Mis­takes, I’ve made a few: what I’ve learned in the first year of my startup

Irish Independent - Business Week - - Technology -

WHEN I started to write this startup di­ary nearly a year ago, one of the main top­ics that quickly emerged was our news­let­ter strat­egy. In think­ing very care­fully about how to avoid mak­ing the com­mon mis­take of build­ing a soft­ware prod­uct that no­body wants to use, I came across the strat­egy of us­ing a news­let­ter to val­i­date your po­ten­tial cus­tomer base. You can read all about the plan­ning and think­ing that went into that de­ci­sion in the early ar­ti­cles in this se­ries.

Now, a year later, it’s time to re­view the news­let­ter and per­form a ret­ro­spec­tive anal­y­sis of the de­ci­sions that went into its ex­e­cu­tion. Some of these de­ci­sions were good, and some were bad.

We’re build­ing an event-man­age­ment plat­form that not only serves the needs of tech­ni­cal con­fer­ence or­gan­is­ers, but also speak­ers and spon­sors. Since there’s very lit­tle in the way of soft­ware tools out there for speak­ers, that’s where we’ve de­cided to start. Our hy­poth­e­sis is that there is un­sat­is­fied need among speak­ers for bet­ter ways to man­age their in­ter­ac­tions with con­fer­ences.

I came by this idea be­cause I am a con­fer­ence speaker, and in the very best busi­ness tra­di­tion, I’m ‘scratch­ing my own itch’. I had good sub­jec­tive ev­i­dence that the need ex­isted – I was spend­ing too much time on event pa­per­work, re­search, plan­ning, and com­mu­ni­ca­tion. I would ex­change an av­er­age of about 20 emails with each con­fer­ence, all about the same things: pho­tos, bi­og­ra­phy, talk de­tails, diet pref­er­ences or needs, and that’s be­fore you get to crit­i­cal stuff like when your pre­sen­ta­tion needs to be sub­mit­ted.

But just be­cause some­thing an­noys you does not mean there’s a busi­ness there. A gap in the mar­ket does not mean there’s a mar­ket in the gap, to quote an old saw. I needed to find a way to val­i­date the hy­poth­e­sis.

I launched a news­let­ter for tech­nol­ogy con­fer­ence speak­ers to do this. If I saw rea­son­able and fast pickup, and sus­tained in­ter­est, then it would val­i­date that speak­ers are rel­a­tively un­der­served. It would also let me build a com­mu­nity and reach out to that com­mu­nity to get ideas for mak­ing speak­ers lives bet­ter.

I didn’t want to start yet an­other mar­ket­ing news­let­ter try­ing to flog some­thing, so I de­lib­er­ately chose to make the con­tent high value and fo­cused on speak­ers needs, and keep our brand­ing and mes­sag­ing very much in the back­ground. The news­let­ter had to pro­vide ac­tual value to read­ers, and ad­ver­tis­ing, in gen­eral, does not do that.

And it was a suc­cess! By Jan­uary this year we had reached 500 sub­scribers and es­tab­lished a good weekly pro­duc­tion process run by our mar­ket­ing team. On the back of that suc­cess I de­cided to dou­ble down and in­vest in get­ting a sub­stan­tial num­ber of sub­scribers in 2018.

Based on the feed­back we were get­ting, we knew the con­tent worked, so we could tick that box and be happy that our con­tent was go­ing to be use­ful to many more peo­ple. I’ve al­ways con­sid­ered the news­let­ter to be our first prod­uct, and I’m very proud of what we’ve cre­ated and sus­tained. Even though we don’t charge for the news­let­ter, read­ers still have to de­cide to subscribe and they have to de­cide to read, so we still have to ‘sell’. Just be­cause some­thing is free in mone­tary terms does not mean it is free in terms of peo­ple’s at­ten­tion – which is in very short sup­ply these days.

Our pro­mo­tion up to that point had been pretty ad hoc, mostly us­ing our net­works. We de­cided to start a struc­tured pro­mo­tional cam­paign on LinkedIn, reach­ing out to speak­ers, en­gag­ing them in con­ver­sa­tion, and see­ing what they though of our lit­tle news­let­ter. This turned out to be very ef­fec­tive, and as we’ve re­fined our process, very pre­dictable and re­peat­able.

As of to­day, we’re at 3,113 sub­scribers, and av­er­ag­ing about 400 new sub­scribers a month. Since launch we’ve had 463 read­ers un­sub­scribe, and if we av­er­age that out, that’s about 40 un­sub­scribes a month, so we have a net growth of 360 sub­scribers month. This is pretty con­stant, so we’ll reach 5000 sub­scribers by year end if we just con­tinue as we are. Our open rate this week is 14pc and our life­time av­er­age is 16pc. The in­dus­try bench­mark, ac­cord­ing to Mailchimp, our email de­liv­ery provider, is 10pc, so that’s great val­i­da­tion for our con­tent.

This is won­der­ful, and some­thing to cel­e­brate – a suc­cess­ful prod­uct. At the start of the year this was al­ready clear.

I got ex­cited, and made a ter­ri­ble mis­take. One of the things you have to do as CEO is set goals for your team. The busi­ness has to grow and you have to make that hap­pen. It’s no good set­ting goals that are easy to reach. That’s de­mo­ti­vat­ing as there’s no chal­lenge. Com­pla­cency is ex­tremely dan­ger­ous in any busi­ness and usu­ally fa­tal in a startup.

Star­tups, by def­i­ni­tion, are not mak­ing any money (yet), and thus ev­ery ac­tiv­ity ‘burns’ money that will even­tu­ally run out. You have to get to the next mile­stone to sur­vive and the only way to do that is to be very care­ful how you spend the fi­nite amount of money left in the bank. It’s not good enough just to have grow­ing user num­bers: in­vestors also look at your fi­nan­cial dis­ci­pline. As much as pos­si­ble, ev­ery penny should go to­wards growth.

I’ve read a lot of busi­ness books (most of them are bad), and lis­tened to a lot of busi­ness ad­vice (some of it rel­e­vant), and thought a lot about strat­egy (not all of it fan­ta­sis­ing) and when it comes to goals, the best ap­proach is to set ones that stretch your team, are very am­bi­tious, but not im­pos­si­ble. This makes the stakes real, forces your team to be in­ven­tive and moves the busi­ness for­ward. The goals have to be cred­i­ble. I’m sure you’ve also seen the old acro­nym that goals should be SMART: Spe­cific, Mea­sur­able, Achiev­able, Rel­e­vant, Time-bound.

Star­tups are sup­posed to be in­no­vate and push bound­aries, but it’s a mis­take to push the bound­aries on every­thing. A more ef­fec­tive strat­egy is to choose one or two things where you think you can do bet­ter, and fo­cus your in­no­va­tion en­er­gies. Do­ing new things is re­ally hard, and you’ll make lots of mis­takes. For every­thing else, just fol­low nor­mal busi­ness tech­niques that have been proven to de­liver over many years.

De­spite know­ing all this about goals, and de­spite hav­ing prac­ticed rea­son­ably good goal-set­ting in pre­vi­ous man­age­ment roles, I got very ex­cited about the po­ten­tial of the news­let­ter and set a silly, un­achiev­able goal: 40,000 sub­scribers by year end.

Un­achiev­able goals are just as de­mo­ti­vat­ing as easy goals and I should have known that. Why did I do it?

There are two lev­els of les­son here, and both are im­por­tant. At the lower level, I saw that one re­peat­able pro­mo­tional strat­egy could de­liver pre­dictable growth and I rea­soned that the ap­pli­ca­tion of more such strate­gies would eas­ily give us suf­fi­cient growth to meet the tar­get. I was ex­cited about how easy this seemed.

What was the mis­take? While ex­e­cut­ing all of these new strate­gies was cer­tainly go­ing to take us a long way to meet­ing the goal, it would have taken the ef­forts of the en­tire com­pany to op­er­ate them.

In ad­di­tion to the news­let­ter, we had the small mat­ter of build­ing and launch­ing a Min­i­mum Vi­able Prod­uct (MVP), and start­ing pri­vate cus­tomer tri­als. I fool­ishly for­got that we couldn’t do all the cool things we wanted to. Just be­cause you can ex­e­cute a plan, does not mean that you will have to re­sources to do so. Just be­cause some­thing is a good idea, does mean it is pos­si­ble.

On re­flec­tion, this hap­pens a lot in star­tups – founders are, by def­i­ni­tion, op­ti­mistic, and that is a nec­es­sary at­tribute. But at the same time, you can’t let your ex­cite­ment blind you to the re­al­ity of lim­ited re­sources. You al­ways have to ask what is the most ef­fec­tive thing to spend money and time on, and adjust your en­tire strat­egy and goals to ac­count for that. Star­tups are hard.

The higher level les­son is more im­por­tant. Startup founders should not make de­ci­sions alone.

At that point in the com­pa­nies his­tory I did not have co-founder (I do now, thank­fully). I did not have ad­vis­ers (I do now, also won­der­ful), nor had I built up the team suf­fi­ciently for them to ques­tion my mad­ness. Yes, at the end of the day, you will have to sim­ply make the call – lis­ten to ev­ery­one, but still de­cide any­way. But you do need help.

The prob­lem is that it is very easy to ra­tio­nalise any de­ci­sion. Just go read my ear­lier ar­ti­cles on the news­let­ter strat­egy. (They’re all very con­vinc­ing.)

De­ci­sion-mak­ing in a low in­for­ma­tion en­vi­ron­ment is a dif­fi­cult and dan­ger­ous game and even when you know about mis­takes, and have avoided them be­fore, it does not mean you won’t make them again if you are blinded by en­thu­si­asm. All crit­i­cism of your idea has a valid ker­nel – use it to make bet­ter de­ci­sions.

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