In 2007 Vinicius Vacanti quit his highly-paid job in finance to take on life as an entrepreneur. In a short post describing his reasons for doing so, Vacanti says that most of us haven’t faced the possibility of real failure, and entrepreneurship is a way to test your limits by attempting to create something of real value:
A scary idea started creeping into my thoughts: what if I could build something? Wouldnâ€™t I always wonder? Wouldnâ€™t I regret it? Wouldnâ€™t it eat away at me over the years?
And, thatâ€™s when I realized that I didnâ€™t actually know if I was good enough because I hadnâ€™t really failed in life (at least not professionally). Most people donâ€™t really fail. We tend to take the job that we think weâ€™ll succeed in. We are hesitant to reach. And, if we do reach and succeed, then we donâ€™t reach again.
The only way to know how good you might be at something is to fail trying it.
And, thatâ€™s when I decided it was time to test my limits. It was time to really reach. It was time to quit my safe job and walk straight into almost certain startup failure.
There’s nothing mind-blowing here, admittedly — I just love how Vacanti phrased this.
In 1980, as a $5-an-hour part-time office manager,Â W. E. Peterson joined the small company that would go on to becomeÂ WordPerfect Corporation. Then, twelve years later, after helping grow the company to half a billion dollars in annual sales and becoming the Executive Vice President, Peterson was forced out of the company and set out to chronicle the rise and fall of WordPerfect in his book,Â Almost Perfect.
You can read Almost Perfect online like I did after hearing about it from Jeff Atwood two years ago. Why am I posting this now? Now that the book has a Kindle version I’m re-reading itÂ and liked this paragraph of business advice from the afterword:
If you read [Almost Perfect]Â hoping to learn more about running a business, then I hope you noted the parts about teaching correct principles and allowing employees to govern themselves. In spite of the problems I had understanding and implementing this philosophy, I am convinced it is the best way to run a business. In today’s competitive environment, businesses can no longer afford the overhead of one supervisor for every five or six employees. As organizations flatten and supervision decreases, employees will make more decisions on their own and govern themselves much more than they have in the past. If a company is to function effectively, its employees must have a good understanding of what is expected of them. Very small organizations may be able to find success without defining and teaching correct principles, but any business with more than 25 or 30 people must get organized.
Verifiable, Wesabe, Storytlr, TwitApps, Vox, Swivel and EventVue: All companies or products that no longer exist after preventable problems caused their downfall.
37signals collects their stories so that we don’t repeat the same mistakes, presenting a set of brief post-mortems on failed startups.
The recurring issues seem to be: solving problems that the world isn’t asking for, not having a feasible revenue model (specifically, the difficulty in moving from a free to a paid service), the complexity in scaling an idea from a prototype to a functional product, failing to articulate clearly the benefits the product will bring and failing to focus on the most important product/feature.
In addition, there’s the issue Wesabe encountered: competent competition in the form of Mint:
Mint focused on making the user do almost no work at all, by automatically editing and categorizing their data, reducing the number of fields in their signup form, and giving them immediate gratification as soon as they possibly could; we completely sucked at all of thatâ€¦ I was focused on trying to make the usability of editing data as easy and functional as it could be; Mint was focused on making it so you never had to do that at all. Their approach completely kicked our approach’s ass.
You’ll hear a lot about why company A won and company B lost in any market, and in my experience, a lot of the theories thrown about â€” even or especially by the participants â€” are utter crap. A domain name doesn’t win you a market; launching second or fifth or tenth doesn’t lose you a market. You can’t blame your competitors or your board or the lack of or excess of investment. Focus on what really matters: making users happy with your product as quickly as you can, and helping them as much as you can after that. If you do those better than anyone else out there you’ll win.
When someone asked for advice on How to become a millionaire in 3 years on Hacker News, serial entrepreneur Jason Baptiste took the task seriously providing thirty-seven things to focus on when starting a company, including:
- Market opportunity
- Inequality of information
- Surround yourself with smart people
- Your primary metric shouldn’t be dollars
- If you do focus on a dollar amount, focus on the first $10,000
- Get as many distribution channels as possible
- Be a master of information
- Be so good they can’t ignore you
- Give yourself every opportunity you can
- Look for the accessory ecosystem
- Make the illiquid, liquid
- Don’t be emotional
- Don’t leave things up to chance
- Raise revenue, not funding
- Don’t get comfortable
- Don’t skimp on the important things
- Keep the momentum going
- Listen to (or read the transcriptions of) every Mixergy interview you can
- Learn how to filter
Jason goes into great detail for each item on his list, starting his post with the clarification that these tips are for making a success of a business endeavour in “a short time frame” (i.e. not specifically for making a million dollars in three years).
From the early days of development through to the release and refinement of the final product (and further), Patrick McKenzie has been chronicling his journey as a one-man Micro ISV (Micro Independent Software Vendor).
McKenzie has recently compiled a fantastic list of his best posts and this acts as a list of practical advice for small companies on topics such as SEO, marketing and adjusting to the self-employed lifestyle.