Startup Lessons Everyone Should Read
Here’s a sampling of some great startup lessons worth reading about.
- Your Pitch Sucks. Patrick Lor lays it on the line very succinctly with his post about bad VC pitches. He must have seem some really awful pitches, cause he’s normally quite a “nice guy” blogger. Regardless, every point he makes is correct; they’re not easy lessons to learn necessarily, but he’s right. For some further advice on pitching VCs, I’ve written a couple posts: 5 Quick Tips on Pitching Angel Investors and Venture Capitalists and 5 Lessons Learned from Pitching VCs.
- Does Revenue Matter? Mark MacLeod asks this question in one of his recent posts at StartupCFO, and if you’re running a startup, or thinking about it, you should absolutely read this. Every startup struggles with issues of revenue, and many startups (especially in the consumer Web 2.0 space) don’t focus nearly enough on it. Mark makes some key points about the difficulty of raising capital without a credible business model or revenue traction. But equally, he describes the fact that most acquisitions aren’t made based simply on a multiple of revenue. So how important is revenue? And how quickly should you focus on generating revenue, and then scaling it from there? Great questions…
- What Not To Do. Here’s a list of 17 mistakes commonly made by startups (written originally by John Osher). The first two mistakes listed are “Failing to spend enough time researching the business idea to see if it’s viable” and “Miscalculating market size, timing, ease of entry and potential market share”. I would argue that in the Web 2.0 startup world, most startups barely make any attempt to figure out if their idea is viable and then look at the market size. Web 2.0 startups are moving and launching too quickly for that, right? I don’t think we need to bring back the era of 40-page business plans, but completely ignoring these kinds of issues before jumping into your startup is just asking for it.
Re-reading these posts, it’s clear they definitely have a negative bent to them (at least the first and third), but that’s in no way representative of how I’m feeling. Nevertheless, it’s worthwhile to be the recipient of some straight, honest talk from time to time and really learn from the experience and failings of others.
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A hard smack in the face is necessary now and again if you are going to succeed at the startup game. Bootstrappers, especially those new to the game, tend to fall just a little too in love with their ideas. What each of these posts shares is how to call your own bluff and realize that perception is more important than invention.
If you can take the harshest of criticisms, listen then adapt, and keep on moving forward, you are probably an entrepreneur with a good idea.
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Of course revenue matters. If there is no revenue at all, that means there are no sales. If there are no sales, that means there is no demand. If you cannot sell, you're out of business. Period.
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-Ingram
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I'll get the pleasantires out of the way firstly - you have a truly great blog and the them is brilliant. Where did you get that??
As for the above post:
1) Your pitch sucks points are very valid. I am a firm believer of pitching with confidence and pitching what you know. I dont really like the word pitch but some great pointers are made.
2) In my humble opinion , this is a bad question. I agree with salinevance that this is a no brainer really.
3)Boy have I made some of those mistakes in the past. I totally agree that a great number of startups fail through lack of knowledge to start. It does take more than an idea to make a success. Failing to plan is planning to fail after all. As you so nicely rounded the post off....THE single biggest failure an entrpreneur or budding businessman can make is to not learn from their (or others mistakes) dont pretend like you are not going to make any becasue you will and you know what...it will be worth it if you learn a lesson I assure you.
@Trucker: Profit is the obvious goal you should work toward but that is not to say revenue does not matter!!!!
@ Karl : Wise words :)
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@TruckerID: Revenue is certainly critical - but revenue still matters. If I make $10 and have $1 in cost, that's $9 in profit. Great percentage, but unless that scales ... I don't have a good business.
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A project of mine, BizUnite.com, recently entered the private beta phase and I'm really excited about it. From the onset, our team was aware that we weren't the world's top independent business experts, so we partnered with an SMB powerhouse, one with over 20 years of listening to, working with, and helping independents. Just to make sure we were getting their needs right and feeling their pain.
So, I'd definitely recommend a similar partnership to other startups.
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