4 ms·

Got customers? How we almost sunk our startup before it started.

25 points by ryanwaggoner 17y ago

dotcoma 17y ago
hard not to agree, isn't it?
ryanjmo 17y ago
I did that too. Oops. But it was actually Paul Graham's essays that made me realize I was doing the wrong thing. Oh, well it was only about a year of my life I wasted, I'm not bitter at all... seriously. Did anyone else make this mistake? How did you realize what you were doing was the complete wrong approach?
- ryanwaggoner 17y ago
  Author of the post here. You can take some solace in the fact that some entrepreneurs never seem to learn this lesson, and fail repeatedly until they stumble into a success by chance. I touched on this in the article, but I think the VC industry can be blamed for some of this. If you start a company and raise a few million and hire a team and spend two years blowing through your cash before shutting down, it's easy to blame "execution" or hiring the wrong people, or whatever, rather than face up to the fact that you went down the wrong road from the beginning because you had a poor product/market fit. Success is a poor teacher.
  - ryanjmo 17y ago
    Well luckily for me I did not have success ;)
josephruscio 17y ago
Missed a 4th reason for a lack of customer development: 4) Hard to get meaningful face time with customers and/or get honest, well-thought out responses from them, particularly hard for a brand-new startup without existing customers on existing products. Customers are very busy people too, and they are not on your payroll. Totally agree that you should make your decisions as informed as possible, i.e. do as much Customer Development as you can, but ultimately a big part of a early-stage startup is making decisions without the luxury of a complete data set i.e. gut and luck. Which is precisely why you need to "ship early" (get paying customers ASAP) and "ship often" (start developing them immediately and incorporating their feedback into development).
- ryanwaggoner 17y ago
  Agree on ship early/ship often, but most of the startups I've observed (granted, a small sample) didn't skip customer development because potential customers wouldn't call them back. By and large, I think most folks are willing to sit down with you for a cup of coffee for 30 mins and talk about their needs and how your product could help, especially if you make it clear up-front that this is not a sales call. YMMV, but we've had great success with just sending an email or picking up the phone and asking people if we could chat for a bit.
  - josephruscio 17y ago
    Agree that most people who skip CD are doing for lack of trying ;-). I think the ease of gaining access depends largely on the target customer profile. Consumer, even SMB targeted stuff by definition has a large number of potential customers compared to the Enterprise. Additionally their barrier to purchase is much lower than the Enterprise, therefore the signal from your 30 minute cup of coffee is much stronger. It's a trickier proposition with Enterprise customers, but I guess that's why the deals are bigger.
- gbookman 17y ago
  >Customers are very busy people too, and they are not on your payroll. Sometimes I wish they were on payroll, especially customers who left. One frustrating thing I've learned is that people hardly ever tell you why they stopped using your product or lost interest in it.
futuremint 17y ago
I've been a part of two startups, neither of which did anything remotely like "Customer Development". The one was consumer oriented, and they sort of stumbled through the launch of a prototype that was built to scratch their own itch (i.e. they were their own customer, so they kind of knew what it needed). The 2nd still has very little revenue and I would say is still struggling to align with the customer. They've spent many years now developing a product that they think will fit the customer based on their experiences working in the target industry 10 years ago. Its a little scary to watch this company spend their money after only showing a mockup to a customer once, about 3 years ago. This 2nd company is starting to get paying customers, and then they panic when the customer says, "Wait. It doesn't do x, y, and x? I assumed it did, I mean, everyone in our industry does that! You didn't know that?" I'm curious to know how these 2 companies would be different had they done solid customer development first.
deleted 17y ago
[deleted]

25 points by ryanwaggoner 17y ago

hard not to agree, isn't it?

I did that too. Oops. But it was actually Paul Graham's essays that made me realize I was doing the wrong thing. Oh, well it was only about a year of my life I wasted, I'm not bitter at all... seriously. Did anyone else make this mistake? How did you realize what you were doing was the complete wrong approach?

ryanwaggoner 17y ago
Author of the post here. You can take some solace in the fact that some entrepreneurs never seem to learn this lesson, and fail repeatedly until they stumble into a success by chance. I touched on this in the article, but I think the VC industry can be blamed for some of this. If you start a company and raise a few million and hire a team and spend two years blowing through your cash before shutting down, it's easy to blame "execution" or hiring the wrong people, or whatever, rather than face up to the fact that you went down the wrong road from the beginning because you had a poor product/market fit. Success is a poor teacher.
- ryanjmo 17y ago
  Well luckily for me I did not have success ;)

josephruscio 17y ago

Missed a 4th reason for a lack of customer development: 4) Hard to get meaningful face time with customers and/or get honest, well-thought out responses from them, particularly hard for a brand-new startup without existing customers on existing products. Customers are very busy people too, and they are not on your payroll. Totally agree that you should make your decisions as informed as possible, i.e. do as much Customer Development as you can, but ultimately a big part of a early-stage startup is making decisions without the luxury of a complete data set i.e. gut and luck. Which is precisely why you need to "ship early" (get paying customers ASAP) and "ship often" (start developing them immediately and incorporating their feedback into development).

ryanwaggoner 17y ago
Agree on ship early/ship often, but most of the startups I've observed (granted, a small sample) didn't skip customer development because potential customers wouldn't call them back. By and large, I think most folks are willing to sit down with you for a cup of coffee for 30 mins and talk about their needs and how your product could help, especially if you make it clear up-front that this is not a sales call. YMMV, but we've had great success with just sending an email or picking up the phone and asking people if we could chat for a bit.
- josephruscio 17y ago
  Agree that most people who skip CD are doing for lack of trying ;-). I think the ease of gaining access depends largely on the target customer profile. Consumer, even SMB targeted stuff by definition has a large number of potential customers compared to the Enterprise. Additionally their barrier to purchase is much lower than the Enterprise, therefore the signal from your 30 minute cup of coffee is much stronger. It's a trickier proposition with Enterprise customers, but I guess that's why the deals are bigger.
gbookman 17y ago
>Customers are very busy people too, and they are not on your payroll. Sometimes I wish they were on payroll, especially customers who left. One frustrating thing I've learned is that people hardly ever tell you why they stopped using your product or lost interest in it.

futuremint 17y ago

I've been a part of two startups, neither of which did anything remotely like "Customer Development". The one was consumer oriented, and they sort of stumbled through the launch of a prototype that was built to scratch their own itch (i.e. they were their own customer, so they kind of knew what it needed). The 2nd still has very little revenue and I would say is still struggling to align with the customer. They've spent many years now developing a product that they think will fit the customer based on their experiences working in the target industry 10 years ago. Its a little scary to watch this company spend their money after only showing a mockup to a customer once, about 3 years ago. This 2nd company is starting to get paying customers, and then they panic when the customer says, "Wait. It doesn't do x, y, and x? I assumed it did, I mean, everyone in our industry does that! You didn't know that?" I'm curious to know how these 2 companies would be different had they done solid customer development first.

deleted 17y ago

[deleted]