Startup D.O.A

How often have you seen startups go down the following road?

1. A couple people come up with an idea. They’re excited. Really, really excited.
2. They get nervous about competition or people stealing their plans. So they get very hush hush.
3. They start building something. This usually involves locking themselves in a small, dark room with lots of caffeine.
4. They raise money quickly. It’s quite often a seed round to get them through to launch.
5. Lots of code is being written. Lots of ideas are on a whiteboard. People are pumped. And there’s money in the bank.
6. Development is taking longer than expected. Scope creep is insidiously sneaking its way in. Estimates are out of whack. But there’s no turning back.
7. They hire an extra person or two to try and accelerate things.
8. Money is running out, but motivation is still fairly high.
9. They launch! Time to party and await huge success.
10. No one cares.

Now at this point, or possibly around step 8 or so, some amount of panic has set in. It depends a lot on how much blind faith the founders are running on and/or how successful they are at convincing themselves everything is going to work out.

One of the huge problems is that the number of points of failure actually increase as you move through these steps. You’re not eliminating points of failure or risk, you’re adding to them.

This path towards launching a startup is what I would call: Startup D.O.A — Startup Dead on Arrival. It sucks big time. It’s painful to watch. It’s depressing and frustrating. And it’s extremely common.

Here are three major problems that too many startups end up facing:

1. Not enough systematic validation early on.

Validating a startup idea is a very big challenge in and of itself. But without some amount of systematic validation you’re flying completely blind. Some ideas are harder to systematically validate than others. Business-to-consumer web apps, for example, can be hard to validate. How would you validate a Twitter before it existed? But even in that case if you’re going exclusively on a hope and a prayer there’s a very good chance you’re D.O.A. We hear plenty about the success stories; a lot less about all the failures.

Please, please, please, please find a way to validate. Sit down with your co-founders and talk this out. Think about how you could validate. Think about who you should speak to. Don’t be shy. Get past the fear of rejection as quickly as you can. Please.

Please, please, please, please be rigorous about it and have the gumption to say, “We went through a systematic validation process and this isn’t flying. Let’s kill it now before we’re Startup D.O.A.”

2. Not enough money.

If you raise money for a 6-month runway you have to start raising a follow up round the next day. That’s because it takes ~6 months to raise financing. If you don’t give yourself enough time to launch and iterate thereafter to build up traction and measurable milestones, you’ll have a freaking hard time raising more money. This isn’t necessarily an argument to raise tons of money out of the gate, but it is an argument for understanding how to spend the money properly, launching more quickly (so you have time to reach better, measurable milestones), and not getting bogged down in trying to build massive systems that will be overwhelmed by scope creep. Solve small problems well. Start small, stay focused and have a clear value proposition. Make a frequent use product. Please.

3. Not knowing how to run a business.

First-time entrepreneurs generally don’t know how to run companies. That’s because they never have. It’s just the reality of the circumstance they find themselves in. Even people who have kicked the startup can a few times still have issues in this regard. It’s hard. Get help. As much of it as you can. Get good help. Recognize that you don’t know what you’re doing and find out who is willing to help. Please.

Being Startup D.O.A sucks.

You pour your heart and soul into it (and a lot of blood, sweat and tears … and money!) only to launch, fall down and not have the resources, wherewithal or strength to keep going. But there are ways you can change this. And now is exactly the time that you need to, even if that means massive shifts in your strategy, your team, your roadmap, etc. Change everything and anything that needs changing. Don’t wait and hope it gets better. Don’t wait and expect millions of people to visit your site and pay you. The sooner you make the change you need to make, the better your chances.