Skip to main content

Ingredients of Startup Failure

I have started and worked on several startups in the past 16 years. When I look back, I find the following patterns appearing again and again in every unsuccessful startup that I was involved in.

Here is the list of patterns, and they are not in order. I wrote them as they came to my mind:

  • Giving Up Soon: We gave up soon. Sometimes at the start of success we stopped. At one startup we started to make small amount of money after several months, and then we stopped! To be fair, we stopped, because the team collapsed, but anyway we stopped at the moment that money started to come in.
  • Not Putting 100% focus: We did not put 100% effort into it.  For some of us it was the secondary job, and for some of us it was the last thing on the daily agenda!
  • Not Hustling: We did not hustle.  Some of us took care of our comfort instead of hustling.  
  • Not Passionate Enough: Some of us were not passionate about the problem we were trying to solve, or customers we were trying to serve, and the change we might make to the world.
  • Slow Reaction: Although we were much faster than many companies, we were still slow in reflecting, collecting feedback and adapting based on those feedback compared to many established companies. 
  • Launching Late: Before giving it to users to try, we changed the technology platform 2 times, the design a couple of times, and we we got stuck at working on less important features just because we wanted to make them perfect. We had to launch early and iterate fast, but we did not manage to do that.
  • Wrong Technology Choice: We were thinking about millions of users, and went after a technology that can handle that volume. That cost us time, energy and in the process we lost our focus. In the end of the day we had to change the technology, because we were not ready for it. We had to go with minimum and adapt as we grew. We were solving a problem that we did not have!
  • Co-Founders did not focus on Sales or meeting customers: Although we as founders made sales, it was not our primary task in the beginning. We hired Sales and Marketing people, so we could focus on Product Development. Instead we had to focus on Sales and face the customers ourselves to learn, learn and learn.
  • Did not burn the ships: We all had a backup plan in case the startup would not work. In fact we could sleep well at night, and do nothing during the weekend (at least some of us). These days if I see an early startup founder who is relaxed, I know he or she is just a wishful thinker.
  • Location, Location, Location: We did not consider the location we were launching at and the impact that it may have on our sales and fundraising. Maybe we could start from a better location that have higher market capacity and better access to funding. 
  • Aggressive Sales: We did not go aggressively after Sales. The startups that I am referring to here were B2B, and Multisided Market startups. Sales was very important. By selling, we were not only increasing the chance of success, but also were learning a lot in the process of selling. We had to spend time on sales to learn and earn (or at least proof that we can earn).
  • Best Team in Dream:  We thought we were the best team, but in fact we were not. We were a group of individuals hoping and wishing for the venture to succeed. 
These days when I have the opportunity to start a new startup project, I look at this list and ask myself if I see these patterns emerging, or if there is high chance of them appearing under current circumstances. If the answer is yes, I either defer the decision to start for later or discard the project.

Worth noting:

  • None of the above patterns is about product/service idea. As I believe the idea evolves and with the right mindset, right team and the right network you can turn any idea to sustainable business.
  • Not giving up soon, having a great team, focusing on sales or any other patterns from the list above will not guarantee success, but they will reduce the likelihood of failure dramatically. 
So I try to ask the following questions before starting a new startup. The answers to these questions reveals interesting facts sometimes:
  • How much committed will I be to this venture? How much do I believe in this idea? Under what circumstances I may give up? How can I not give up?
  • Do I have passion for this idea? Do I think about it 24/7? Am I obsessed with it? How about the rest of my co-founders?
  • Can I and others focus on this 100% of the time? How can we handle other obligations? Do I (and my co-founders) have the guts to stay focused, burn the ships and hustle?
  • Do I (and my cofounders) have the right capability to build this thing? Or are we are going to be dependent on others? Can we deal with the dependency? How can we handle the risk of such a dependency? How can we remove the dependency risk? 
  • Are we the right people to work with each other?




Post a Comment

Popular posts from this blog

Escalate, Escalate, Escalate!

What is escalation at organizations? Is it a way to solve problems? Is it a way to report things? Is it a way to put more pressure? Is it a CYA technique? What is it? How do you use it at your organization? How other colleagues of yours use escalation? Really, think about it and observe.

At IT service companies, leadership measures the performance of IT Help Desk by number of escalated work items over a period of time. The less escalation the better. The reasons are simple:

It is cheaper for companies if an IT Help Desk Specialist resolves an issue than an experienced technical specialist at one or two level higher. This is simple math, one gets $X and the other get $X*2And when client gets result fast, he/she will be happier. So, less escalation equals happier client in IT Services. Client raise an issue, IT Help Desk Specialist resolve it, BOOM, Next!

At organizations, It is amazing (sadly) to see how much lower level managers escalate problems, that they and their fellows can resol…

DAD Inception Phase Workshop Agenda

Disciplined Agile Delivery (DAD) realised the reality of the projects and introduced back phases to Agile community. Whoever works in a project based company, especially a project based company where projects are usually less than one year in length and each are for different clients, understands the reality of Agile in such environment. When you start working on a new project for a new client, it is essential to go through a phase that you get to know each other better, to understand the business purpose of the project, to understand the scope of the project, to know what are the high level architecture and what technologies are going to be used and who is the initial team, and if funding is available and also when things must be delivered and to whom.
In answering these questions you may need to meet with different people, run couple of workshops and brainstorming sessions. And this is called Inception Phase. As DAD is more like a goal oriented decision framework and not a prescrip…

Collocation is not the silver bullet for success and agility

To collocate or not to collocate? Most companies that are new to agile have been "consulted" by a "Scrum" Agile Coach, who suggested that they must break their organisation and have cross-functional teams to sit together in one location. Is that the recipe for success?.. Is it really?

Even though collocation has its benefits, it is not the necessary condition for a successful delivery team. Collocation as a dogmatic view may hurt you more than you think, and will not necessarily help you to deliver more successful products.

I am neither for nor against collocation, but I have experienced and worked with both approaches. And each sometimes worked very well and sometimes failed. All the variations of teams geolocation (collocated, fully-dispersed, partially-dispersed, or distributed) can work. It all depends on how the collaboration model is setup, what is the context and conditions, and how much the team and organisation are aware of each other, and are aligned.

Ha…