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Just over a year ago, I started working on an idea for a consumer tech startup. I was burned out from 2o years as an ER doctor and the challenge of learning the world of tech from the ground up was nearly overwhelming, but exciting.
Looking back…I didn’t know a thing about what I was getting into but I’ve loved every second of it.
Now, 1 year later and many hairs grayer, we are poised to launch our product. In the spirit of sharing lessons learned in the startup community, this is my perspective on my biggest mistakes (of the many I made) as well as a couple things that I did well in my startup’s first year.
Mistake 1: I hired an outside dev agency to build my MVP
No doubt this mistake is the ultimate death of many really good ideas as the idea languishes in a mire of lack of control and dies a slow, agonizing death.
I’m not a developer + I need a product on the market = hire dev agency? Wrong answer. Try again. Darn it, how do I make this work? I wrestled with the equation and incorrectly came to the conclusion that hiring an agency to build my MVP was the answer.
Six months and tens of thousands of dollars later, I pulled the plug on the outside development agency that had bogged down my product. I took a hard internal look at my process for getting from idea to market, and I revived my idea. It lives. Phew!
My mistake was not the hiring of the agency — no doubt there are times and circumstances when hiring a digital agency for a very specific project later in the life of a startup is appropriate and successful. My mistake was believing that the good people at the dev agency had the same passion and vision for my nascent idea as I did. They didn’t.
My timeline, control, aesthetics, design, and budget suffered. My project was one of many projects (and a small one at that) on their plate. I was the blob of unsalted mushy peas on the dev agency’s plate full of brown-sugar mashed sweet potatoes and perfectly seasoned grilled salmon. Food analogies aside, you get the picture.
I pulled the plug, fired the agency, and we started over. Best decision ever.
Mistake 2: I wasted time building a pitch deck
Pitch deck, schmitch deck. My company, dijjoo, is 100% bootstrapped. What do I need a pitch deck for? Good question.
As I embraced my new role as startup co-founder, I dove in and read everything I could find about the industry. Turns out, a very large portion of articles I read on Medium and Substack and elsewhere were titled something like “7 ways to win over VCs with a great pitch deck” or “What every new startup founder needs to know about pitch decks” or “No pitch deck? You must suck”.
Everything in the startup community seemed centered around investing — it was the great chase for investment dollars. Angels, syndicates, pre-seed, seed, valuations, SAFEs, convertible debt, venture capital, series A, success! To paraphrase Ricky Bobby’s son from Talladega Nights — “I don’t know what it all means, but I love it!”
My mistake was not the time I spent learning about all the complicated aspects of funding in the startup community. My mistake was believing that acquiring angel or VC funding was equivalent to success. It isn’t. Building your company and creating value for your customers is equivalent to success.
I realized over time that VC funding is just about the last thing I needed in my first year. Some of the VCs say this themselves. I recommend Chris Moody’s highly entertaining and informative YouTube series entitled “Never Take Money From A VC”. Chris Moody is a partner at Foundry Group, a venture capital firm located in Boulder.
Just like hiring an outside development agency, there is an appropriate time and set of circumstances which potentially necessitates a foray into the world of startup funding. In my case, with my company, it simply was not in our first year.
I spent time building pitch decks when I should have been creating value for my future customers.
Mistake 3: I attempted to create an “investor pipeline”
Ha! I had grand dreams of investors lining up to fund my company on my terms. That’s what a “pipeline” is, right? That’s what all the articles wanted me to believe.
I read about how to build an investor pipeline, designed the perfect spreadsheet to capture all that wonderful data, and then…what?
The short description of this mistake is: see Mistake #2. I emailed VCs, sometimes cold and sometimes with warm (lukewarm) introductions. Nothing.
Recently, I went back and looked at some of those emails. Let’s just say there is a high cringe factor.
I didn’t know what I was doing. I had not expressed one ounce of value of my non-existent product to anyone with any money to invest. It wasn’t the right time.
My mistake was not the time I spent meeting people, putting myself out there, and building relationships. My mistake was believing that my pre-launch, pre-revenue company would attract investors. It didn’t.
I’m a nobody. I have zero prior experience in the startup world. My profile on Clubhouse lists me as “Previously founded #absolutelynothing”. Unless you are a proven serial entrepreneur with successful prior exits, no VC in their right mind will fund your idea.
Your idea is worthless. It’s the execution of the idea that matters.
Mistake 4: I acted on the advice of too many people
When I talked to people about my idea over the past year — friends, co-workers, family, random people in the grocery store line — I invariably received 2 types of responses. 1. Advice, or 2. “That’s nice” with a quick change of topic.
Luckily, the vast majority of people seemed truly interested in my project and offered me advice. Cool.
On one day back in January, I scheduled two zoom meetings, each with a company founder with lots of experience — a mentor. My goal for the day was to come away with a monetization strategy for my consumer product. During my first meeting, the mentor and I discussed 4 or 5 potential monetization strategies and decided that a subscription service seemed like the best way to go. In my second meeting, as soon as I mentioned the word “subscription” the mentor said “a subscription strategy will kill your company.”
Two smart people. Two opposite pieces of advice. This is never going to work.
Everyone wants to give advice. All advice comes from someone’s personal anecdotal experience. All experiences are different.
Take the advice, digest it, mull it over, synthesize it, criticize it — but don’t act on it. I did on several occasions and it never felt right. I found myself regretting it, reversing course, and ultimately wasting time and money.
Advice is data. Data is not information. Don’t act on advice — act on information. I quickly learned that one of my many new skillsets as a startup founder had to be the ability to synthesize all the advice and make actionable information out of it.
My mistake was not that I sought out smart people to discuss my idea. My mistake was acting too quickly on what they had to say. I had to learn to make information and informed decisions out of advice, which are simply data points.
What a downer. It would seem that I spent the past year screwing everything up, right?
But, in reality, painful lessons learned are lessons learned forever. There’s no substitute for failure. Along the way, I did manage to get a couple of things right.
Get it right. Create value. Talk to customers.
First, I talked to tons of customers.
I have the enviable situation that my product is a consumer app. Everyone is a potential customer. I’m not a B2B SaaS product where I have to seek out the second tier middle manager of the pretzel division of my target customer to talk about my company.
Pretty much everyone I’ve come across over the past year knows a bit about my company. Those conversations generated lots of advice, a little information, and, most importantly, validation that I was on to something.
When a potential customer reaches for his wallet and says “this is great, how do I pay for it?”, that’s value validation.
Those customers told me what they want in an app like dijjoo. They told me what is important to them and what is irritating about my competitors’ apps. They dreamed with me and said “what if”. And I listened.
All I had to do was start the conversation, ask the occasional question to keep it going, and listen.
Build the team
Second, I gave away a third of my company to a co-founder.
That’s right, you heard me.
I stumbled upon a co-founder who shares my vision and passion and has an amazing skillset critical to our success. I offered him a third of my company to join me and our third co-founder.
I say “stumbled on a co-founder” because that seems to be the way it happens. I’m active in several groups of startup founders, and the big problem I hear most often is co-founders seeking co-founders — most often a technical co-founder. I guess that’s why you can’t swing a dead cat without seeing another marketplace app for technical talent.
My original co-founder is my super savvy, super motivated 18 year old son, Alex, who is now a freshman at the University of Utah’s Lassonde Founder’s Institute and Global Business Scholars Program. I didn’t stumble upon him. But, we did stumble upon our third co-founder, Scott, who is a relative of a guy I’ve known for 25 years. Scott is now our co-founder and that guy who introduced us is one of the smartest and most experienced marketing professionals in the country.
We then surrounded ourselves with an advisory team of seasoned, highly skilled people in the tech and startup industries to (yep, you guessed it) give us advice on our business. They provide advice and we synthesize it, decide what’s important, and execute the plan. That guy who introduced me and Alex to Scott now sits on our advisory team.
Talk to everyone. Ask questions and listen. Good things happen. It truly is all about team, team, team.
So, don’t get too caught up in yourself and certainly don’t waste time on the hype. Steadfastly build your company, talk to your customers, create value, and surround yourself with great people.
See? You could have skipped all those other paragraphs and got right to the bottom line. Now get to work.
If you’re interested, our company is called dijjoo (as in, dijjoo climb that mountain? dijjoo find that beach?). We are very close to launching our consumer product. dijjoo is the adventurer’s journal. Capture the moment. Share the adventure. Monetize your creativity. dijjoo: thrive in the adventure of life. You can sign up to be an early customer at www.dijjoo.com.
4 Mistakes I Made (and 2 Things I Did Well) in the First Year of My Startup was originally published in The Startup on Medium, where people are continuing the conversation by highlighting and responding to this story.
The Startup – Medium
mvp, business, startup, business-strategy, entrepreneurship