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Four Years & Two Million Dollars Later, Lessons from a Failed Startup

Four Years & Two Million Dollars Later, Lessons from a Failed Startup

All illustrations by absurd.design

If you’re thinking of starting your own business because you’re after the ‘glorious’ end and not the journey getting there, don’t bother! … If you’re not tenaciously persistent; get excited by seemingly insurmountable challenges; easily swayed or care too much about what others think and say, don’t bother! … If you think failing will be the ‘end of you’, also, don’t bother!

At Generics, we set out to solve for poor fitting, uncomfortable earphones. We mak(d)e custom eartips to the shape and size of individual ears through an App, photogrammetry and 3D Printing. I failed to raise cash fast enough to scale. Here are some of the lessons I learned along the way. 

Make sure you’re really solving a problem, not a nuisance.

A solution to a ‘problem’ or pain-point is a must-have. Conversely, a solution to a ‘nuisance’ is a nice-to-have. You’re looking to deliver a pain-killer, not a vitamin! Solving for a problem will dramatically improve your chances of success. The added bonus of solving for a big, difficult problem is a higher barrier-to-entry and fewer competitors. If you don’t know how big the problem you’re solving is, find out quick. Ask ‘potential’ customers and consumers, not family and friends, whether they will go out of their way and pay for your product. @Generics, we knew the problem was prevalent, however, today, judge it was more nuisance vs. pain-point for most people. Be brutally honest with yourself. 

Deliver the simplest solution to the problem.

In startup jargon, this is the minimum-viable-product (MVP). Don’t fall into the trap of 'just one more feature to make product great'. Despite all your efforts to make your first product perfect, it will not be! Don’t waste time and resources trying to achieve the impossible. Just make sure your product provides value to users. Develop the ‘perfect’ solution later, when you better understand what your users want and have more resources. @Generics, we first made fully functional earphones. They had to fit well, feel comfortable, sound great, look beautiful, exude minimalism, have a rotating bezel, a removable ‘custom initials cap’, strong cable, cost less than $45… We should have focused only on making custom great fitting eartips for select earphone models, dropped everything else, we would have saved time and money. Be pragmatic, keep it simple.

Start fast, test faster and pivot faster still.

I took too long to decide I am starting my own business. Once I did, spent too much time developing an intricate business model that later proved worthless. Took too much time figuring out how to ‘sell’ my PowerPoint to investors. Took too long to raise money. Took too long to develop the MVP. To go-to-market. Almost 3 years! To get ‘paying’ consumers feedback. Took too long to make our first pivot, a little faster but still slow for our second pivot, even though I knew 73% of startups pivot (EPFL University). At the time, each of these felt really important and merited I spend ample time to get right, in hindsight, while important, they simply took too long. I should have skipped or completed much faster applying Pareto’s law. Don’t waste time, once your mind is made up, take the plunge, go all out, focus on the big things and correct course when you know you’re heading the wrong way. 

Develop and test your ‘go-to-market’ as you build product. 

Developing your commercial plan after you’re done building product is too late! Testing various go-to-market models will yield priceless learnings that will impact and shape your product development. Tweaking product to reflect learnings after you’ve locked development will waste time and money. Early results will also flush out ‘red flags’. You would rather find out quick there is no demand to what you’re building so you tweak or abandon project ahead of wasting months and hundreds of thousands in development. Don’t fear getting feedback on a ‘half-cooked’ product. Call it ‘beta’ and sell it at a reduced price if you must. Customers and consumers who don’t like it will not hold a grudge against you. When developing your ‘go-to-market’ don’t just think brand equity and key benefit communication. Think of your audience, the customers and consumers who are struggling most with the problem you set out to solve. Think ‘How’ and ‘When’ you want to reach them. @Generics, our audience were daily earphone users who listen to music while working out. We wanted to reach them during their exercise regiment as they experience their pain-point. Test different channels, figure out what works best for you and optimise for cost. Leverage digital, like SEM and social media, test others. Gabriel Weinberg & Justin Mares Traction is a great resource to help set your testing framework and inspire ideas. Prove product/ market fit. 

Understand the skill-set required to build your product and commercial plan, only hire for that.

Make sure you have the ‘right’ people working your project. ‘Right’ are those with relevant expertise and/ or experience, those who are persistent and will keep at it. Only hire individuals working on your core solution. Make sure to focus their efforts on solving for and delivering your core product. Prioritise and make a deliberate choice to shed anything not fundamental to your core product. This will give you the best chance at successfully delivering solution, fast, without overhead costs spiraling out of control. Tell ‘under-performers’ what they are doing wrong, give them weeks to correct, otherwise, they are not the right fit. You will hesitate to let people go every time you think of the immense effort and time you must re-invest into searching, interviewing, on-boarding new team members. Time you could spend developing product and go-to-market. It remains the right thing to do. Keeping under-performing individuals will impact you more negatively vs. investing time to find the right hires. @Generics, it took me a while to figure out the required skill-set, didn’t find the right talent in the region, ended up developing product without a fully qualified team and only managed to do so due to the team’s intelligence, sheer will and extraordinary effort. Nonetheless, it came at a price! Sapped our energy and took way too long to develop. Another mistake was to front-hire, I expected a deluge of orders that never came. Hire for big impact, make sure individuals have the skills and attitude to succeed, hire slow and keep team focused on solving for core product.