It was the last day of the fourth semester when a friend came up to me and said he was planning to start a business and wanted me to be a part of it. I listened to his idea and instantly said YES.
I said yes without doing any market research and without discussing how we plan to take this forward. I said yes without a second thought.
Why did I do that? Was the idea THAT good? Well, no. I made an instantaneous decision because I always wanted to be a startup founder and I had been looking for business opportunities for the past one year. When an opportunity came knocking, I couldn’t say no.
This is my story about that one decision and how it affected my life. Before I write any further, I’ll answer the questions that I receive most frequently.
Did the startup succeed?
Was it the right decision to start a company while in college?
Probably yes, because it taught me a lot. Even more so than college did.
We (my co-founder and I) spent a lot of sleepless nights, but it was all worth it.
Here are the lessons I learned from my first startup failure:
- Talk to your customers before launching your business
- Make a proper business plan
- Build an MVP first
- Form a team that you trust
- Learn how to be a salesman
Let’s dive deep into each lesson.
Talk To Your Customers BEFORE Launching Your Business
The idea of our business was simple – we wanted to build a platform where you could buy, sell and rent console (PS4 and Xbox) games.
After discussing our idea and creating a shitty ppt which we considered to be a business plan, we went on to build our product.
This was the first mistake we made.
Running a business is all about finding and solving problems. Your business idea is nothing but a solution to a problem. The key to being successful is to be flexible about the solution.
After finalizing the idea (problem), you should talk to your potential customers and explain to them your solution.
Doing this will validate your idea and also give you new perspectives towards providing a better solution.
Understand what the customer’s pain points are and mold your solution accordingly. Iterate your idea after each feedback.
How Do You Find Your Potential Customers?
To begin with, just discuss your idea with your friends and family. After that – identify where your potential customers hang out and go there.
If you’re struggling to find such people, you can always use the internet.
Using the internet to find your potential customers
- Browse through facebook groups, subreddits etc based on your niche and then put your idea up there. You get the most honest opinion of people through facebook/reddit because the people on there aren’t your friends and they don’t care about your feelings.
- Create a landing page (a simple one page website) and spend some money on ads to send traffic to this page. Showcase your idea on this page and collect emails. If you can collect a lot of emails by spending a little amount of money, you can be assured that your idea is a hit.
And if you’re concerned about running paid ads without any ROI then remember that the amount of money you would spend on ads for this page would be much less than the amount of money that would be wasted on building the wrong product.
Even though we made the mistake of not talking to our customers, it didn’t hurt us a lot because by sheer luck – our idea was actually solving a huge problem for hardcore gamers.
The second mistake we made was not making a proper business plan. An entrepreneur should be ready with all the numbers related to the business.
A consolidated business plan gives you the direction that you should pursue. It tells you what your area of focus should be at different times.
This takes me to the second lesson.
Make A Proper Business Plan
Most first time entrepreneurs make a business plan only when they are pitching to an investor or when they take part in a startup competition. But the truth is that you need a business plan from the get-go.
At the very least, your business plan should include information about how you’ll enter the market and how you plan on capturing it.
Entering The Market
Create a consolidated report about how big the market is and how you plan on entering it. There are a few important questions that you should answer:
- What is the size of your Total Addressable Market (TAM)?
- Will you enter the market by offering a product/service?
- Will you create content around your product before the actual product launch?
- How much time and money will it take to create the market ready product?
- What are the barriers to entry?
- How do you remove those barriers?
Capturing The Market
Capturing the market is all about customer acquisition. A few customer acquisition questions that you should be ready to answer are:
- What’s your marketing strategy?
- What’s your sales strategy?
- What is your customer acquisition cost?
- How can you bring down this customer acquisition cost?
After your business plan is ready, you should start building your product. This is where we made our most heavy mistake.
What was the mistake? We didn’t build a minimum viable product, we built the final version of what we thought would be right for our customers.
This takes me to the third lesson I learnt from the failure of Skiron Gaming.
Build An MVP First, Don’t Focus On The Finished Product
We spent a lot of time on building our product. We wanted to launch a full fledged website with all the features that a customer could potentially need.
How much time did this full fledged website take to build? 6 MONTHS.
We created an automated system to rent PS4 and Xbox games. We thought it would sway away our customers. But as it turned out, the customers didn’t like the complex set of features we built for them.
Customers were more comfortable in talking to our customer care executives over whatsapp and then placing their rental orders on the chat only. It was more convenient for them.
Our customer care executives recommended the latest games with the best reviews to the customers, that’s why customers wanted to talk to them before placing every order.
This was something that our automated system could not do.
Although we were solving a genuine problem, the solution we built wasn’t ideal. we could have launched six months earlier and then we could have used that extra time to build something that would have actually been helpful to people.
Always remember that the early adopters of your product/service don’t care about the the complex features. If you’re actually solving a problem for your customers then you don’t need a complete, beautiful looking product – all you need to do is make their lives easier.
There is a famous quote by Reid Hoffman, the founder of LinkedIn:
If you are not embarrassed by the first version of your product, you’ve launched too late.Reid Hoffman (LinkedIn Founder)
Keeping this in mind – always build an MVP (Minimum Viable Product) first. An MVP is just a product that might look rough but it gets the job done.
Show this MVP to your customers and improve it based on their feedback.
My co-founder and I did all of this on our own, and this was our next mistake.
So what’s the next lesson?
Build a Team That You Trust
You can’t go very far on your own. A crucial part of running a startup, or maybe even the most crucial part is building a team. My co-founder and I tried to do everything ourselves and we struggled a lot.
When you delegate tasks to your team members, you might feel that they are not producing quality of your standard. A simple rule that I have to avoid this is to accept that 80% is good enough. If the work produced by your team is at least 80% of the quality that you expect, then you shouldn’t worry about it..
You can delegate tasks with a peace of mind only if you trust your team. Your building process should be built on trust. If you don’t trust a certain someone, you shouldn’t ask them to be a part of your team.
Many entrepreneurs feel like they can achieve everything by themselves. But a real act of wisdom is when an entrepreneur accepts that he/she cannot be great at everything.
The greatest piece of advice I can give you is – “Don’t strive to be the smartest person, strive to surround yourself with the smartest people.”
The last and maybe the most important lesson that I learnt by failing is: Learn how to be a salesman.
Learn How To Be A Salesman
Selling, particularly the word “sales” has a lot of negative energy associated with it but as an entrepreneur you’re always selling.
You have to sell your idea to your team.
You have to sell your product to customers.
You have to sell your company to investors.
You have to sell your vision to everyone around you.
Almost all great CEOs have one thing in common, they are all good salesmen.
If you want to be a successful entrepreneur, nay, a successful PERSON – learn to sell. Life is all about selling yourself. You sell yourself when you go for a job interview, a college interview or even a date.
These were the lessons I learnt from failing at my first startup. I hope I can pass on these lessons to other young entrepreneurs.
The startup not succeeding doesn’t mean that we only made mistakes.
We did a few things right too.
We formed partnerships with Sony and Delhi Public School to organize gaming events in schools across Delhi. This turned out to be better than expected.
We’ve now been organizing these events for the past 3 years (2017-2020). We’ve converted Skiron Gaming into our side hustle now and we organize gaming events all across India.
This was the journey through my first startup.
After this, I started a new venture – Acoustic Bits. You can read about that here: Are eCommerce Stores Still Viable?
If you are on the difficult path of entrepreneurship, feel free to reach out to me.