Startup lessons learned after two and a half years
- Two and a half years ago I wrote my first line of code.
- Two years ago we incorporated "The Float Yard Ltd"
- 20 months ago I quit my job
- 13 months ago we had our first paying customer
- Last month we hit 100 paying customers
Regardless of it's future successes or failures, starting Float has been one of the best decisions I have ever made. The last two and a half years have pushed me to the limit emotionally (both positively and negatively) but there are few paths I could have taken in that time that would have taught me as much about life, myself, software development and business as this one has.
If you are thinking about founding a startup yourself, I am afraid I don't have much concrete advice. My best is this. Nobody wants you to take that leap: your parents probably won't understand, and will be scared; your friends won't understand why you would wish to do more work for less money; and you yourself probably won't have a clue what you're thinking. So: don't overanalyze, but be smart about it; start small; know what plan B is; and listen to your heart/gut/gods - the right time will make itself apparent.
It's somewhat easier to give you advice once you have made the initial leap, although as a first time founder myself, consider these as lessons learned, and things to think about, rather than a concrete guide to success, riches and fame (heck I am not even there yet myself!).
It's a total cliché in the startup world, but it's all about people (although what in life isn't?).
I am hugely fortunate to have a great cofounder in Colin. We weren't best friends when we started, but we had worked together on some projects, it was clear that our skill sets were complementary to each other, and we got on pretty well. I still think that despite that basic due diligence we got lucky.
Starting a company is really hard work. So it's not just a case of finding someone who can pick up the stuff you can't do, and splitting the work between you. There is an enormous amount of uncertainty in early stage businesses, which is really hard to battle through and find the right path. You will fight, fall out, disagree, get frustrated, have bad days - it's the nature of smart people working together to solve hard problems.
Fortunately our relationship is now at the point where we can discuss openly how we are feeling, what's pissing us off about the other, and we can work together to resolve our frustrations and move on. I wouldn't say we are best friends but Colin's arguably the person in the world who I would most comfortable having just about any conversation with. It's taken time to get to that point, and in many ways I think we are lucky to be here now, but it makes us a very strong and open team who can work to solve really hard problems.
Don't sweat the big stuff
What seems big and important often turns out to be not very important at all. New startup just raised $1 million in your space, all over TechCrunch: I bet your potential customers have no idea. Launching: big and scary right? Probably nobody will notice. Different product just launched with the same name as you: It's happened to us, twice; total impact so far: none.
The point is, these big things seem big and important - but they will happen over and over and most of the time they will fizzle out to nothing . Try and avoid expending huge amounts of emotional energy freaking out. Be aware, note what's happened, make changes if necessary, move on. Far more important to you, little startup, is whether your potential customers actually care about what you are doing - which is a much easier thing to ignore, but vastly more important.
Get to know your customers
Really get to know them. We know the first names of most of the people paying for Float. We have exchanged emails with almost all of them, skyped/phoned a good number, and have met quite a few in person.
This is important for a number of reasons.
Firstly it's just damn good customer service. Can your customers speak to someone at Google on the phone? Not likely. There you go, instant win for your scrappy little startup.
There have been a number of occasions where I have offered to phone a customer who's trying out Float but is having difficulties. Within 5 minutes, I have solved their problem, got to know them a little, and as soon as I put the phone down they sign up for a paid account - citing our great customer service. It's not easy in a small team, and it can be frustrating, but it works.
Getting inside your customers' heads also really helps you build great products. I now have 5 or 6 customers in my head who I know inside out - what they do, how big their team is, what they worry about, what makes them happy. This really helps when we are thinking about how to improve Float. I can run a quick test in my head: "How would Bob feel about this new feature? Would he care? Would it work for him?"
As an early stage startup, one of the key questions you should be solving for is "do potential customers care about what I am building?" and by extension "do they care about it enough for them to actually take the effort to integrate it into their lives and pay me for it?". It's really hard to answer this if you don't get to know your customers.
One trap we've fallen into is asking for feedback as a replacement for getting to know our customers. Asking for feedback feels like you are developing a relationship, it feels like useful information. And it's useful to some extent, but people are really bad at telling you what they would do/have done - they may tell you it's critical that you add feature X to your app - and then never actually use it once you have done so.
It's also important that you get to know the right customers: those who will actually pay! When we started building Float, we let companies use it for free for a long time while we improved the product. Eventually we started charging people, even though we still weren't very happy with the product. Our main reason for deciding to charge people was less to make some money, but more to ensure we were listening to the right people, not just people who would say they wanted features X, Y and Z but would never actually pay for the product.
Once you get beyond a certain size, it's impossible to deeply understand how every customer feels about your product. And often you will have people try your product who never tell you at all how they felt about it.
To solve this you need metrics - measurements of what people do in your product. The trouble with metrics is that it's really easy to start gathering a lot of data. Cut and paste the Google Analytics tracking code, and Mixpanel, and Clicky, and Kissmetrics, and some others for good measure and you'd be forgiven for thinking "well that was easy, metrics: check!".
The trouble is, as a team of two or three, and no statisticians in sight, it's hard to take that data and make much sense of it. It's much more useful to analyze your business first, and think about the key indicators for how well you are doing, the key things you want to improve, and figure out how to measure those.
For Float at the moment, we care about:
- How many people come to our homepage?
- How many of those click through to our "Signup for your free trial" page?
- How many of those actually fill in the signup form and get their account setup?
- How many of those come back and check in on their Float account in the future?
- How many of those actually pay us?
Five things, just those 5 things are a great start for us. We can immediately see where we are losing people in the process from hearing about us to giving us money. We can make guesses about how to improve those numbers: "let's put the signup form on the homepage to remove a barrier" and see what difference it makes.
Currently I get these numbers emailed to me every day, and I can paste it into a spreadsheet that does some simple analysis. Sexy? No! Smart dynamic live-updating websockety real-time live customer dashboard? No! Useful? Hell yeah.
Start marketing now
When you're working on your product, you've got some beta testers, it looks shit but you're making progress, and you've a huge list of things you want to do, it's easy to put off marketing.
"We're not ready for loads of customers yet"
"We've too much to do to be marketing"
"Let's wait till the product is great, then marketing will be easier"
The truth is, marketing is really hard. It takes time to work, it can be hard to know when it is working, and you don't see instant results so it doesn't feel very productive.
Getting started earlier, and doing a little as you go along is, I think, a much better strategy than waiting till you launch. It gives you time to learn about what works and what doesn't, it let's you learn about the process and get better at it, and it gives your marketing time to work.
That's all folks
Those are my burning "lessons learned" from two and a half years as cofounder of a startup. I certainly have a lot more to learn, and any thoughts, suggestions or criticisms are more than welcome.
And finally, I can be a bit rubbish at networking, but I love talking to people who are interested in just about anything. If you want to chat about any of this stuff, just grab me on twitter, or drop me an email.