It’s been a while since the RigBasket team has directly shared a post. We have been busy travelling across the country, visiting warehouses, and trying to be more active in the Houston community. August is almost over, as are the Olympics. We wanted to take this Sunday to share with you some of the startup pitfalls we have come across during our short existence. We hope it may benefit some of your ventures. To those of you who already know way more than us, we hope you can contribute in the comments section.
#1. Thinking that finding the watering hole first is your permanent advantage. It is inevitable that other people will discover your market, or that you will discover that you were not actually first to the idea. We are just going to put it out there, but Instagram Stories look remarkably like Snapchat stories. It is important to emphasize that patents only apply within certain jurisdictions, not globally, which is why you find so many perfect counterfeit iPhones in Asia. Startups are truly marathons to dry up those watering holes, and the best way to stay relevant around the pond is to drink faster by innovating faster. Otherwise, the search for new watering holes is a bit like wildcat drilling.
#2. No validation of problem existing prior to building solutions. The world is becoming more customer-centric. Thus, a “build first mentality” is risky business for cash-strapped ventures. Too many cool technologies with no immediate applications. What we think is a better approach now is finding a problem that can be solved in many ways, and overtime letting the customer base determine which solutions should be generic offerings. Not all problems have one-size-fits-all solutions, and not all solutions need to be custom-built. Validation that the solution can create and grow real measurable value (users, money, goodwill) is a whole other discussion.
#3. Picking too many races to run. Let’s talk Olympics. There is a reason why Usain Bolt doesn’t run the marathon, and Mo Farah doesn’t line up for the 100 meters. Each runner “focuses” on succeeding at a few activities instead of competing everywhere. We know that Michael Phelps exists, but his type of winner apparently come along every 2000 years. Too often, new startups seek to compete in all races. Everyone wants to do everything. The sooner you pick a few key services you know you can be good at, the sooner the focus will channel into clear, concise, and simple offerings.
#4. Not listening enough and questioning the criticism. We know it’s your baby, but criticism simply means something about your current offering isn’t perfect yet. Pitch, keep learning what is missing, why people don’t think it will work, and then go back to the drawing board to fix it. Figure out why does your product help them compared to what they have right now. How is their life easier?
#5. Having too many C-level people. The “Chief” entitlement leads to many early startup members aspiring that they will manage people one day, than actually doing relevant work today. Whether in the corporate or startup world, that title needs to be earned. We have had a tremendous change in productivity by assigning responsibilities instead of roles. Surprisingly we are more specialized now, but have the ability to wear more hats too.
#6. Too much time perfecting pitch decks, not enough time talking to customers. If you do raise money, and then you can’t sell to customers, well what next? We see pitching as an opportunity to validate our current company direction, and to meet people who would otherwise be exclusive. For now, we spend more time claiming mileage for client visits.
#7. Not having your dream team available. Many people know exactly who they would want to bring on if they had the resources available. For example, our list has 47. However, really talented people have a lot of stuff going for them in their lives (great careers, great social lives, etc.), and asking them to jump into the abyss, even with traction, is a hard sell. Work with who you have, and make sure the co-founders both have the independence to run operations.
#8. Not publicizing your startup’s existence, while you are building a product. Yes, we understand “stealth mode”. However, spreading the word that you are building something to solve a problem could give you an earlier launch pad to pilot, test, and tweak your early product. Many customers are going to say “come back when you have a product”, but it’s not the product they end up buying. It’s your on-going commitment and service to solving their problem. In B2B, sales cycles can be super long, so you need to start building customer relationships ASAP, especially if you don’t have any to begin with like we did. Marketing has turned out to be more of a journey for us, rather than a series of fixed campaigns.
#9. Not being super conservative with your current assets until you have de-risked the business model and achieved what you defined as “market validation criteria”. Here’s a simple response to any time there is pressure to spend on something you don’t think has any current return. “Would you pay for it?” If they say yes, let them. Let them test their undying belief of the value of it. If they prove you wrong, they deserve the credit. If they don’t, they learn the importance of cash flow and net profit at a very personal scale.
#10. Waiting for unicorns. Supply today’s demand. Build your unicorn profiles for customers and investors in the meanwhile. Work with the resources you have today. Don’t wait for Thiel, Google, or General Electric to take notice, that might take years. Clearly your only plan cannot be finding unicorns.
#11. Not understanding velocity. Velocity is what everyone gauges you on. Do not lose momentum or energy. Every second and the direction counts.
#12. No mentorship. It’s truly respectable to build businesses with zero help, but chances are if you couldn’t tie your laces as a kid, filling those new founder shoes is probably going to result in some trips. If you don’t know the answer, why not just ask someone? Solid mentorship prevents so many pitfalls, and solves problems faster. We contact technology partners, old professors, ex-startup bosses, venture capitalists, government agencies, family, friends, and the local Station Houston community whenever we need clarification.
It is inevitable that we will continue to run into many more pitfalls and obstacles as we progress. We’ll try to keep you posted, but if you ever have questions, feel free to drop us a line on Twitter, Facebook, Instagram, rigbasket.com, or LinkedIn Messaging.
On an ending note, we would like to congratulate the world’s Olympic athletes, and thank them for reminding us what it takes to be relevant at a global scale.