Honestly, when there are so many “successful success”, it is difficult to remain indifferent and not to say about yourself. But, as practice shows, the success cannot be copied, but mistakes all young companies make about the same.
As a local company with four years experience “breaking wood” on my head we think we have something to share and something to warn. In General, below is our top 5 mistakes we do not recommend to repeat start-UPS. You they still repeat, so below — our findings.
What will be discussed
To better understand the context — some introduction about what Eggs TV. It’s like Apple TV, but for business. In fact, it is a product that allows everyone to create their own video channel to broadcast on the screens. Tasks completely different from additional sales to generate UGC content in social networks.
Error 1. Look for investments without trecchina. Any
Money are equity and debt. Our company was founded on borrowed money Capital from Eggs, a small cooperative of like-minded people. The money made Minimum Delightful Product and the traction in sales.
The total size of the loan was about three million rubles. Have relied on debt financing, like many other startups. What are we worse? This decision “ate” seven months of life.
We passed the acceleration program Startup Sabantuy 2015, took the first place among all submitted projects. But to attract money from investors failed, but instead of developing product and customers, we spent a lot of time on papers, schedules, financial plans and other bullshit.
Startup Sabantuy in terms of finding investors didn’t work. Photo from archive of the author
Venture capital is rocket fuel. This fuel is great only for missile engines. Accordingly, your startup must be a such a missile. The rate of increase of income or the number of users in the market B2C — 20% per week, on the B2B market — 50% per month.
From here two consequence:
if you have a rate of growth less, you are a rocket, you don’t need such fuel;
if speed all the same, take the larger timeframe is at least six months.
We received data for three months and made the wrong conclusions. To make MVP better through 3F, a credit or their money. When you have the traction, you have to look for new money.
Error 2. To stop test hypotheses
Our home region — Krasnoyarsk, the main segment of restaurants and cafes. We have worked in this region for four months, but with the restaurants for the fourth year. But the selected region to start, and the selected segment error.
In the first case, we automatically lost the war for the demand. Today, only 3% of the points we serve in this region.
In the second case, the company — B2B, its financial stability depends directly on the stability of the other business projects, acting customers.
Initially, the emphasis was on the area restaurants. Despite a few good cases (for example, to the Black Star Burger), choice of the industry as a whole was unsuccessful: restaurants often close before starting to make a profit for Eggs TV.
The fact that our business model — subscription services. We initially supplied to the customer equipment, video content from its own database, integrate his social networks, that information will automatically broadcast the video.
All is the cost: both material and human resources. So the first months we actually work in the negative.
You need to question everything. Region, segment, VP, pricing model. All this is not a given, and required, without stopping, to test hypotheses, one by one. Circle HADI should be like a circle of hell Dante.
We once stopped and I almost overslept demand in the other segment (real estate developers) and a different geographic market (Moscow). As a result, we now only sign contracts with large developers, who need to show their own TV screens in sales offices. And could much earlier.
Error 3. “Cut” has always
What we put in six months the customer more resources than it pays — it’s not so bad. Initially this term was more because of the desire to ensure that it looked “cool and stylish as Apple.” The necessary equipment for the broadcast is made to order in beautiful wooden boxes with drawing, now I switched to a cheaper and practical option.
The old version equipment. Photo from archive of the author.
We bought the Radxa Board in China, has redesigned their OS to Android 4.4.2/4.2.2 for our needs and started “sawing” his CMS for content management. Actually replaced all suppliers in the value chain. Super, it took almost all three million rubles received as loan Capital from Eggs.
But somehow the beautiful wooden “boxes” is not very pleasing to customers. It did not increase their number, but increased our cost of connection and subsequent maintenance.
If there are providers that can provide ready solutions (even if paid), you should use their offers, especially if in the eyes of the client, they do not have a key value. After we had eaten all our money, we sat down and thought. Then we realized that users need a video, they do NOT need personal account, they do NOT need the beautiful “boxes”.
Push off of the value when prioritizing its expenditures. As a result, now the focus of our work shifted towards value for the client and not on external beauty.
For the client the main thing — speed to changes in video content you could do it yourself with a couple of clicks or via messenger, where there is a personal Manager.
Error 4. To do everything at once
Cryptocurrency is a perfect example of HYIP 2017. And a good example of how to do, if you’re a startup. Many processes have not yet been worked out, when we saw new opportunities in distributed computing and thought to make ICO.
Where many were, but the project failed miserably. On average, it took six months. All this time the main product did not develop, and gradually degraded.
During this time we lost 20% of customers took a step back in the search and the number of leads.
Making new designs — it’s cool and the main task of the entrepreneur. But we realized that if the founders get distracted by the new, their bases must be covered. Need before switching to prescribe hands on paper, the business processes, assign responsibility and explain to them KPI. If not, founders should be involved in the project to 100%.
Error 5. For an easy recipe for success
In an attempt to achieve sales growth we have experienced all the “simple” ways to attract customers. Context? Give two. Targeting in VK? Of course, haven’t you made a group? Sales through franchisees? Great idea. Little did we realize that the channels depend on the audience (Hello, captain obvious!), and do as all is not quite right.
The Eggs TV screens. Photo from archive of the author.
As for offline, it did not work until the end of the direct sales in my Department, we have rushed them to scale and found the first franchisee. The cost of the lump sum of 300 thousand rubles, the income was divided 50/50. Not all franchisees were profitable, and those who have been able to earn an income was obviously less than expected.
Testing the hypothesis, you need to:
find the right sales channels;
to fulfill the internal business processes to scale.
“Work” means to sit down and make a table of who is doing what and what result is expected. If people do not understand the text, you need to sketch, how to do it in their supermarkets many retailers. If the command is typed, and each understands, only then can we grow in size.
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Cover photo: Unsplash
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