This post was originally written on the 15th of May, 2015.
Below is a list of startup mistakes I compiled for myself over the last 18 months, which eventually ended with us losing our investment and selling the company. They may seem obvious and cliche, however, with a pinch of bad luck I believe them to be true.
I spent far too long building Washbox, with no idea of what people wanted. Our MVP probably stood for max viable product. Down the road, I was less open to making important changes.
Following my first point, tunnel vision prevented us from successfully pivoting to a leaner business model and differentiating ourselves from the competition. When you’re young, you don’t know what you want to be when you grow up.
Our idea originated from an American startup who had already raised a significant round. We roughly copied their process with little research into the UK market. Our business model needed dramatic changes and when competitors followed suit, we all looked the same.
Every startup wants to be awesome but don’t make promises you can’t keep. We promised half and hour delivery slots which resulted in late deliveries and hundreds of complaints. After running customer research, we found one / two hour time slots ranked the same as half and hour time slots! Promising something unimportant and not delivering is far worse than not promising it at all.
People know people and are willing to help, if you ask politely. In the early days of the Ignite (awesome startup accelerator) we were bombarded with advice, contacts and useful insights. I took this for granted and wish I’d asked more questions.
In the early days I thought I knew everything. My naivety only became apparent a few months later, and then again, and again… I had no idea how much I didn’t know. Understanding this leads to continuous learning and improvement.
Sell your product at the price you need. To ‘prove demand’ for investors we sold laundry at £10 a bag, far below break-even. All we did was prove demand for laundry at £10 a bag. After increasing prices, many customers fled and we’d dramatically shortened our runway.
We focused so heavily on raising money and looking good for investors we completely neglected what was best for the company and our customers, as demonstrated by my last point.
Frivolity and a fear of checking our bank balance resulted in money being wasted unnecessarily.
We became increasing demotivated watching competitors, rather than focusing on our business. My dad once taught me the bigger they are, the harder they fall.
The best way to raise money is to not need it. If this is impossible, have awesome metrics and play hard to get because the moment we became desperate we lost our biggest investor and £300,000.
Following on from my last point, we ran out of options when we agreed to exclusivity with a single investor. After months of prolonged communication with lawyers we grew desperate and lost investment. Don’t put your eggs in one basket.
Not seeking quick deals with investments and acquisitions was our biggest pitfall. Waiting for investment left us stagnant. The longer investors had to think, the stronger competitors grew and the more doubt crept in. This also relates to my earlier point about not needing money.