9 Things You Learn When Your Startup Crashes and Burns
Most business and startup conferences focus on successes and "how to" techniques. I attended an event in Atlanta this weekend that was definitely not that kind of conference. It's called FailCon, and it's designed especially for celebrating failures and learning from them. And, boy, was there a lot to learn.
Here are nine key takeaways from my fellow presenters:
1. Be Honest
Ashley Brammer from Southern/alpha, a startup news site that covers the Southeast, emphasized that entrepreneurship is a love/hate pursuit. You must be passionate about what you do and honest about where you are to understand what you should do next. By focusing on honesty you can filter the insanity that is often entrepreneurship.
This honesty may include realizing your idea might not be successful where you are located. Does the right type of ecosystem exist where you are to support your idea? If not, are you willing to move to pursue it?
2. Power Through
My favorite quote from Brammer's presentation was: "Entrepreneurship is like getting your first tattoo... It's awesome, exciting, irrational, and painful." She followed it up with advice on how to be successful: "To get through it, you have to just suck it up."
3. Your Market Has to Be Open and Ready
Have you ever heard of Patient Communicator? Probably not, as it is one of those startups that crashed and burned.
Jeff Novich created Patient Communicator to reduce the number of calls to a doctor's office and to create a paperless office. Patient Communicator was successful in Novich's dad's office as it dramatically improved his efficiency. But after a major push, including high-end press coverage and backing from Blueprint Health, a health-oriented incubator, TechStars, Patient Communicator only signed one customer.
The lesson: Doctors want increased revenue without changing their process. Novich's product focused on efficiency, not increased revenue, and required major change to office processes.
Just because you have a product doesn't mean you have a market for that product.
4. Cover Your Blindspots
An overarching theme of the day was making sure you have a rounded team. You need to surround yourself with other co-founders, employees, and consultants who can cover your blindspots. Every failure story could be traced back to a company blindspot that ultimately impacted the company, product, or services' ability to be successful.
5. Don't Sell Features
A good portion of my work is with companies that have underperforming B2B products and services. The No. 1 mistake these failing companies make was highlighted by Omer Dar of SocialBox and Brian Srikanchana of WorkReadyGrad. They conducted an informative B2B panel focused on understanding who you are selling to and understanding their underlying driver.
For B2B sales in particular, the people you are selling to are driven by preserving their jobs and by showing results. They don't care how cool your product is; they want to know how cool it will make them look to their peers and especially to their boss. You must sell the vision of how the future will be better for your buyer because of what you provide.
(Shameless plug: If you really want to understand your customer, you can get a copy of my book--"Laddering: Unlocking the Potential of User Behavior." I share the stories of why products and services were failing and what needed to be done to make them successful. I also teach you how to increase your own company's revenue through my proven techniques.)
6. Traditional Press Still Matters
In a world of constant content, Daniel Dickey and Simone Harvin from The Resource Guild spoke about how telling your story effectively through and to traditional press is still very important to moving your brand forward. While there is much focus on social media, it is only one part of your overall approach.
My primary research shows that more than 80 percent of customers are still strongly influenced by traditional media. Understanding the right placement for your targeted customer is key.
7. You Must Have Metrics
Quinetha Frasier from Social Mission Architects pointed out how important it is to face reality--failure will happen again. It's about how you handle the failure and what you learn from it in the future that is important.
The only way to learn from your failures is to have the right metrics in place to help you learn along the way. If you aren't establishing and watching metrics, how do you know what caused your failure and how can you prevent the failure from happening again?
8. Prepare for the Worst
Yik Yak is a social media network that allows users to post a message that any other user can see within a 1.5 mile radius--all anonymously. Yik Yak is intended to give all students on college campus a voice, not just those with the greatest number of followers or friends.
Regrettably, a high school student used the platform to post a bomb threat. As a result, Yik Yak had to figure out how to quickly shut the platform down and then implement geofencing technology to control the message flow, both initiatives requiring time and money.
Your company has the same risk, from an unhappy customer complaining to an inappropriate social media post from your staff. You need to have plans in place to react to the unexpected and you need the resources to support such an event.
9. Don't Let Timing Hold You Back
Starting a company or launching a product or service is all about timing, but no one can predict that timing. In fact, once you know the time is right you may have missed your market opportunity. So there's no use in holding back because you're afraid of failure.
Michael Tavani of Scoutmob told the audience, "Now is the best time in the history of the world to launch a company." So, what are you waiting on? Remember, you haven't really failed until you decide not to try.