SNAP Summit » Blog Archive » 7 Things I Learned From My Startup Failing

Shared by Oliver Ding

"What’s the biggest cost of a startup? Time. Building an app, regardless of platform, often takes a couple months — sometimes more. The opportunity cost for spending time on a startup is, therefore, the time you could be spending on any other startup.

Time is your scarcest asset. Don’t waste it on an idea that isn’t going anywhere. When it’s time to walk away, bite the bullet and leave. Better yet, set up quarterly milestones that recognize conditions for failure (ex: “Under 1000 users with less than 5% monthly growth”), giving you a firm reason to cut your losses and move on."

We had a killer advisory board. We tested our site with user after user. We listened to feedback and iterated quickly. We launched our public beta in less than three months. We built relationships with investors, and applied to YCombinator, getting as far as a final-round interview.

Six months later, we walked away $50,000 poorer, and no closer to success than when we started. What went wrong?

For the first time, I’m sharing my startup lessons — and my story — with the public.

1) Pick a problem, and solve it.

In January, 2009, I set out with Cassie Phillipps and Raphael Lee to start a new company called Trogger.

We envisioned Trogger as a new kind of communication platform, combining the conversational depth of forums with the virality and flexibility of the social web.

We suffered from the “no problem problem.” Cool as our technology was, and as compelling the concept, we never picked a single, specific problem to solve. Our vision kept changing, and our proverbial audience never showed up.

2) Know your audience. Better yet, BE your audience.

Joshua Schachter started del.icio.us to manage his personal bookmarks. Reed Hastings launched NetFlix to avoid late fees. My old roommate, Chris Smoak, got frustrated with the options for monetizing his Facebook apps, so he launched Gambit, now a fast-growing ad network.

By contrast, none of us at Trogger were avid online communicators. We shied away from blogs and forums, and weren’t exactly rabid Twitterers. We built a product outside the scope of our experiences, which is a bit like a cattle rancher opening a vegan bakery.

3) Match the strength of the company to the strength of your team

Cassie and I started off as business partners at Room Full of People. We complemented each other well, drawing on our skills, enthusiasm, and natural talents.

With Trogger, however, we faltered, focusing on areas far outside our passions and expertise. At first, I liked learning new skills — UI and front-end coding — but I ended up frustrated. I spent whole days poring over style sheets when I really wanted to be out striking deals.

Before Jeff Bezos started Amazon, he attended a six-week intensive workshop for booksellers. By contrast, many founding teams fail to match their vision with their skills, and falter as a result. Don’t make this mistake.

4) Talk to people and listen to them closely

I talked about Trogger and got reactions like:
- “I don’t get it.”
- “I’m not sure I’d use it.”
- “I don’t think it will succeed.”

I dismissed such naysaying as hogwash, vowing to push forward at all costs. Turns out, the naysayers were right all along.

When you’re met with confusion, doubt, and dismissal, it’s time to reevaluate. The world, collectively, is smarter than you are — pay attention to it.

On a related note, “stealth mode” needs to die. Your secrecy can — and will — deprive you of valuable feedback and insight. Get out of stealth mode as soon as you can; better yet, avoid it in the first place.

5) The fewer heads, the better

I’ve seen brilliant, motivated, entrepreneurial people come up with great ideas, yet abandon them for lack of a co-founder.

Companies succeed with single founders all the time. Just look at Digg, Craigslist, eBay, Netflix, Wordpress, Wikipedia, Amazon, TechMeme, PBWiki, TechCrunch, TechMeme, and Etsy. They all started with single founders, and they’re far from the only ones.

Like many entrepreneurs, I tend to be independent, idiosyncratic, and self-motivated. I like to do things my way, without much regard for the status quo. I was the kid in school who hated group projects, yet thrived on independent studies.

With Trogger, we had a team of three. We reached consensus on ideas, rather than moving forward unilaterally. On many occasions, I’d come up with a new, inspiring idea, only to get a knot in my stomach before pitching it to my team.

A single founder lacks the camaraderie and shared purpose that come from a team effort. These are important feelings, and difficult to give up. However, the solo path offers its own rewards: freedom, flexibility, and creative expression. These are some of the very qualities that brought me to entrepreneurship in the first place.

I cast no aspersions on team-based startups, which are proven, successful, and time-honoured. At the same time, a great company needs co-founders no more than a great painting needs multiple artists.

6) Narrow it down

Complexity creeps into startups like weeds into a garden. Good ideas often die the Death of a Thousand Features. A company often aims for a bullseye and misses the dartboard altogether.

To counteract these tendencies, narrow your company down until you can describe it in three words. Successful companies thrive by following a simple, easy-to-understand mission, especially in their early days.

Pick a three-word monicker and stick to it. While your execution may change, your premise should stay consistent.

7) Know when to let it go

Like communism, New Coke, and a sensible American health care policy, some ideas just don’t work, even when they should.

What’s the biggest cost of a startup? Time. Building an app, regardless of platform, often takes a couple months — sometimes more. The opportunity cost for spending time on a startup is, therefore, the time you could be spending on any other startup.

Time is your scarcest asset. Don’t waste it on an idea that isn’t going anywhere. When it’s time to walk away, bite the bullet and leave. Better yet, set up quarterly milestones that recognize conditions for failure (ex: “Under 1000 users with less than 5% monthly growth”), giving you a firm reason to cut your losses and move on.

Retrospect

After five months, Trogger ran out of money. Seeing no traction, and feeling stressed and frustrated, I decided to move on. My team shortly followed.

On the one hand, letting go of Trogger was easy — it was the obvious choice. On the other hand, it took a psychic toll. For a couple months, I doubted my aptitude, questioned my abilities, and second-guessed my choice to become an entrepreneur in the first place.

Sure, I’m stronger for it all, and grateful for the experience. But let’s be honest: failing is about as much fun as getting hit by a sack of bricks.

That said, it’s part of the entrepreneurial journey. If it happens to you — which it probably will — my advice is simple: confront it, accept it, and move on.

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Taking place Tuesday, October 27, SNAP Summit: FailCon brings together well-known founders and VCs to share personal stories on failure — how they’ve overcome it, and what they’ve learned in the process.

Learn more about FailCon Tickets & Registration

Christian is (now) the founder of Brickroll, an iPhone game review site. He took his lessons to heart, and built the company in a week, for a total cost of $287. You can reach him at csp@rfop.biz.