Pawel Brodzinski on Leadership in Technology

Whatever it takes to lead a team, build a product, and run a business

Category: entrepreneurship

  • Lessons Learned: Startup Failure Part 2

    Last time I shared mistakes we made while working on Overto – startup which was closed down some time ago. Today another part – things we did right and are worth replaying next time I’ll be engaged in a startup.

    Setting up a company behind

    Setting a company, which is quite an effort in Poland, from the very beginning was really a good idea. All founders knew each other well so lack of trust wasn’t the main reason standing behind the decision. We just wanted to give ourselves a bit of motivation making it a real business. However thing we didn’t really plan was that we gained much credibility showing company’s details instead of letting people think the whole thing was created by some student during holidays and won’t be supported in any way in future. Seeing a company behind a service doesn’t guarantee you it won’t die but at least you can be sure someone cares.

    Long discussions before start

    Before launching the project we had very long discussions about what we plan to do and how we want to do it. Of course not every detail was checked but when I compare Overto to other startupish projects I was working on it was really well-thought at the beginning.

    Wide range of roles covered with our experience

    We had really good pack to run an internet service. Development, administration, user support – in all those areas we had experience from the past. There weren’t many things which could have surprise us. We weren’t forced to look for a specialist in any technical aspect of building our application.

    Working in the same place

    For some time we worked in the same building which helped much in decision-making process. We could all meet ad-hoc whenever something important had to be decided. After some time we spread among different places and suddenly we saw how much value was in working in the same office.

    Despite we invested some money to fund the project I don’t treat it as a loss. For experience I gained it was a low price. Another time when I’ll decide to jump to that kind of project chances of success will be bigger.

    First part of lessons learned from startup failure

    Whole Entrepreneurs Time series.

  • Lessons Learned: Startup Failure Part 1

    Some time ago we closed down Overto – startup I was involved in. It was a failure – pretty obvious thing since we’ve closed the service. Since we learn much on our mistakes I think a reliable analysis why the business have failed should be valuable for you. For the beginning things we screwed.

    No one working full time

    From the very beginning we knew none of people engaged is willing to leave their daily jobs to commit fully to the startup. We thought we’d able to run internet service after hours. To some point that was true. As far as nothing bad was happening with the servers and the application it was all fine. We were working on new features when we had enough free time. Problems started when we faced some issues with our infrastructure. We weren’t able to resolve issues on the fly and had several downtimes. You can guess how it influenced user experience. That also backfired on service development since we had to focus on current problems instead of adding new functionalities. Lack of person working full-time and being able to deal with maintenance and bug fixing was the most important reason of failure.

    Catching the market

    That’s partially a consequence of the previous point. Since we spent majority of our limited time on trying to keep the service running we weren’t able to catch the changing market. We needed to cover new areas to move the application to another level but we couldn’t complete ongoing development. The whole project stopped in beta version and for users it didn’t look like anything was about to change.

    Lack of marketing skills

    Thin line between life and death of internet service is a number of users. For the initial period of time the numbers were growing systematically. Then we hit the ceiling of what we could achieve effortlessly. It was a time to do some marketing. Unfortunately no one of us was skilled in that area. Even worse, no one had enough time to fill the gap. That would be another stopper if we dealt with the problems mentioned above.

    Business model

    We hadn’t checked very well a business model we set up on the beginning. We were surprised a couple of our features weren’t as unique as we’d initially thought. Ironically that wasn’t a big problem since we had a bunch of ideas how to adjust the strategy in a new situation. Anyway, you should plan to change your initial business model.

    Screwed chance of selling the business

    After we’d decided we won’t be able to maintain the service in the long run we had a chance to sell it. To make a long story short we screwed negotiations starting with way too high price. We thought more about how much work we put into the project than how much it can be worth for potential buyers. Things are worth as much as one’s willing to pay for them, no matter how long it took you to produce them.

    Waiting too long with final decisions

    I think that one is a bit sentimental. Since the service was our child we were reluctant to make a decision about closing it faster and limit losses. We’ve been tricking ourselves thinking that everything would be fine while we couldn’t get the application back to work properly.

    Second part of lessons learned from startup failure

    Whole Entrepreneurs Time series.

  • Almost Completed

    One of projects I’m contributing to is a micro-ISV service. Maybe it’s not the perfect example of micro-ISV, because at least several people are engaged. It’s not single-person business, but the basis is the same. Whole idea was in its origin a world-changing service (or close). The main person working on the idea is a guy who loves it and strongly believes that the service will be great success. The rest of team keeps adding new brainstormed ideas to current concept, keeping ourselves on fire.

    Just like most of micro-ISVs. Just like most of micro-ISVs which failed. I wrote some time ago that faith and will to contribute in the long run are essentials when trying to build a product or service as the micro-ISV. But that’s not all. Another factor which is probably even more important is consistency.

    I’ve seen different “micro-ideas” (like you can call micro-ISV’s ideas for products or services) which had potential at least to earn for themselves. I played my role in those projects as a co-author, as a supporter, as a user. Range of ideas was wide – from a very fresh look on Internet entertainment services to yet another communicator. All of them I can call (more or less) failures. None of them fulfilled author’s expectations in area of revenue, number of customers or users etc. Many weren’t even born to be shown to the world – they died during pregnancy.

    When you have your application completed in 90% it’s usually much less than halfway to successful release. And when you’re 90% completed all the fun is the past. You developed the most enjoyable and the most challenging parts of a code. You exploited all your creative ideas during design. Now you have to focus on boring little improvements of website. Now you have to force your creative soul to think how to make your customers happy instead of thinking how to enjoy yourself with the work. Now you have to fix all those unrepeatable tiny little bugs which allow your frustration to grow. Now you have to deal with The Boring Time. And if you allow yourself to become bored – you lose.

    90% of completeness is just the beginning of the road. In this case 90% finished often means 100% failed.