The biggest mistake that entrepreneurs do with their first start-up

As being bespoke software vendor I’ve seen many start-ups that rapidly spent their money in product development and failed. I’ve provided experienced developers and designers to make a perfect product but their project didn’t succeed. So what was the biggest mistake they did?

They didn’t test the idea and  built project on guesses.

Steve Blank:

“95% of start-ups fail because of a lack of customers, not because of bad product development or service execution“

Professor, Stanford University
Entrepreneurial Studies

So before spending money on product development talk to your potential customers and test-iterate-test your idea and prototype. You do not need to have much tech skills to create your own web-app, all you need to do is to follow these simple steps to create “win the market” web-app.

Step1. Talk

Yepp, start with talking to potential customers.  Start with doing the interview with potential customers before creating your app to ensure that your app is really worth building!

Where you can find potential customers? Use linkedin, twitter and facebook to find people who may be interested in your app usage.

No one needs your app? If nobody is interested in your app people why should you create it? Maybe it isn’t worth creating?

Question: Which successful start-ups used this technique?

Answer: Dropbox,  SimplyMeasured, GrockitKissmetrics, WP Engine … Should I continue?


Step2. Paper prototypes – mock-ups

Got the idea what people want? Continue with creating a low fidelity prototypes using the simplest tools – paper and pen. By using pen you’ll activate part of your brain that responsible for creativity.  Or use Balsamiq if you want to do it in on computer. Show them to people you’ve interviewed and collect as much information as possible to understand the minimum features set of your app; serial entrepreneurs name is Minimum Viable Product .

Why should I do mock-ups? The app development may take months… mock-up creation will take 1-2 days only but you’ll be sure that your interfaces are understandable enough for users, it’s easier to rebuild mock-ups rather than realize that app interface can hardly be used after half a year of development process. Simply saying you reduce hours wasted on design and engineering and save your nerves, money and time.


Step3. Detailed prototypes

So you’ve tested a lot real users, and have the complete understanding how users will use the first version of app. Am I right? It’s time to create high fidelity prototype.  You can use Axure to create high fidelity prototypes. It generates HTML pages that you can show to your potential first clients ( early adopters ).  Or just use HTML pages to create prototype. I suggest to hire experienced UI guy at this stage that will help you to build the high fidelity prototype. Add Google Analytics to your wireframes to see how people use it.

BTW you build app for the web so you should know at least something about HTML, CSS and JavaScript, try to google about great resources for learning web technologies. The more you know, the less problems you have with developers :)

Step 4. Showtime. Determine the reward

Now show the prototype to at least 20 potential customers that will be ready to pay for it. I recommend you to buy a domain and create a landing page to collect email addresses of potential customers. You can do that using LaunchRock and MailChimp. Try to ask people how much they are willing to pay for your product.

And don’t forget to record app usage videos!

Step 5. Build the app

By doing all these steps you reduce the risks for your investments and understand what you are going to build.

Now you should hire a designer to make visual effects for your start-up. Simply saying he/she will create the final app look.
Do you like the designs of the app? Finally it’s time to start the app development. Hire a guy who will manage your developers (CTO) and with his help hire developers to create the app. Your tech guy should recommend you the right technology.

Here is the list of recommendations for app development:

  • Avoid using Content Management Systems (CMS) like WordPress, Drupal, Joomla if it’s crucial to have unique user interface for your app. Customized interfaces based on your prototype will be expensive, hard and time consuming.
  • Use open source programming frameworks. E.g. CodeIgniter or ZendFramework for PHP, Railes for Ruby, Django for Python
  • Hire experts. Programmer with low level of experience  increases the risk of failure. Also you may waste your money on devs that will never finish your project and code written by them will be useless
  • Write development plan by feature priorities with deadlines. Split the project into 40-120 hour milestones. Each milestone must have at least one completed feature.
  • Do not use Java, .NET and other heavy weight programming languages for your app. That would be expensive and not helpful on your stage.

Blogs to read

http://steveblank.com/ - Steve Blank’s blog. In 2012 the Harvard Business Review listed him as one of the “Masters of Innovation.”
http://cindyalvarez.com/ – this blog will help you to understand how to interview people
http://custdev.com/ – The Entrepreneur’s Guide to Customer Development
http://mixergy.com/ - more than 700 interview with entrepreneurs

Whats next?

So now you know that prototyping and interviewing potential customers are very important.

You can implement these steps in your start-up right now.

Leave a comment here, I would be happy to hear your experience with start-up development!

For inspiration:

Here is the most “likable” video in YouTube – PSY – GANGNAM STYLE :

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Photo by F33. Used under Creative Commons License.

8 thoughts on “The biggest mistake that entrepreneurs do with their first start-up

  1. Really nice blog post. The only thing I disagree w/ is the use of WordPress [ or any CMS your comfortable w/ ]. As a front end developer it’s much easier to create a MVP w/ WP for be because it handles user authentication/management, file management, etc. out of the box.

    My usual work flow is: design/development brainstorming -> pen + paper -> html/css/js -> WordPress

    Again, great article! (:

  2. Thanks for feedback! Usually web applications/services that we develop have complicated builder interface and it’s faster to do it using Code Igniter or Zend Framework. Can you provide some nice samples where you’ve used WordPress?

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  4. Great article with lots of real-world advice for beginners. I wish I’d had such easy-to-understand warnings when I started. It would have saved me a lot of time.

    The Easy Numbers blog – by Billy’s Billing – features articles on topics important to small business owners. One of the more recent ones I read talked about the biggest mistakes startups/small businesses could make to cause their failure. Head on over and read more if you’re thinking about starting your own business (http://billysbilling.com/blog/The-Five-Biggest-Mistakes-You-Can-Make-as-a-Startup)