I started building my first company, DesiMartini.com back in 2006. It started off as a very different idea from what it eventually became, but over this time frame, I've learnt a lot of fundamental learnings that would've really helped me when I first started out as an entrepreneur.
The idea WILL evolve: We started with the idea for DesiMartini to be a global platform for Indians to date, and we believed that this was it- the final version of the product will be this, and nothing else. From the time of launch in 2006, to before acquisition in late 2007, it went from being a dating platform to a social network. In 2008-9, when Facebook entered the Indian market, it evolved from being a pure social network to a social platform for movies and entertainment. Over time, it's moved deeper into being an entertainment platform. My second company started off as a pure ecommerce play, but over time we found that purchasing prescription glasses and even sunglasses online was harder for consumers than we had imagined, so we developed an omni-channel commerce play where consumers could buy online or offline and have an integrated experience.
Listen to your potential users before launch: We didn't do it as much. Even before you launch, talk to your potential users. Try to understand their needs and gaps. Is this a potential gap that they have, and do they feel its strong enough that they are hacking a solution together for it. For example, DesiMartini was meant to be a dating site for Indians. We were convinced that it was a need, because we figured we would do it. We asked a few people, and discarded those responses that negated the idea. Note: If you ask your friends/family about your business idea, they may not negate your idea clearly to protect you from rejection, so ask people who will be brutally honest with you.
I recently read something very apt about latent markets by Naval Ravikant,"A good sign of a latent market is that your users are willing to stitch together a solution by hacking together multiple products"
Thinking that more features will fix it: Oh, we did this. and so much of it :) Within a few months of launching the dating platform, we realised it's not working, so we changed it to a social network. And building a general social network is hard. You need to have a very clear value proposition for the user. Ours was fuzzy - we came from a dating view, and turned into a social network. To create more engagement, we figured, throw in some games, throw in some horoscope, jokes and other casual content, that'll create more stickiness. Throw is some other tricks and see what sticks. But it didn't work. Because we weren't truly addressing a gap for users. This is also a function of not understanding to user needs deeply. And this isn't a function of not talking to users. We did plenty of user interactions, but we were looking for answers in the wrong places. Most users don't know the gaps they're facing, and if you ask them, you'll go down a wild goose chase. I mean, who wanted a Facebook, or a Whatsapp, or an Amazon or an iPhone.
There is a famous quote attributed to Henry Ford: “If I had asked people what they wanted, they would have said faster horses.” Customers can easily describe a problem they're having — in this case, wanting to get somewhere faster — but not the best solution
Know and respect your competition: Your competition is real and probably smarter than you. Don't discount their abilities or strategy. I've seen myself and other entrepreneurs do this at their own peril. There is a balance to maintain. Have your strategy, and follow it. But keep an eye on the market, and what it's signalling. Never fixate on your competition, else you'll be following their strategy. Also don't laugh at other's ideas or failures. I did. I had sold my first startup, pivoted that into a new model, and had started my second startup on a solid platform. I remember making fun of a competing organisation's failure, instead of trying to go deeper and understanding reasons for their failure and learning from it. This was a market signal. The better move would've been to reach out to the fellow entrepreneur, share the pain of building their company, and understand what really went wrong.
Break your startup building into phases: Building a startup is hard! First of all, congrats on taking up this daunting task, but here's what you've effectively taken up: "I have this new idea which the world really needs and I'm going to build it as a company in a way that other companies haven't, and I'm going to make a massive company at it, that's going to be wildly profitable." That is the dream, my friend! Let's break that up into phases: 1. Validating the idea: confirming the world actually needs it. This is the phase from launching to getting to Product Market Fit. 2. Once you've hit PMF, making the business model work 3. Once you know the business model is working at a certain scale, then its about replicating and scaling into a large business. Getting to each step itself is hard enough, so be kind to yourself as you go down this path, and take it step by step. Solving all 3 together often doesn't lead to much.
Talk to your peers: I don't think we really knew who our peers were, what they were doing, and how were they solving problems they face everyday. Find other entrepreneurs- Talk to them about how they're solving problems that you're facing. They're likely facing the same problems you are. Have a local community. Entrepreneurship is a hard journey- knowing other people in the same journey will help.