I have a confession to make. I’m a business book addict. It's an unhealthy relationship that drains my bank account and generally leaves me with few, if any, useful insights. Yet for some reason I can't seem to pass through the coffee-stained aisle of my local book mega-store without picking up a few of the new releases. I've even taken to strategically removing them from my bookshelf, so house guests don’t’ mistake me for a cliché-spouting, new-age, faux business 2.0 guru.
The funny thing is that, despite having read virtually every hot business book out there, the most important lessons I've picked up while nurturing my business from scrappy startup to even scrappier, slightly more mature, startup, were learned the old fashioned way: by living and learning.
So, with that being said, I submit to you the top 3 startup lessons that I learned the hard way.
1. Focus on the Pain Points
Don't roll your eyes…This lesson isn't as obvious as it seems. Every single founder thinks that his or her product solves a pain point in the market. The trouble is that not every single founder has the intellectual honesty to recognize that the pain point they're solving might not be either big enough or a pain point that people NEED to have addressed.
When we initially came up with the concept for BodeTree, the killer feature that I thought would take us to new levels of fame and fortune was our automated valuation feature. Before co-founding BodeTree, I had been a valuation consultant and charged obscene rates to small and mid-sized businesses to develop valuation reports. It wasn't uncommon to rack up a bill of $15,000 or more for a typical valuation. Now, we were jumping into the market with a solution that did the same thing for $50/month. Who wouldn't fall to the ground and start praising their deity of choice for such a miraculous invention?
Lots of people apparently. It turns out that not every owner cared about that feature as much as I did. My team and I had to put our personal biases and beliefs aside and figure out what our customers really wanted. In the end, it helped us find sustainable success by redefining the experience we provided and the customers we served.
2. Stay lean
I believe it was Plato who said "Mo' money mo' problems." That may not be quite true, but it is true that for most startups the hunt for funding can become an obsession that takes up far too much time and energy.
Of course, every founder says that until they need funding. BodeTree has been fortunate enough to attract a lot of media attention and traction with users, and with that comes attention from venture capitalists (VCs). At first, you're flattered by the attention but still have enough funding to play hard to get. Then time passes and two things happen. First, you develop grand ambitions for new features and team members. Second, you start to run out of money.
Enter the VCs. Now the table has turned and you find yourself increasingly desperate to impress. It isn't uncommon to attend meeting after meeting only to receive the "it's not you it's me" of the funding world…"We're really excited about your business, but we want to see a few things play out first." And everything I just said applies equally to banks. Plato might also have said “banks only lend to the businesses that don’t need it.”
Instead of spending your most valuable resource - your time - chasing down investment, you’re better off focusing your energy on gaining traction and building a sustainable revenue stream. Staying lean and maintaining your independence for as long as you can will give you the ability to be flexible and find the right value proposition for your business, which brings us to my third and final lesson.
3. Don’t follow the herd.
The most important lesson we’ve learned is that you should never be afraid to question the prevailing wisdom. When we first started out, everyone told us that we had to market directly to accountants if we had a snowball’s chance in hell of reaching small businesses. The problem was that many accountants viewed our product as threat, rather than an opportunity. As a result, we found ourselves having to defend our product to the very people we were trying to market to. Not exactly an ideal situation, as I’m sure you can imagine.
Instead of fighting an uphill battle or modifying our product to serve that segment, we went in a totally different direction. We chose to double down on our direct-to-consumer strategy, building a strong brand presence that resonated with the business owners themselves. It was certainly a bold decision at the time, but had we followed the herd, we would have lost everything that makes our product special.
Do you have any hard-earned business lessons you’d like to share? We’d love to hear from you!
Chris Myers is the co-founder & CEO of BodeTree, the leading support tool for small businesses. Learn more at www.BodeTree.com.