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Building products: 5 mistakes to avoid
Save your time by learning from others' startup mistakes.
Hello there, startup enthusiast 👋
Is your dream to make a real difference? If so, please DON’T make these 5 mistakes. Plenty of ambitious people - including myself - have wasted months or years falling for these traps. Learn from us and be smarter about it.
Mistake 1: Racing to act on an idea you’ve just had
Every startup begins with an idea, but before becoming successful, that idea virtually always evolves, often beyond recognition (for proof, simply study any successful entrepreneur ever).
While you might be deep in love with whatever brilliancy you came up with, the sad reality is you’re likely to be wrong, and if you jump into implementation, you’ll probably waste a ton of time.
Keep in mind: at the start, improving your idea is cheap. Get on the right course while you’re more like a tiny and nimble jet fighter. If you wait until you have a big codebase and a handful of unenthusiastic users (god forbid a team and investors), changing course is like trying to move a death star with a broken hyperdrive.
Do this instead: Develop your idea. Clarify in simple terms: what is the problem your idea is trying to solve? Is it real? Is it painful? Do people truly care? How are they currently solving it? How much is it costing them (money + time)? Can you do it better and cheaper, and make enough profit to do well yourself? Do you personally know 10 people who would clearly benefit from buying it? No? Then go away, find them, speak with them, learn from them and improve your idea.
Ask yourself: as you learn, are you getting more excited or less excited about pursuing this? Unless you’re getting more excited, it could be time to ditch the idea and move on.
Mistake 2: Believing your friends and family
Look, it’s important to have them. Their job is to be your personal cheerleader squad and have your back when things aren’t going well. Call them every now and then! Don’t mess up your relationships because of your business. But when it comes to getting useful feedback they are far from an objective audience. It’s unlikely they’ll tell you your idea is bad (or more likely uninteresting and irrelevant for them), because they don’t want to make you upset and risk the friendship or relationship you have.
Do this instead: Get feedback from strangers currently suffering from the problem you want to solve. Establish if the problem is real. Think what a long term sustainable price for your solution is, name it, and ask if they’d be willing to pay that amount.
You might get two kinds of answers. If they say “Absolutely!” or “When can I have it??” you might be on to something. But if it’s more like a “Maybe” or “Keep me posted on your progress”, then it’s a No (they just don’t say No because they think they could hurt your feelings). Go back to the drawing board.
Mistake 3: Chasing investors, accelerators, or business competitions instead of paying customers
These days it’s cheap to meet potential customers and to make a simple product. You can get surprisingly far building rough prototypes with hardly any capital. Most SaaS businesses are elaborate spreadsheets. You can set up an ecommerce shop on Shopify in hours. And very often, you might not even need funding at all.
Do this: Think - how cool would it be to become profitable while being in complete control? If you spent zero time on investors and instead focused on customers, wouldn’t they be much better served, and wouldn’t you make a lot more sales?
Here’s a useful mental model: you want to be as high as possible on the scale below:
Highly profitable, high growth
Ramen profitable, high growth
Profitable, slow growth
Product but no revenue
The higher you are, the better your negotiating position. Investors start approaching you. You get better terms. And if you still need funding, can you still get one or two stages further without it?
What can you do to get one or two notches higher on the list without funding?
Mistake 4: Bloating v1 of your product with non-essential features
A feature-packed launch could seem enticing - you could have the impulse to completely satisfy every small detail of what your early customers asked for. But this is a trap. By building every single feature, you’re wasting a ton of time not serving customers, not learning what you should be learning, and not making any money.
How you should think instead: v1 is a learning step. It’s almost certain that when you release your product in the wild and your customers try to install and use it, you’ll come across 20 things and problems you hadn’t thought of before. These 20 things stand between you and having a profitable, sustainable product. Find out what these are ASAP by launching a minimum viable product quickly. If you are not embarrassed by the first version of your product, you've launched too late.
Mistake 5: Not quitting when you really should
I endorse perseverance, but only when you’re being smart about it.
Imagine: maybe you found some initial interest, launched a product and even got a few sales, but you’re far from profitable. It’s costing you a lot more to acquire customers than you’re earning in sales, and there is no clear path to break even. Most customers ignore you and it’s becoming clear your product isn’t that valuable.
Driven by momentum, sunk costs and growing agitation, you start adding convenience features on top of your v1 and maybe make a few more sales, but in the big picture you’re not making progress. 6 months later you’re exhausted and broke.
Do this instead: when your path to profitability is unclear, recognize that you need radical changes. Make a list of ideas, grade them by cost and benefit, ditch the incremental or expensive ones and think hard whether the remaining ones can turn things around. If that seems unlikely, it might be time to cut the losses, shut the product down and move on. And maybe write a blog post about what you’ve learned 😅
Startup life is wild
Be smart about how you navigate it!
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