Starting a business is always a unique experience that depends on a hundred different factors, from personal and professional background to the latest economic crisis. But nevertheless, all founders go through the same stages, which means we can learn from the mistakes of others.
My team and I launched Rainex’s MVP in February 2023. Within that time, we got to get disillusioned, go through all the stages of acceptance, do a sharp pivot and go forward again. And so for the second birthday of “my baby”, I want to summarize what I think were the key failures and what I would do if I were in that situation again.
1. Build the product first, research whether it's even needed later on
Many startups are born out of an idea, excitement and a desire to do something better for others.
Unfortunately, that’s not the case for me. I didn’t have any sudden insight or an amazing idea. My startup was born out of necessity and impulse. Circumstances were such that I had to develop independently. Life pushed me to become a founder.
I looked back, analyzed my experience, chose a few ideas from the most successful project I had worked on. And finally, I started to study my future competitors and the market where I would like to have my niche.
In the moment, it seemed that just to look at the success of others to create my own improved copy was enough. I had chosen a segment and now the business would take off. And that was my most costly mistake of my entire life.
I spent many months studying my competitors, their products and the market. I studied everything but the most important thing: future customers.
I had no research into the needs of our potential customers, no understanding of the jobs our product would do for them, no value, no distinctive competitive features. Just an analog with improved UX and UI design.
Result: MVP is ready and…nobody needs it. The first demos revealed that customers didn’t understand how our product would make their lives easier and more comfortable. They refused to switch from their current processes to our platform as they didn’t see what value they would get for their business if they spent their resources and efforts on it. Bottom line: over 100 demos and less than 10 customers.
How to avoid: It’s unfortunate that the JTBD product creation methodology came into my life when I didn’t just step on a rake, but hit a decent two-year bump.
I can’t help thinking about the results my team could have achieved if we had researched our potential customers from the beginning, segmenting them correctly and looking for jobs they would want to do with my product.
My advice: Before starting any development, understand the JOBS the product will do for the customer and what expectations the customer will set for it. Interview in-depth people who know nothing about your solution, but do the jobs that they will be able to later “hire” your service for and close tasks without their efforts.
We were surprised that one of the expectations of our future client was: to free up time for lunch coffee by automating processes. Now he drinks delicious Italian coffee on a daily basis:)
2. Don't hesitate to implement all the customers' wishes
You don’t need me to tell you about prioritization. But one thing is to know it, another is to use it correctly.
We spent 6 months making the basic functionality, and the devil was in the details. Our goal was to catch up with our competitors in terms of quantity and quality of features and we successfully blindly followed it. Months of development were spent on work that customers didn’t need.
We realized our other mistake was trying to create a one-size-fits-all tool. Trying to meet the needs of all business segments on a subscription model at the same time, no one ended up satisfied.
And then we believed we had found a gold mine – we would just listen to everyone! Each customer had their own opinion, expectations and objectives. I said in the previous point that they should be listened to, and I don’t take it back. However, instead of analyzing the priority and real value of feedback, we were throwing ourselves into creating yet another feature. We were creating customers’ “wishes”, although customers themselves sometimes didn’t fully understand what they wanted to achieve with this or that functionality.
Result: 13 months of grueling development, many product “improvements”, 4 useless features and a minimum of clients. We listened to feedback, implemented new functionality and further….something else needs to be modified, added, deployed, integrated, improved.
My advice: Customer feedback is essential, there’s not even an object to argue about. But before you add something “very important” for the next client, ask them about the ultimate goal of this “necessary” functionality.
The important thing to remember is that you can’t please everyone, every customer will always be missing something, every customer will want to add something. It’s a never-ending cycle where you need to be able to stop and ask the important questions: Is this really important? How many clients will this be useful for? How often will it be used? Is there not an easier and more effective way to fulfill this need? etc.
Now after talking to the client, we realize that there are 5-8 variations of possibilities to meet their needs.
I’ll share with you a recent example that genuinely made my team laugh. We have a lead with whom we have been in contact for a few months now.
During the first demo with him, we mentioned that we plan to add an email identification and verification feature soon. (Rainex.GetLeads is a lead generation tool) The answer is “I will start the work as soon as it’s available”.
In the second demo he saw the launch of automated email outreach in our roadmap. The answer – “This is exactly what I need! As soon as it’s available, I’ll be your client the very next day!”
A couple days after the launch of the new feature, we met with him again to hear that he would be waiting for our next deployment. Wanna take bets with us on whether it will happen?
3. Set the product pricing? Just put the price 5 bucks lower than the competition
This is the most absurd moment in the entire existence of our product.
When it was time to set the price, we decided that we could attract more clients due to the low price compared to our competitors.
A couple months after creating MVP, we launched on AppSumo. The launch brought us over 450 sales – the excitement of a newly founded startup! But these were LTD customers: some bought for the future, some for resale. Only a small part of them started to actually use the product and were able to give quality feedback. And here we got the main insight from people who for a penny expect to get the functionality that can take their business into space at the snap of their fingers. A good product can’t come cheap.
Many have a direct correlation low price = low quality. We faced the argument that a good product can’t cost little, so it’s likely to be weaker than products from expensive competitors.
We decided to do an experiment and almost doubled the price for a few months. And… we got a new objection – you are new on the market, the price of your product cannot match the same value as your big competitors (let me remind you that we made an exact copy at that time:)). Can you imagine how confusing that was?
Result: Running forwards and backwards with the cost for 6 months, puzzled clients, and frustrated team. When there is no understanding of the value of the product, there can be no understanding of how much the client is willing to pay for the service and how to convince them to switch from their current solution to yours.
My advice: Research the work your service does for the customer and its value to the customer through in-depth interviews (going back to the tip about JTBD). The cost is not only made up of the material parts, but also the emotional and social work. Clients are willing to pay more for time and nerves saved, convenience and confidence, etc.
Find out how much time and money a potential client spends on these tasks now. Based on this data, you will understand how much they are ready to pay for your service to perform these jobs instead.
4. Delay marketing for as long as possible
I initially focused on the development of the product and website, trying to bring them to perfection. But the primary trust that encourages potential users to try the product is not created only through the service’s features and pretty website. The key to credibility is the personal brand of the founder and team, who consistently prove their expertise in their field, are passionate about the idea, and clearly understand what they are doing and who they are doing it for.
Another lapse was to underestimate the importance of social proof on external platforms. And I’m not talking now about 2-3 articles on Medium, Reddit and Quora and 10-20 posts on LI and FB. This requires a much more serious and comprehensive approach.
Result: When the MVP was ready, I realized that I needed more time to promote my product and build my reputation as a founder with deep industry experience.
My team and I spent another half a year finding platforms, creating a lot of content, and coordinating publications. It wasn’t until 6 months later that we started to reap the fruits of our sowing – leads from our SEO promotion efforts. And within a limited advertising budget, as in many startups, every free or inexpensive lead is worth its weight in gold.
My advice: Once you’ve started to bring your idea to life, create a plan to promote it. I’m talking about a full-fledged marketing strategy for the entire period: from the Idea to the first milestone for you.
Analyze your main competitors – there are services that allow you to find all their publications on external sites. Divide them into paid and free, as well as by content type: posts or articles. Choose the most relevant sites for you, make a schedule of content creation and requirements for it. Start promotion alongside development.
I highly recommend involving your team in this process. Everyone has something to share. It could be an article about development, marketing, sales, management, and more. Show that you have a strong and expert team so the interest and trust in your product will continually grow.
Don’t put off what you should have done yesterday!
5. Look for the easiest way to get the smallest result. Get 7 sales instead of 1000
Like all founders, I lived in hope and faith in my product, expecting a surge in sales after launch. But the miracle didn’t happen. The first submissions, demos, and clients brought me back down to earth.
We couldn’t compete with already successful products on the market, as their budgets were much bigger and their sales and marketing teams were much larger. Every lead we got was fought for and too expensive.
When we realized that in the US and Canadian market we could only compete through SEO and social proof, we decided to go for the less competitive Indian market where the cost per lead was much lower. This really huge growing market was our crucial mistake.
Result: At first we thought we had finally found our market: several dozen leads a day, countless demos and sales meetings. We even took a trip to India for face-to-face customer meetings.
However, after a few months, we realized that the conversion rate from all these efforts was practically zero! Thousands of leads, hundreds of meetings and only a few willing to pay for the service.
India is indeed growing quite fast, but the mentality of people who are used to not paying or paying very little cannot be broken so quickly. Most of them would rather use an inconvenient and complicated but free product than pay for quality. We were not ready to change the solution, adjusting it to these requests.
A small remark. I am not talking about the Indian market as a negative one. Each region has its own specifics, pros and cons. Besides, maybe this is just my subjective experience.
My advice: Define your market initially, analyze it and understand how people buy there and what is valuable to them.
If it’s a highly competitive market and you don’t have enough budget to compete with the big players in your industry, focus on SEO promotion, participating in podcasts, co-promotion with related products, developing your social media and publishing your customers’ reviews on platforms. This will bring much cheaper and longer lasting results.
You should not spread yourself across different markets, as I did, losing a lot of strength, energy and faith in yourself, your team and your product.
Bonus Tip. Use stress as a development engine
As you may have gathered from all the text above, stress is my annoying buddy that doesn’t want to get off my back. There are a few things that help me deal with it.
1 – It’s not the end of the world. All difficulties in life are relative. There are days when a broken nail seems like a universal tragedy, and there are days when life is falling apart and you’re standing strong. The main thing is to remind yourself that this is temporary, that everything is fixable, that you can always start over.
2 – The experience of others is your experience, if you can take it. I’ve read quite a few articles like mine and they really help. First, you remind yourself that you’re not the only one facing challenges in business. When everyone is selling their successful success, that’s important. Second, you can pick up some helpful tips.
3 – Go out and live a life outside of work. It’s easy to get swept up in these challenges, so it’s important to be able to switch. My way is my family, my dog, and traveling, even if it’s the smallest of trips. It helps me distract myself and reboot to clear my thoughts and address work issues
Mandatory part of the article:)
An article about business can’t possibly exist without a mini-ad and a call to action, right?
As you’ve read, I’ve learned my lessons well and indeed my team has come up with 2 great products.
Rainex.GetLeads is a lead generation tool: relevant prospects, relevant and verified contact information, AI personalized messaging and streamlined outreach. GetLeads helps you reach quality leads faster and in greater volume so you can focus on closing deals.
Rainex.Billing is a billing and subscription management system that allows subscription-based businesses to automate processes, flexibly manage plans and subscriptions, seamlessly receive payments, retain customers, track metrics, and generally improve all related processes.
I know we still have room to grow and get better, but right now I believe we are on the right track!
Thanks for reading and good luck to you! I would be happy if you share your experiences
