I’m often asked what the biggest mistakes were as we were building up our startup Localization Guru. As this is our first project with global ambitions, we made a LOT of them, trust me.
No. 1 — We felt into the startup fashion bubble
There are startups everywhere. If you open a new vegetable shop on the corner, you’re most likely to call your small business a startup :-) Even if those two things are really far apart. But let’s face it, that’s the reality right now.
So we were chosen for this startup incubator in Budapest called Digital Factory. The program in itself was good; the founders are actually very experienced entrepreneurs with some big exits.
But we were proud d*ckheads with our ears closed and we thought that we knew everything. Don’t get me wrong, it’s really important to trust yourself, but you have to listen and learn. And you have to learn a LOT.
So try to stay humble and listen more.
No. 2 — We focused on raising money rather than making revenue
You’ve probably heard of this already, but I have to tell you that this is a HUGE problem. Almost all startups out there are just chasing external capital.
So let me tell you how we screwed. We raised 30k when we were accepted to the acceleration program. And we burnt all of the money while doing just about nothing.
Yes, we published our first business model that was nothing like the market wanted. We’d worked on that for 4–5 months and we had to shut it in 2 months after publishing. It was a disaster.
At that point, we decided to turn the business concept completely upside down and to build a new MVP as simple as it could be. And it was a really good move (at least something finally :-).
No. 3 — First we built, then we sold
I must say that this is the biggest lesson I learned last year. Most of you will probably argue that first you have to build something to sell it, not the other way around.
Ok .. I get it .. I thought so too .. but you know what my opinion on that now is? BULLSHIT!!
Now we’re extending our portfolio of services and I already have tons of ideas of what to implement next. But we’ll sell it first (well, at least pre-sell).
Doing so will save you a lot of time building something nobody wants.
No. 4 — Get the f*ck out of your country right now
If you are building a startup with global ambitions, your local mentality won’t help you.
I have to say that we were not really guilty in this one. We’re a team from Slovakia and one of the founders went right away to Austria for 4 months. Then we went into the incubation program to Hungary for another 3 months. And then we were about to start a cooperation with our next investor to be in the Czech Republic.
It was really interesting seeing all the different mentalities of the people who are living just a few kilometers apart (Bratislava to Vienna, 70km; Bratislava to Budapest, 200km; Bratislava to Prague, 300km).
Get out of your country and talk to people from different parts of the world, with different cultural backgrounds and different ways of thinking. I honestly think that it could only help you.
No. 5 — The more money in your bank, the less you focus on making it
We went bankrupt almost twice before being accepted into the incubation program and after burning all the money from it.
I noticed an important pattern when it happened. When we had the 30k in our bank account, we focused on activities that generated us NO revenue at all — going to startup conferences, beer-networking and doing things like banners, website redesign and other crap.
When we were just about to run out of all of our money (last 1k on the bank account) we were finally forced to think how to make money. And our brains suddenly started popping all kinds of ideas of how to make money.
I started to drive UBER; we were thinking of starting a dropshipping-based e-shop and all kinds of other crazy ideas :-)
But apart from these crazy ones, we also managed to get on the right track with our project and we started generating revenue. From that point, we’ve successfully bootstrapped and we are still growing.
Interesting read. One question : How do you manage to sell something you don't have build yet ?
You can "sell" an idea before a product has been created. You can do this simply by talking about it, by producing a prototype, by creating a promotional video, etc. Get people who are excited to buy your product as soon as it's ready... but do this before it's ready, to prove that your idea has a market!
Read more about all this in The Lean Startup.
As Flimzy described. You basically describe the "idea" to potential buyer and once you see it's useful for it and he will tell you that he would pay for it, then you can start building it. You can even sign with him a Letter of Intent or Future contract which can help you raise external money if that's what you are after.