I recently closed my company, ChapterBoard.com. Although I don’t believe this venture was a complete failure (after all, if you learn something from an experience isn’t it worth something?), it was a failure in the sense that we didn’t make enough money and had to shut down our service. I believe in making every experience count so here’s what I learned from failing and what I hope to do better at in my next adventure.
Monetization is important
When you start a company, you might have the deluded idea that you don’t need to worry about monetization. I have three words for you: You. Are. Wrong. The biggest regret I have from ChapterBoard is not putting enough importance on monetization. I wasn’t wrong in thinking that if we had users we would inevitably have money. However, I was incredibly wrong in believing that we would have A LOT of money. If you don’t have a prediction of how much money you’re going to make – even worse if you don’t have an idea how you’re going to make money – you’re already in a hole. Revenue is the thing that separates the great companies from all the rest. Anyone can build a product. Fewer people can find customers to use their product, and even fewer can convince customers to pay for their product. Yes there are those few exceptions to the rule like Instagram but my hunch: your company won’t be one of them. I’m not saying you need to concentrate 100% on generating revenue (I’m a big proponent of focusing on the needs of the customer first and foremost), but I am saying you should spend time on it. For early stage founders I challenge you this: spend as much time understanding, creating and implementing your revenue model as you spend developing your product.
Nothing is written in stone, change is inevitable
Change is something I dislike, not because it brings about something new and different but because it is the unknown and yes, that’s scary. As a startup founder however, you need to embrace change. This means changes to your product, changes to your audience, changes to your advisory board and even changes to your team. If you want to avoid failure, or at least stack the odds in your favor, be accepting of change. When your engineers want to try a new service or your marketers want to pursue a new partnership, be open to it. Yes change is uncomfortable and with it comes the chance of failure, but change is the nature of the startup world. So embrace it or, if you’re like me, hold it as close to your body as you can without becoming violently ill.
Optimism is good, pessimism is better
When I started ChapterBoard I had grandiose and extremely naive notions of what my company could do and be. For the most part, none of these ideas came to fruition, not because we didn’t execute on them, but because they were outrageously ridiculous. When it comes to starting a company, optimism may get you funded but pessimism will get you profitable. Look at every component of your company with a critical eye, from your market and competition to your product and potential customers. Be prepared for the worst of the worst even if it seems outrageous, because there’s a better chance of that happening than everything going your way. Remember that you’re the newbie in the industry, the smallest dog in the pack and (probably) the least funded of anyone. Yes, you have the potential to change the landscape and make millions of dollars, but potential doesn’t mean crap without execution. Being pessimistic about your company will help you set realistic goals and consider your market from an objective perspective. Plus, if after understanding the worse case scenario you’re still excited about your company, you can give yourself a small pat on the back for having the gusto that most people don’t possess.
The greatest lesson: Humility
The absolute, greatest thing I learned from failing is humility. I’m not a pompous person but I do like to boast here and there. When you run a startup, there are few people who will really be in awe of your accomplishments. Of course, you can get press articles written up about your new product launch or round of funding, but that’s just chatter in the startup world. No matter what your startup accomplishes, there will always be another company who’s already hit and gone beyond that marker. You might get to beat your chest a few times but, more often than not, you’ll spend your time defending your decisions, apologizing to your customers or racking your brain to figure out how your competition is beating you. The startup world is a supportive ecosystem but it will also tell you day in and day out that you are small and insignificant… it’s not meant to hurt your feelings, it’s just the truth. So accept that you are not the greatest founder in the world and learn to be humble about your success. Understand that many have come before you and they all have amazing insight to share, because the startup world is the most idyllic learning environment if you’re open to it.
Choose a co-founder like you choose your husband
Every time I go over my experience with ChapterBoard the one thing that stands out is my co-founder, Blake. We have a different type of founder relationship (we’ve been dating since 2004) but, everything being equal, I was so lucky to have such a great startup partner. When you look for a co-founder, whether you’re considering your friends, significant other or a business contact, make the choice as if you were selecting your husband (wife, life partner, etc.). In two words: be picky. Having a successful founder relationship goes beyond liking the same beer, music and coding language. You need to find someone that you can communicate with, not just during the good times but during the bad as well. You need to be able to fight passionately and still respect each other at the end of the day. You need to understand each others’ weaknesses and complement them with your strengths, and you need to be committed to the relationship for the long haul. I could write a whole other blog post on this topic (actually, I think I will) but in a nutshell: take your time when selecting a co-founder, listen to your heart and your gut not your ego, and above all, know yourself and be honest about your strengths, weaknesses and what you want.
