25 2 / 2013

3 Things I Did Wrong with My Last Startup

I had a startup that failed in 2009.  It was called Parrotview.  We built a social shopping web application that no one wanted to use.  It took a long time for me to be able to talk about this, but here are 3 things that I did wrong:

1) I didn’t build an audience. 

As the “business” co-founder, it was my job to get an audience for our product.  Lots of business co-founders think that they should just wait around until the product is built before trying to market it.  I thought that too.  But, even if you are waiting just a couple of months to build out a minimum viable product (MVP), that is still 2 months of your precious runway gone to waste.  Here’s what I should have done:

a) I should have started a blog with interesting, relevant content to attract my target audience.  Blogs take a long time to build a following, so starting early is important.

b) I should have started an email newsletter to go with the blog.  Blogs in themselves are only good if your audience continues to  come back to your site on their own.  Having email subscribers means that you have an instant audience every time you have a new post or a new message.  

This is what my friend Eric Bahn’s company Beat the GMAT did right.  Today, Beat the GMAT (recently acquired by Hobsons) is a social networking platform that attracts millions of prospective MBA students.  But, their first site was simply a blog that Eric used to show others how to solve GMAT problems, and it was just a blog that attracted a large initial following.  We tend to think that our initial product out of the gates should be cool and something we code or build.  But, Eric’s was just a blog.  

Writing a hit blog is tough and takes time even with good content.  But, the best bloggers I know just constantly write good content  religiously to build an audience, and it’s important to start on day 1.  

2) I didn’t get feedback from the right people. 

Building the right audience is also important.  Some bloggers incentivize people to sign up for their email lists with freebies and giveaways.  This can work wonders for attracting subscribers, but it’s also important to make sure that the subscribers are actually the right  audience.  My friend Ilya Lichtenstein built his company MixRank by offering his audience free consulting.  He spent a lot of time on this, but by doing this free consulting, he knew that he had a strong, relevant audience that they could get feedback from and would later launch their product to.  With my company Parrotview, we did actively seek feedback on our product but from totally the wrong audiences!  

3) I didn’t test the revenue model upfront.

Parrotview started out as a free consumer product where you could shop in real-time with your friends.  We didn’t test the business model.  It would have been nice to have been able to know that with X number of people, on average, Y people click on this or buy this to be able to have gotten a sense of what kind of business scale we were potentially looking for.  Obviously, consumer products often try to build for lots of mass (ala Facebook, Twitter, Pinterest), but realistically most consumer startups never get to that level and fail, because their somewhat-large audience size isn’t large enough.  So having a clue for what level of scale was even required would have been helpful.

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