23:57
aaronchua
Every startup needs a full time founder: The three founding members of my team all held full time jobs. We naively think that we can cook this up in our spare time. Obivously things didn't go as planned. Schedules were often missed. Development was slow. At times, it seems everybody is too busy to be doing anything.
It is from this lesson that I have insisted on having at least 1 full time founder in all our investees. Think about it. For every idea you have, there are at least 10 other teams working on it around the world. If every of these teams is as clever as you, and is spending 100% of their efforts on the project, what chance do you have if you are not fully committed?
Do not customise your product too much: Our first potential client was a bank. The number of times we had to meet, the effort we spent to customise our product etc was taking a heavy toll on the team. Worse of all, the deal fell through at the end due to the crisis. This means our cash flows were in a bad shape as we have incurred the expenses without realising the expected revenue.
We learned that if you want to sell to businesses, don't comprise on your product. If your client requires too much customisaiton, it probable means they are the wrong group. It is better to focus on getting the first sales of your existing product, rather than spent resources customising it.
Decide early on when to cut losses: As we were losing money, there came a time when we didn't know to cntinue or to stop. This caused us a lot of disagreements and unhappiness. I now believe that you should plan for such things. Decide in advance what losses are you willing to bear before letting it go. This will be very useful when things turn sour and your team need to make a decision fast.
There is no business in location based services: On paper, location based services seem like the best new thing. How seriously wrong we were in overestimating its demand. Make sure that when you decide to do a startup, base it on strong economics. Don't do something just because of the hype or some superficial understanding of the industry. Invest some time to learn the underlying economics that is creating the opportunties. This is why I have been posting on stuff like this, this and this.
Do not be afraid to fail: The final point is that it is common to get your hypothesis wrong. As long as you know it is a mistake, cut your losses early and start again. Our office, in fact encourages failed entrepreneurs to reapply for another project. Don't be afraid to fail. As long as you keep on trying, your success will come.
There are actually many more lessons to learn but these are 5 that I find the most interesting to share. If you have your own lessons, why not share them in the comments section?
Posted in: Personal,Singapore startup environment
