The decision to shutdown a startup or press on can be very emotional. In my last post, I shared that my team and I would have to make some very tough decisions around this time (now). Since that time, we’ve hit a major momentum wall after discovering that our product would be a vitamin and not a painkiller and that the switching costs of our potential clients was just too high.
What we did wrong:
1) We didn’t talk to enough potential customers. We did some initial customer discovery interviews, but the sampling size was too small. We should have spoken to more potential customers and asked them specifically how likely they would be willing to switch from their current vendor.
2) We assumed that design and user experience would trump the old guard. The incumbents in our space had a late 80′s look and feel, and we were sure that our fashion and design conscious clients would flock to a better solution if you did nothing more than improve the aesthetic.
3) We did not start selling early enough. We focused on design and the user experience early on and validated our direction with client discovery interviews, but we should have started selling to gauge true interest before any of that.
Those are a few reasons that our startup is joining the list of failures, but even as I sit here thinking about the social media and other accounts to shutdown, it’s hard actually bringing myself to do it, but it’s time to let ‘er rip and pull off the bandaid.
There’s consistent advice on the most important part of starting a business is to actually start. In that process, there’s a lot to learn about building a business that solves a problem, customer discovery, building a great team, building a product that customers will love, finding product-market fit, building a repeatable customer acquisition machine, and the list goes on an on. There are several blogs/sites with the best recommended approach to be maximally efficient and not waste your most precious asset – time. In general, you want to build a successful business with traction quickly or fail fast (12-18 months).
As an after hours entrepreneurs, we must hold our selves to the same level of accountability for our time. My team and I are at the 1 year mark now and will have to make a decision whether to press on or not within the next 2-4 months. It’s been an amazing journey so far with tons of lessons learned and plenty of hindsight. There are no shortcuts to entrepreneurial success, and we took a few of them. I’ll highlight a few of them along with the lessons learned over the next few days. Over the next few months we have to press to get back on the right track.
There’s been a lot of buzz around cofounders in the blogosphere – do you need a cofounder? what are your chances for success as a solo entrepreneur? how do you find a technical cofounder? are technical cofounders needed? and on and on. One thing that I have not seen discussed though is the importance of the personal finances of your cofounders.
Starting a company is risky and often founders put their personal and family finances at risk by founding a startup. Before deciding to start a business with someone or bringing on a cofounder, you should be aware of their personal finances. Their personal finances should allow them to take adequate risk without becoming a financial burden on the company based on the timeline for execution of the startup and expected revenue or funding.
In one of my previous ventures, an instrumental cofounder ran into severe financial issues as a result of the down turn in real estate unrelated to the business. We had just completed selling our first batch of inventory with the second batch on the way when we found out about his financial struggle. After crunching the numbers, we decided that it was best to wind down the business and let him focus on saving his real estate holdings since that was his sustaining income. If we continued to operate the business, then his personal financial problems were most likely to become a burden on our startup which was already in a very competitive market. It was a tough decision to make after investing a little over a year into the business, but it was the right call to make.
If being an entrepreneur is difficult, then being an after hours entrepreneur is orders of magnitude more difficult. Downtime and relaxation time are minimal or nonexistent, and I find that my patience wears thin easily when I feel like my time is being wasted which can and has lead to some a**hole moments.
It’s not that I’m trying to be rude, but I have a time clock in my head that’s ticking because every moment that I’m not grinding the probability of something getting delayed or not being finished on time increases. Last week, there was a going away celebration for one of my colleagues and I had to pick up my daughter from school. So, I planned to stay 15 mins tops. I consider myself sociable by nature and the thought of me going in and out in 15 mins was very uncomfortable for me. I set my timer for 15 mins before entering the venue. I spoke casually and briefly to my fellow coworkers but I spent a majority of the time with the newly departed colleague.
I was out in under 15 mins and it felt DAMN good. It was like a pressure valve or social properness had been released. As after hours entrepreneurs, we have to make every moment count – every meeting, every coding session, every minute of family time. Be in the moment and make them all count.
There are tons of great productivity and project management apps out there. Two of my favorite are Trello and Asana. They both have great features and are simple yet robust enough to handle large projects with ease. I love the visual representation of Trello and I love the absolute speed of data entry with Asana.
For a while, I’ve used both to manage various tasks and aspects of projects. More recently, managing both has become more cumbersome as my projects and tasks have grown. So, I was forced to make a decision to use only one of them. It was a tough decision because both are such great tools. But in the end, I decided to go all in with Trello. The data entry is not as fast as I like, but the visual representation of a multitude of projects is easier and more intuitive to grasp in a glance than with Asana.
By focusing on one tools, I spend less time reviewing and syncing up action items and more time getting work done. If you haven’t given either a try, then you should. But be sure to choose one but not both. You’ll save yourself time and headache.
In an interview, Reid Hoffman – founder of LinkedIN – went through a fairly methodical and practical analysis of his options and resources after the failure of socialnet.com. One of the things that really stuck out to me during that part of the interview (sorry, can’t find the link at the current moment) was his worst case analysis if LinkedIN did not work out as he hoped. He knew that he could move in with his parents for a few years and get back on his feet. He in essence had a safety net.
In a recent blog post, I stated that fear should not be an option that is holding you back from working on your start up all hours. I would like share my main reason for not taking the plunge all hours. My wife and I come from single-parent working-class households. Our parents do not own their own home, but instead, they rent small one bedroom apartments. They do not have significant retirement savings or nest eggs. Many of our other family members are in similar if not worse situations. Additionally, we are transplants in Atlanta with no family support system. My worst case analysis for my family of four is homeless after 6 months of emergency fund usage. We may be able to crash with a few friends here and there for a couple of months, but that’s about it.
Having a safety net, even a room in a basement that you can crash in for a year or so to get back on your feet, is a huge bonus if your an entrepreneur. If you have a viable safety net, use it to your advantage!
The opening weekend of NFL games were brewing with excitement and the social sphere was buzzing about surprise performers and sleepers that came through in a big way. It seems as if everyone and their little cousin is in at least one league and the devote fans are in an average of 2-3 leagues. I absolutely love the game, competition, and rivalry that comes with it. I routinely participated in 3 leagues, watched every game available, and woke up at 3am on Monday and Tuesday to dive into the stats and pick up any sleepers or players with breakout potential.
Notice that I used past tense. I quit my fantasy leagues 2 years ago and went completely cold turkey from football for the 2011 season (only watching ESPN highlights). In January of 2011, our pastor challenged us to give up something for the year that was consuming too much of our time. Football and my fantasy leagues immediately came to mind. I struggled with it and actually was hoping for a lockout in 2011 so I would not miss any games and live up to the challenge – sad I know. I went threw withdrawal for the first 3 weeks and missed some great games, but it became easier as each week passed.
During that time, I decided to start seriously developing the idea for a new business that was the inspiration and genesis for my current after hours startup. Looking back at it, I seriously think that we would not be any where near moving from idea to execution had I not quit fantasy football. As an after hours entrepreneur, time is your largest disadvantage and by quitting fantasy football and limiting the games that you watch (I’m at a 1 game per week limit), you may be able to at least level the playing field on Sunday. Work your butt off on Sunday while others are watching and distracted by the games and you’ll gain ground on the full timers.
I recently watched this CNN video with Sara Blakely, Founder of Spanx, and she views failure as life’s way of nudging you in the right direction. If you don’t know the story of Sara Blakely, then take some time and learn about her success and her struggles. It’s a great story of of hustle and perseverance. She also revealed that her father would ask her and her siblings to share one thing that they had tried and failed every week. Mr. Blakely actually encouraged his children to fail and was disappointed when they did not have something to share. He understood that by making failure a requirement that his children would be open to try new things and become comfortable with taking risks.
As an after hours entrepreneur, why are you holding back? What’s keeping you from making the leap from after hours to all hours? If the root of your answer is fear, then it’s not a good reason. If the only thing holding you back from going to all hours is fear, then make a resolve today to eliminate your fears and set a date to make the conversion to all hours. Fear is not an option
My most used command for Siri is to set the timer. I set the timer as I time box tasks throughout the day and for the small jobs and responsibilities that my children are tasked with daily. I have this uncanny ability to be able to tell you what time it is (usually within 5-10 minute accuracy) even if I have not looked at a clock for a couple of hours. It’s almost as if I can feel the minutes tick away. My wife, unfortunately, does not have the same relationship with time , but somehow we manage.
As an after hours entrepreneur, it’s a must that you have great time management and focus on your key milestones. David Cummings has a good post here that outlines a general timeframe for the first two years of a startup. Does that mean that you should take 4 years instead of 2 years since you’re building after hours? ABSOLUTELY NOT! That means that you need to be even more in tune with the momentum of the company and the velocity needed to hit your milestones. And even quicker to make adjustments, pivot, or pull the plug if things are not progressing according to schedule.
One of the key elements of success for a startup is timing. It can’t be planned, but when certain factors and forces make it obvious that the time is ripe or soon-to-be-ripe, you have to be ready to take advantage of the opportunity and not getting ready. My grandfather would always tell me that time waits for no man and the same it true for startups. So, cut back on the startup events and gatherings and push the gas!
For the last couple of months, I’ve been thinking a lot company culture. I’m a tech guy by default with 2 other technical/design founders, and we had a disagreement that led us to a place that it should not have. Nothing major just a disagreement turned snarky. Before this incident, I thought that culture would be something that we work on once we grew to a certain level and add more people, but this incident made me stop and seriously think about the company culture that we should create. Sam Walton is one of the best entrepreneurs of all time and he created a unique and strong culture that still exists at Walmart today. There are several examples of current CEOs and founders that have created great cultures for their companies and attract top talent.
So last night, we went full bore with the discussion of company culture and one on my cofounders stated that we were spending too much time on it and should be focusing more on the core product. Ironically, we spent about an hour in conversation the day prior about how she hated her full-time employer’s company culture and one of the managers stated that it was something that they could work on later. To which she disagreed and tried to convince him that they will not attract top talent if the culture is not addressed. In fairness, they do have some serious issues which I’m sure went unchecked and have grown overtime. So, instead of waiting, we’re going to focus on company culture now so that it’s strong as the company grows and others join.