I got to thinking about the startups that I was involved with, and what went wrong when they failed. I am an analyst by nature, so I did a postmortem on all of my startup failures. Here are some nuggets from those postmortems outlining mistakes made.
1) Just because it is a neat idea, employs the latest technology and nobody is doing it, doesn't mean that customers will want to pay money for it. Your startup product must have a distinct value proposition to its users.
2) No matter how much money will be saved by your product, it won't sell unless people want to use it. People want to use products that fit into existing processes in their businesses or lives. If it doesn't fit, then it won't be a commercial success.
3) Then there is "Lipstick on a Pig". Oftentimes when our product was not adopted, we sat around the table and decided that we needed a sexier feature, or an edgier look and feel, or the latest in a UX consultant to come and do a new design for us. You can't put lipstick on a pig to dress it up and sell it. Customers will see through that. If they don't use your barebones product, they are not going use one dressed up with new features or a snazzier look. There is way too much emphasis on Look and Feel and looking sharp and UIX and UX and all of the buzzwords that bring in consulting money. The ultimate success of an app is shown by Google which is simple, clean and beautiful, and would never pass design review with these so-called UIX experts.
4) That brings us to minimum viable product. You have to have something that people are willing to use, willing to buy, and willing to share with their friends. Too often we have built apps that everyone said was good and no one used them. We then decided that perhaps we needed more lipstick on the pig. If that didn't work, then we decided that we needed to shave the pig and sell it as something else. All the while, we never had a minimum viable product.
5) We never had a feedback loop. When someone bought our product and never used it extensively, we did go back and ask for feedback, but we never really listened to our customers. When they would bring up objections like "It takes up too much time to use" we thought that they were just making excuses. We never modified the app to fit their time constraints and their business. The correct methodology is to embed someone with an early adopter and keep adapting until they used it, loved it and shared it among peer businesses. We never did that.
6) Before you go and build something and a business around it, you should be able to pre-sell it. It should be that good of an idea. You should be able to articulate the value proposition in ten seconds. The value proposition should include savings in both time and money and/or ease of doing business which is time and money.
7) You should be culturally appropriate to your customer base. We had a designer create wire frames for an app that was aimed at 50 year old, non-computer literate business owners. He designed it like a social media app with gaming, individual photos, reputation scores and the latest in device integration on smart phones. No fifty year old, computer illiterate is going to upload his pic to a business app that is supposed to help him make money. They don't give a damn about being 5 Star users and they don't react to gamification the way that millenials do. Their favorite device is the Blackberry with the full QWERTY keyboard.
So there is the seven deadly sins of startups. How do you know if you have a viable product? Simple. It will be a product that people will want to use. If you get widespread usage, you will find a way to monetize it later. Usage is the key indicator of success.
