If you want to be a successful entrepreneur, you have two options: learn from your own mistakes as you go, or take note of lessons learned by those already at the finish line.
We sat down with a few of our friends in the start-up world to glean from their sage wisdom and experience. The gist of our questions for them was: What advice would you give someone just launching their first startup? And how did you come across this advice yourself?
Grab some coffee and a notepad, sit back, and enjoy!
Paul May, Founder of BuzzStream
While you shouldn’t be afraid to pivot towards a new vision, you should be incredibly wary about pivoting towards a new target customer.
When we launched our first product, we had a very clear idea of who our target customer was and the problem it would address. But immediately, we received interest from other customer segments. Because they were excited about us, it was easy to fall into the trap of chasing after this new group in the pursuit of early revenue instead of focusing on our core customer group.
The problem is that, as a startup, you have so few resources that you need to be incredibly focused on a specific customer pain point. While it seemed like these other customer groups had the same requirements, each segment ended up having unique needs that didn't present themselves in early conversations. So by pursuing multiple customer groups, we ended up with a less focused product. On top of that, it confused our messaging and made our promotional efforts much less effective.
Eventually we made the decision to step back and focus on our original target customer. This was scary because it put a lot of revenue at risk. We did see the revenue from the secondary customer segment dry up over time, but the revenue increase from our initial target segment grew at a rate that more than made up for it.
Eric Koester, Co-Founder of Zaarly
The key to building a successful online marketplace is providing people with a 'well-lit' place to do business as they do in real life. At eBay that meant focusing on online reputation and ratings, ensuring the eBay community had places like forums to communicate and mirroring real-world behaviors as much as possible.
Meg Whitman, CEO of HP, former CEO of eBay, and a board member at Zaarly gave us that advice about meeting people where they are. We had been working to build a local online marketplace for people to discover talented people to help them with just about anything. And Meg's advice came just about 6 months after Zaarly had launched as she joined our board. It was crucial advice to help give us focus and key tenets to build around: (1) making a marketplace that provided transparency into the people participating in the community, and (2) mirroring real-world behaviors. Over the next six months, it helped us to build features and our community in that mindset. In some ways, we knew these were important, but having it laid out very clearly with Meg’s experience at eBay helped create a much clearer path forward.
At the time we received this advice, it felt like a breath of fresh air. It was exactly what we needed to hear and the timing could not have been better. Obviously, we were ready to embrace it immediately since it was coming from Meg Whitman, one of the most experienced people in building online marketplaces. Today, we look at each iteration, each product feature, or each initiative through those lenses: How does this make our marketplace 'well lit,' and does this mirror real life?
Harley Finkelstein, Chief Platform Officer of Shopify
Build something that you yourself would use. In other words, build a restaurant you would want to dine in. Don’t just build something you like and put it out there, hoping it sells.
When Shopify first started, the original co-founders (Tobias Lütke and Scott Lake) were actually looking for a platform to sell their snowboards. They discovered they either had to spend millions to get a custom e-commerce site or sell the snowboards on something like eBay. When they launched Snowdevil in 2004, a snowboard e-commerce site, they realized others could benefit from an easy-to-use e-commerce platform. So they pivoted their business, from selling snowboards to launching Shopify in 2006. The key for them was to have an agile model: Put something out there, let people try it, get feedback and modify it. Then do that over and over again.
This insight came about as a result of going through the process of building the type of software we needed for our own use. Years later we realized that certain things we did then naturally or organically worked out. We became more analytical. Our company is still run as a startup today. Everyone on the team is an entrepreneur. We believe “done is better than perfect” and we believe in failing fast.
This approach has been key to Shopify’s success. There are no other companies out there doing what we do. Shopify is dynamic, always improving, and always adding new apps, themes, and functionality. This has made us leaders in the industry and also competitive because we are constantly improving. We don’t wait for milestones. We change dynamically based upon feedback and new technology. Had we not done this, we probably wouldn’t be the industry leader.
We have our ear close to the ground. We understand our customers and the industry. It’s a perpetual dynamic process in both tech and business development – we call it “agile” (some call it “Biz Dev 2.0”). We don’t spend months negotiating a business agreement for a 3rd party to build something for our merchants. If you want to build something for Shopify, you simply have access to our API! Then you can put it into the app store and you’re off!
Mike Raab, VP of Sales at CopperEgg
When CopperEgg first launched RevealCloud for server-monitoring in July 2011, we focused primarily on the product, not the marketing. We didn’t even think about tracking and profiling our first customers in order to learn how to have a bigger reach in the future. We had no idea how they found our site or where they learned about our product. We had to do quite a bit of backtracking to figure out how to reach our target market in order to grow the company.
About a month after we launched our product, we began doing some SEO research and it was clear we had no understanding of the origin of our sign-ups. After conducting research and talking to our customers, we knew we needed the right tools and processes in place to track how signups arrived at our virtual doorstep (website) so we could acquire new customers and grow the business.
At the time, it almost seemed like an insurmountable task. We started from zero and built up our knowledge, tools and processes from the ground up, and we incorporated the advice of many consultants.
One of the things we do differently now is we refine our marketing tactics and programs on a daily basis. We have a variety of tools to tell us exactly where our sign-ups are coming from and how they came to know about CopperEgg. We utilize these to optimize the mix of marketing that we conduct. The mix includes all manner of social media, an SEO optimized website, as well as targeted programs and advertising.
There was a lot of trial and error at the beginning, and it took months to develop. Now we could not live without the marketing visibility we have on a real-time basis, and it allows us to make better marketing investment decisions every day.
Damon Ramsey, Founder of Healthism
I think the most fantastic piece of startup advice I've received is 'build half a product, not a half built product.”
When we first started Healthism (and later on branched out to our SaaS based product), we were utter perfectionists on a grand mission to build the most feature-complete health platform on the web. We didn’t want to build half of a product which could run the risk of being inherently inadequate. Later we learned that leaving out features and modifying our product organically, based on client feedback, is the golden path to success. Trying to cram unlimited features into our own product without customer feedback is a great way to get lost in a no man's land.
I would hear about this whole minimalist approach to software every once in a while from various sources. But I only really understood what it meant when I read, 'Getting Real' by the very intelligent folks at 37Signals. At that point, Healthism had already been in business for six months.
We had spent too much time building features without any objective measure of their utility. In reality, we harmed ourselves and wasted resources by delaying our own progress building pipe dreams, as opposed to client-driven features.
I had always wholeheartedly agreed with the lean startup model in principle, but in reality I was a feature monger when it came to assigning tasks to my development team. It was only after we had gone really far down the rabbit hole that I realized the value of this advice. So “Getting Real,” sang to me loud and clear. Now we are seeing the impact every day. I try to make conscious decisions to reject almost everything I personally want in our product, only letting features come to the drawing board when our consumers ask for them. Things are a lot saner for the team now, and our product is much more effective because of it.
What piece of advice did you find most helpful? What lessons did you learn early on that you would give as advice to a new entrepreneur? Please comment below!
Special thanks to each of our contributors!
Paul May – as a cofounder of BuzzStream, Paul helps other businesses track their “buzz” through tools for social media marketing, PR, and link building. Because of his expertise, he offers a unique perspective ways for businesses to increase traffic to many websites by helping them find ways to be found online.
Eric Koester – this “reformed startup lawyer” launched Zaarly in February of 2011 after he met a group of interested investors (that included actor Ashton Kutcher) at LA Startup Weekend. Koester and his team won the competition that weekend and soon found success with Zaarly, a platform that connects local, reliable, friendly people to get the things you need.
Harley Finkelstein – You can say Harley is a professional entrepreneur (he launched his first company at the age of 17!). He brings plenty of expertise to his role as Chief Platform Officer at Shopify. This powerful e-commerce solution includes everything you need to create an online store on their easy-to-use platform.
Mike Raab – this “regular guy who loves technology” has a passion for his customers at Copperegg, doing whatever is needed to help deliver high quality products and solutions. At the same time he is a technology sales powerhouse who practically invented consultative sales - he brings a level of sincerity to his work ethic as the VP of Sales at Copperegg.
Damon Ramsey – as a health technology expert, Dr. Ramsey has a vendetta against poorly designed health applications and a deep passion against disease. This eventually led to the development to Healthism, a platform for preventative and family medicine and health technology.