Not many founders are willing to admit that their startup idea isn't working, especially at the early stage. It's very easy for entrepreneurs to fall in love with their idea and forget about the fundamental numbers that matter. On the flip-side, most startups don't really achieve hockey stick growth for at least a few years.
Having said that, it takes a lot of honesty to kill your startup idea early on but sometimes, killing your startup early on can open new doors that you would have otherwise missed. A good example of this would be the story of Apu Gupta and Curalate, an image-analytics company that has raised over $12 million in funding and works with over 700 companies including Nordstrom, Target, Gap, Urban Outfitters and more.
I got to sit down with Apu, who shared with me the Curalate 30-day pivot story. Here are the five biggest lessons he learned as he went from from failed startup idea to a $12 million venture-backed company.
1. Kill a startup early if you have to.
Prior to starting Curalate, Apu and his cofounders had been working on a different idea called Storably, which was supposed to be the AirBnb for storage. AirBnb had just raised a million dollars at a billion dollar valuation. However, things wouldn't go as smoothly. While Apu and his cofounder Nick Shaftan would raise a seed round from NEA, First Round Capital and MentorTech Ventures, Storably would launch in Philadelphia and hit a slump, burning money without enough traction. After calculating the numbers that they had to hit, the team realized that there was no way they were getting there in time before their funding would run out. So they decided to go back to their investors to shut Storably down. This is what Apu called, "Probably the single best thing we did."
While Apu and his team would go to their investors to return the remaining cash, the investors, including First Round Capital Founder Josh Kopelman would decline and tell them, "We invested in you guys so go figure it out. Figure out what you want to do next but do it in a month."
2. Validate your market as early as possible.
With thirty days to figure out the winning idea, the Curalate team went to work. Apu, Nick and Brendan spent the next seven days thinking of ideas and recording it in a Google document. By the end of seven days, they had 70 ideas they were interested in, which they then shortlisted to seven and started testing a few of them.
One of the ideas they tested was an application that was a play on LinkedIn called DrinkedIn which matched professionals with other professionals they could grab a drink with. Apu shared with me, "We built that in less than 3 hours. We found a stock image and bought it. Put up a webpage and had a connect with LinkedIn button. There were all these glorious promises like our algorithms would connect you to people like you but the truth was, our algorithm was an intern."
Their intern printed the profiles then manually matched each person who applied. Surprisingly, this idea would gain traction, with people from all over the world tweeting about it. However, the team didn't know how to monetize this nor were they super passionate about the idea. But they learned something very important-how to quickly test an idea and build a product out.
3. Timing is everything.
After testing their first few ideas, the team would eventually agree on working on an image analytics platform for Pinterest that would eventually become Curalate.
Apu shared, "Every other idea we were looking at didn't need to be started today. If we didn't start DrinkedIn right now, DrinkedIn could be started later. If we had any hope of winning, it had to be started right now. In tech, it is very rare that you get to start a company in a space that doesn't exist. There was nothing in visual analytics and there was nothing in visual marketing that existed 3.5 years ago. We were the first and that also motivated us."
Where did the idea come from? Back in late 2011, Pinterest was starting to blow up and people were going insane about the platform. Apu and his team realized that logically, brands would eventually want to follow consumers in Pinterest as well. Thus Curalate was born. At that same time, people were building analytics tools for Twitter so Apu figured that people would eventually be building analytics tools for Pinterest.
Apu shared, "Fundamentally consumer behavior was changing and consumers were beginning to communicate with pictures rather than words and that was really fascinating to us." Yet, the web itself was never engineered to parse pictures, it has always been made to parse text. Apu and his team saw this and decided that they were going to jump in and create an industry around image analytics. Today, they work with over 700 of the world's biggest brands around the globe with 95 employees across 3 offices.
4. Do something that you believe in.
Apu shared, "I see a lot of people start companies because it's a cool concept and they really want to start something. The first motivating factor for them is I want to start something but you have to ask yourself why. Fundamentally why do you want to build this thing."
For Apu, building companies is his creative outlet. He mentioned how he doesn't draw, paint or play instruments or sing songs but he has a very high need to feel creative. He shared, "I get really restless when I'm not creating something. This is as close as I can get to exercising my creativity. You have to really think about why you want to start a company. Make sure it's something you really believe in. You need to imagine a realm where you can do this in 8 years. Do you have the stamina to do this idea for that length of time."
5. Startups eventually become all about people.
Eventually it becomes all about the people. While early on, like a lot of founders, we're product people. But as you scale, suddenly you get multiple employees and it becomes all about them and their needs. How do you coach them? How do you bring out their best?
Apu shared, "It's (startups are) messy and infuriating at times but it's incredibly rewarding. For both my cofounder and I, the biggest reward isn't a financial reward. To us the biggest reward would be if we can instill within our employees the skills needed to become the next generation of successful entrepreneurs. Our organization is all about insights and giving people insights and educating them. I want to see a lot of entrepreneurs come out of this. Just like how there is a Paypal mafia, I want to see a Curalate mafia. You know, maybe one day, we'll produce the next Elon Musk."