Over last few years I have worked with many start-ups and entrepreneurs. Over a period, I have learned many things which make complete sense but are generally overlooked and start-ups fall in same pitfalls again and again. This is not to say that I am a guru or any better than anyone. But the things mentioned below are just the culmination of thoughts from last few years.
Data is oil
Not knowing about how your users use the product is like driving in dark without brakes and it is not at all cool. Someone said to me “what gets measured gets improved”. Generally, people think that installing google analytics and seeing some numbers is measurement. It goes much beyond it. It’s about knowing what your users are doing on your product and what are the pain points you are solving.
“Trust is good but control is better”
Decisions based on the wrong or half-baked data can be disastrous for the business and kill the business. Start-ups are always full of energy and pumped up, and unrealistic revenue projection can lead to a wrong hiring decision which can kill the business and there are thousands of examples like this.
Hence make sure you measure whatever you do; right from the product usage to the effort people put in, to all the output metrics for the business.
Growth vs Experience
Now you have your data in place and hence you can take the right decision. You come to know that certain features of a product are not showing the expected behavior but you have a growth target. Now generally people get into a dilemma.
I must show growth to a certain set of people, but if I do that new user should go through the broken experience which can lead to a bad experience and restrict growth. Believe me, people have gone behind growth and eventually came back to fixing the consumer experience. So here is your answer.
If you keep spending money on growth while having a bad experience, you have a better chance of winning by putting all your money in a bet with 50% chance of winning.
In the new age businesses, all people want to show is the number of website visits, app downloads etc. rather than repeat and paying customers. Given a choice of 10 paying customers and 10000 visits, what would you select? I hope the latter as it is the money which runs the business.
If you agree with above, then why we spend hefty amounts on marketing and acquiring new users on websites and app rather than optimizing the product to retain the users. Closing the gap between the patterns among people who churn and people who don’t will create a lot of impact on the business.
Experiments are key to success
If we stop experimenting, we stop being innovative in finding the solution to the people’s problem and hence we lose out on so many opportunities. Experimentation must become routine as we learn more from our failures than success.
Founders generally want to control everything at the start which is good and helps as no one knows the product and its philosophy better than you. But there comes a time where you should let go and if you don’t you lag in the race and lose out on many things. Hence always prepare a second in command to move up the ladder and make sure that you are running at a decent speed.
Every single person in the team should be involved in growing the company on a weekly basis. Challenge everyone to come up with experiments within their own responsibilities and let them challenges others ideas.
Never put all your eggs in one basket. You have developed an awesome product and you are generating good revenues from it. But there is saturation in every market and hence of you don’t diversify at the right time you can be in trouble. Hence having at least 2-3 options in whatever you do will always give you an upper hand.
Revenues are validation
If somebody is paying you means they are finding the value in you and this is the biggest validation of what you are doing. This makes the business sustainable in long term. If you only focus on growth you may end up becoming a billion-dollar company but in the real-world valuations are nothing and revenues are everything and hence you should have revenue model from day one. If your users don’t want to pay from what you should offer, then either you are targeting wrong customers or the business is not sustainable.
Customer Support is the key
Generally, start-ups believe in acquiring new customers but in a way, do not focus much on the existing one if the product is very easy and do not require support. The one who build the product always finds it easy but that may not be the case. Some of the start-ups who have grown substantially are the ones who always focussed on customer experience.
In a cut-throat, competitive market, it’s the experience that makes your growth exponential but all you need is patience which every one of us lacks.
It’s ok if you don’t know something
The know it all attitude is something which is common in most new generation entrepreneurs. At times, it may be necessary to pretend that things are working but never lie. Truth can be ugly sometimes but in long-term, it will always help.