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Most challenging obstacles for the first time startup entrepreneur?

Hello fellow members,

I am exploring some new product ideas and wanted to hear this groups thoughts on what was some of the most difficult hurdles when launching their first startup or even post launch hurdles.

It can be anything from funding, team building, sourcing talent outside of your skill set, bootstrapping, etc... I'd like to hear other peoples thoughts so I can compare them to the research I've been doing outside of this group.

Thanks and happy holidays!

12 Replies

Mark Cline
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Mark Cline Entrepreneur
Developer at PitchPoint Solutions
Excellent question Austin!

I am sure everyone has different challenges as everyone has different strengths and weaknesses, but for me, it was the accountability part. I did have peers to help keep me accountable and it helps for certain (make your 'goal setting' more global and give others visibility into it, and by 'goals' I mean the steps you are hoping to get accomplished each month, week, day). It was possible though to break promises made to myself easier then it was to break promises made to others.

Life is a learning lesson though. The current project I am working on I have a few partners as well so it enables to shrink the world I can focus on. The other benefit with partners is they can see things I miss. Truly, two heads are better than one (although finding the right partner is a whole other challenge :-)).

I'm looking forward to see others found was the biggest challenge (and probably get some insight into issues I had I didn't place).

Mark.


Dimitry Rotstein
4
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Dimitry Rotstein Entrepreneur
Head of R&D at SafeZone
I'm sure I haven't yet experienced even a small part of startup-related problems, but so far the hardest part is loneliness. No one understands you and your vision, no one shares your ambitions... that's hard. Family, friends, they keep telling you to "stop this nonsense" and go back to the "real" work. Co-founders are hard to find, and those I had found I wish I wouldn't have had. I'm sure that loneliness is a huge problem because generally I like being lonely, but now, for the first time in my life I suffer from it. If a more social person was in my place, he'd probably caved in a long time ago. Hope that answers your question.
Bill Kelley
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Bill Kelley Entrepreneur • Advisor
Business Mentor
Mark's answer is very good and applies to 2 of the 3 most recent startups I've been in.

But I think on a broader scale, I've seen resource limitations as the near-universal issue: money and/or availability of producers. Without big funding, most participants in your startup will be splitting their time (leading to Mark's issue). Getting money can come with a big cost, so everything is a balancing act for the entrepreneur.

There will be instances where money and available resources are not the issue, but market acceptance is. I was in a dot com in 2001 that had burned through $27 million in VC cash to develop a broken MVP based on a principle and business model that looked great on powerpoint, but not a single customer could be attracted to it.
John Wallace
4
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John Wallace Entrepreneur
President at Apps Incorporated
Undoubtedly the hardest parts are (a) getting the product to a place you can start making revenue, and then (b) actually getting customers. All of the other items (team building, funding, finding great talent, etc.) all suppose you have a product that someone is buying. I've done about a dozen ventures. Some went huge. Some went nowhere. The ones that went nowhere were usually because someone else with a similar idea beat me to the customers.

Timing is everything. As company builders, there are hundreds of things we must do to create a company and manage it well. In the beginning, only a handful of those matter. In my early companies, the biggest mistake I made was spending brain time on things that didn't matter at that moment. I now grade things based on their ROI, and if it's an important item with no immediate ROI, then I put it on a list and try to not even think about it until it matters. One question I ask myself is "If I did this later, would it have as good or better ROI than doing it today?"

When you are starting out, that's difficult advise to follow. Until you've done it a few times it's hard to know what matters. Right now, when I'm building something I ask: "What do I want to build? Will there be an adequate and growing market for this product when I'm ready to ship? Who are my customers? How do I reach them? Will they pay enough that I can rapidly grow my business? Who are my competitors? Do I have a significant edge over them so that I am able to compete? How am I going to build this product? How am I going to market this product? Are there skill sets I'll either need to hire or learn to pull this off?" After that I can start building the product. And then when the product is getting close to beta I can start creating and executing on the marketing plans. And as far as funding goes, I don't like to invest my time in pursuing money before I've proven the product. Raising money usually takes considerable time for inconsiderable dollars, and I lose valuable time where I could be building something and learning through experience about my product/customers/competition.

Time is money; in the early days about the only money we have is our time. Good luck, and Invest well!
Michael Barnathan
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Michael Barnathan Entrepreneur • Advisor
Co-Founder of The Mountaintop Program, Google Alum
John brings up an excellent point - you can't simultaneously fix scope, time, cost, and quality, and it's usually on scope that you'll want to bend. Discipline yourself to prioritize the features which really need to go into your product NOW, and put the rest aside for the next release (this is easiest to do in software, but applies elsewhere as well). Don't be afraid to drop things from the pipeline altogether if the market indicates a better direction for your product, even if you've already put a lot of work into them. Remember that you're in a continual process of finding out exactly what your customers will buy.

I don't think being beat to the punch is as significant a threat as most people make it out to be - unless you've given competitors enough time to become *really* entrenched, you can still beat an incumbent with a better product or user experience. Releasing in one month or two is unlikely to make the difference. More troublesome are systematic changes to the landscape: let's say you announce a Google Wave plugin right before it gets discontinued. Whoops, better pivot quickly.

Most failures I've observed have multiple contributing factors, but one of the most recurring I've seen has been a lack of discipline on the founding team: jumping to a new product area too quickly - or too slowly. Not filtering ideas enough, or filtering out too many. One part of the team having unrealistic expectations of the rest of the team (you can only sell as fast as your company can service those sales; asynchronies in your pipeline can put a lot of strain on your company and team if you try to follow through on them). Sometimes simple lack of compatibility.

I've experienced some hurdles personally as well, usually in team composition: going it alone when I really needed a partner, or going in with partners when I needed to go it alone (it's a misconception that you should always have multiple co-founders. There are some businesses that you really should run on your own; my first success was one where I made the judgment call to deliberately run solo). In a case where I did need a partner, getting so desperate that I selected the wrong partner - that's really hard to recover from.

Going into a two-sided market. Think long and hard about how you're going to get one group on without the other before you engage in any sort of matchmaking.

Going into a heavily regulated market: investors don't like regulatory risk. Don't do this until you have a lot of cash upfront, or you'll encounter a circular dependency between funding the regulatory filings and getting regulatory clearance so you can raise funds.

Just keep learning, when things go wrong - and when they go right.
John Wallace
1
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John Wallace Entrepreneur
President at Apps Incorporated
I feel for you,Dimitry. Being an entrepreneur can be lonely. What bothered me is that at times I wondered if their well-meaning-yet-soul-robbing advice might actually be right. I found Robert Fritz's book "Path of Least Resistance" to be a big help in understanding why I create and how to be a better creator. I've also attended his workshops. Wisest teacher I've ever had.
Monica Borrell
1
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Monica Borrell Entrepreneur
CEO and Founder at Cardsmith
Thanks for the book recommend John. It looks like a good read, so I just ordered it. I also get concern/advice from family that my start-up is taking too long and perhaps I should give up and get a job.

For me, in a software business that I'm trying to move from concept to prototype:
the biggest challenge so far has been team. I initially started creating a software application without the right team and ended up wasting a lot of time and money. I think in a startup the right team has just as much to do with attitude, personality fit and maturity as it does with skill sets, although skills are obviously important too.


Austin Cornelio
0
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Austin Cornelio Entrepreneur
Co-Founder & Frontend Engineering Consultant
Great feedback all! I really think these are all great points, I have experienced many of them and even forgotten about some similar past experiences that some people bring up.

@John Wallace - your first two points about product development are great and am currently experiencing this with one of my own ventures. Also, great advice about running tasks through ROI logic, and yes this is a difficult thing to wrap your head around when one is just starting off. Ones natural instinct is to act on as much as possible in fear of missing the mark on something.

@Mark Cline - great comment about accountability. This is one area that I'd like to focus on specifically, and see if I can come up with tools to help teams with accountability problems and or goal/task setting. I believe that the two go hand in had.

Thanks again,
Austin
Ranjit Sawant
0
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Ranjit Sawant Entrepreneur • Advisor
Product Management and Marketing at Vaayoo Inc
I have launched a couple of my own startups . Failed at one and successful at other. We at Vaayoo.com also successfully launch startup for other entrepreuners too. We have successfully helped 28 startups launch their products from concepts.

Advising other entrepreuners about how to do a startup is like teaching someone how to swim by reading a book. You have to experience it to learn it. But here are some of the things that i miserably failed and learnt from:

1) Solve a Problem or Launch an idea that you can relate to and can be passionate about: I launched a picture sharing mobile social startup way back in 2005. It did well. However, i was not passionate about it and did it just because everyone else thought social networking was cool. Eventually, even though we had headstart on the product it failed. I could not keep up with changing markets, competition, features etc, because i was not *into* it. In startup, PASSION = SUCCESS. You dont have money, you are working hard at something that may or not make it. Passion is the only thing that gets you through this. Dont do it because everyone else is doing it. We get a lot of ideas like this as Vaayoo. We do ask the client why is he so interested in the concept. We try to gauge if he is really into it. Their success is our success.

2) Get a Co-Founder: Startups are emotional roller coasters. You need someone to shout at , Argue with and turn to during your journey. Founder Dating is doing a great service here. My first startup , i did it alone and failed. I took on a co-founder next time. Believe me, it make a lot of difference.

3) Dont spend time chasing VCs. They will come to you: This may be counter intuitive and a tad disappointing. The chances of getting funded for the first time startup by a VC are less than you winning a lottery. You only hear about 0.001% of first time startups who get funded. You dont hear of thousands of other who dont get funded. I must have done more than 100 pitches to VCs at different times in my startup lifecycle when it was not doing well. On other hand, if you start showing signs of success, you will get a call from them or someone that you know. Dont spend a lot of time raising funds.

4) Customer and competition research: Very important. Even if it is a simple survey that you can send to your FB friends and get their anonymous feedback. Do it. You are blinded because you are passionate about your idea. This simple task will let you know if you are largely wrong or if you are in the right direction. Keep doing them once you have UI designs, Prototype and MVP.

5) Ignore the Nay sayers: "Something similar is already there", "You are building a lifestyle startup", "You should try to get a full time job" are some of the comments that can pierce your heart. Ignore them and stay focussed. Instagram and Snapchat would not have happened if the founders listened to every "Something similar already exists" comments.

6) Build a Runway: Timing and sustainance is very important. Startups have to be ahead of other startups but not too ahead of the market. That means there can be a few months to few years between launch and successful adoption of your product . Make sure you have built runway to sustain your startup. Few paying customers can be better than 100's of non-paying customers (it may be different in social startups). Your costs should be low. Again, Vaayoo.com helps with all this by having low monthly costs.

7) Focussed Execution and Launch soon: Once you have a initial concept, you need to set a date and Execute. Your single focus should be getting the product to the launch state. Any feature that is not important in first release should be postponed. Time to market is everything. My social networking app, had ability to take pictures and send them to multiple social networks with single click. But, i thought , sharing videos would be cool. No one had done it. But it was a very wrong decision that led to the failure. It costs us 1 year of our time and a lot of money to incorporate the video sharing functionality. If we had fined tuned and launched the picture sharing experience that would have been much better. Be very aware of feature creep and focus on usability.

We at Vaayoo.com are using all these experiences to help other startups launch and maintain successful products in the marketplace. We act as a technology department of a startup and design, test, launch products for entrepreuners. All this for low monthly subscription costs. Check us out at http://www.vaayoo.com
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X
Entrepreneur
Hi Austin,
this video also contains great information (as many other video in the TWIST series):
http://www.youtube.com/watch?v=0nky5JbWmkU
have a good weekend!
G.
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