgot to remove features afraid of upsetting some of your customers. You noticed you didn’t segment the market well enough and you were trying to create this generic solution to help all. You were playing a game that you couldn’t win. It was the existing market game. The game you can win is the game you invent and you create the rules to favor yourself. You go back to your pad and write: Change the Game!
Failure Reason #3: Inertia
A third observation you made was that you were forcing people to go through too many hoops to use your product. No, it wasn't the conversion funnel which you got down to just asking for an email address as you kept removing fields from that page. You had a clear call to action. The value proposition was clear; the pricing model was just like the next guy. Turns out your product was too different from what people were doing before and required them to make a giant leap of faith and spend quite a bit of time learning how to do things “the right way”. You’d got a new customer than you expected them to learn about it through many of the helpful FAQs, forums, training videos and other tools. You provided it all. People were so stubborn, you thought to yourself.
The more you think about it, the more desperate you are because until a point in time, all trends were point up and to the right, but then it stopped. The initial customers were eager to learn and adapt, but the majority of the customers were not. You go buy a cup of coffee at a Starbucks and you notice a Barnes & Nobles nearby. You enter and you browse the Business books session. You read many of those. Then you bump into Crossing the Chasm and you immediately recall what that book was about. Your company failed to cross the chasm. It was too big of a jump for anyone but the early-adopters. You realize you should have closed that gap (the chasm) or created intermediate steps so people were taking small steps towards changing the way they did things. You think about it and you realize you should not be forcing people to change, you should find the people who were ready for that small change. You write on your notebook: Find who needs us!
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This was part of what my talk yesterday at the Founder Institute about Market Research.
Naomi Watts Leonor Varela Joanne Montanez Michelle Obama Kerry Suseck
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