Startup Reflections — Where We Went Wrong

In retrospect, starting a startup is hard work. I may also say that they are impossible in certain cases.

Recently, over lunch with a former client, we reminisced about some of the work we did during our time together at CoPro. He was running a fairly successful styling app while we were running around trying to figure out how our Saas product could make some money while delivering value he expected. The discussion over our meal made me reflect on what went well and what didn’t go so well.

These reflections are as transparent as I can get. It isn’t to say that we weren’t successful or didn’t have fun. We did both of those things to the extent that was possible (and perhaps more than we should have). However, my reasons for putting this out remain the same:

1. Reflect on what we did and my learnings from it.
2. To any startup founder/founding team reading this, I hope you learn from my experience.
3. As is in my bio, I get clarity while writing stuff down. I will continue doing so.

What went well

First things first. While reflecting, it is easy to point out a million things that may have gone wrong. However, I believe in putting out what went right the first time around. For those wondering, CoPro is still very much in existence and is run by my former co-founder, Vinay. He remains a good friend, and we continue to have business arguments about the company. I find this cool :).

Another reason why I believe CoPro was successful was the fact that we were able to make revenue happen. In the time that I was looking into sales and marketing efforts, we were able to bring in some fantastic clientele, some of whom we still interact with even today (see first paragraph). So here are a few things that went well:

1. Hustle — One thing we were interested in was making sales happen. Almost immediately, we decided that sales were front and center. From the start, our sales engine was firing on all cylinders.
2. Finding solutions — The word for this is Jugaad. I believe that every startup founder needs to be resourceful. Our ability to offer tailor-made solutions to customers helped us build an initial clientele. The attitude of figuring things out would eventually help us land enterprise deals and raise investments.
3. Customer-centric problem solving — This is something product companies (and a few service providers) seem to be getting wrong today. Tailoring solutions for customers as opposed to force-fitting solutions across the board is critical to customer success. Our business model at Copro seemed to bring product and delivery together nicely. It played a large part in ensuring customer success, albeit at later stages (post-investment).

Where did we go wrong

Started with a SISP — I have blogged extensively about SISPs. Jared Friedman of Y-Combinator was the first to coin the term — A solution in search of a problem. Any idea stage company working in an SISP mode is in deep trouble.

Our initial build of CoPro was a crowdsourcing platform for brands to use for ideation. It wasn’t long before we realized there wasn’t a market for something like this. Although we pivoted to something enterprises wanted, starting with a SISP is a bad idea unless one gets lucky.

Fundamental Issues — Truth be told, all four founders were quite early in our careers. At 22, I had little understanding of what it took to run a startup. I had just quit a sales job and decided to start up with utopian ideals. Today, the founders I interact with have a deep understanding of financial analysis, profitability, deep insight into markets they are trying to service, marketing, and how to bring in the initial set of customers. Even while pitching to investors, none of us had any clue about financial modeling. Founders today have all these check boxes. Sometimes, I also come across founders who have some revenue or at least done some product-market fit before meeting angel investors.

Lack of Founder-Market Fit — Of the four members of the founding team, none of us had experience in building Saas products. We were an amalgam of individuals who marginally showed some interest in building something. Even the initial build involving the crowdsourcing model was not something any of the founders had deep insight into. It took a lot of time, effort, and money to ensure that we found the right fits across the platform

What we learned

Entrepreneurship is not for everyone. In a recent podcast, Sanjeev Bikhchandani outlined the makings of a good entrepreneur:

1. They are insanely hardworking
2. They know their customer well
3. They are good at sales, I.e, can make revenue happen
4. Willingness to make personal sacrifices by not taking a salary for years, i.e, resilience
5. Good with people — they can build teams and bring people in
6. Extreme humility — when required

I believe this articulates what an entrepreneur looks like. I also believe it’s a great learning for someone who wants a reality check on what entrepreneurship or starting up looks like.

Leadership vs Knowledge — I recently met a professor at IIM and was discussing with him the venture capital work we do. His opinion on VC as an asset class hit me hard. While venture capital can expose one to different markets and perspectives, leadership is mostly about people and how they work together. Leadership has and always will be about people management skills and not necessarily the knowledge gained. The best entrepreneurs I’ve come across have been those who’ve managed to build great teams.