3 Big Mistakes You Should Avoid as Startup Cofounder
Date: January 10, 2021
The number of young people in Bangladesh is now record-high with the possibility of demographic dividend. Although the proportion of entrepreneurial and startup mindset is on the decline, due to that large number of young people, we’re seeing many passionate entrepreneurs recently.
Startups are unknown entity. You and I will face some new situation every day. We will take decisions that we have not taken before. So, mistakes happen. And, the scary part is that some of the mistakes are proven as mistakes long after the decision was made. Sometimes, it hurts the business a lot.
In this article, I will share 3 mistakes that I made as a startup co-founder, in the hope that you will get informed before and will think twice before making these decisions. You and any other person may disagree or agree with what I’ll tell you. And, that’s Ok. I’m sharing just my real-life experience and thoughts.
So, let’s get started.
1. Using ready CMS for everything
Mr. G and his friend started an EdTech platform using WordPress. Because it was easy to start with, they did not know if there is market demand and most importantly, they did not know about its scalability problems. Then, there were good demands in the market and revenue started to flow in. The platform worked mostly well for about 1.5 years but then problem started to arise. At first, Customers were complaining about capacity errors. So, they bought more server processing power and memory. It worked for some months. But then the problems appeared again and in a more gigantic manner. Database tables crashed, tons of error messages, website was inaccessible frequently and the worst? Some user data were lost. In the end, it seems that time and effort saved by using WordPress is equal to time and effort wasted because of it.
So, now, what actually went wrong and what you should do to avoid it.
CMS is a two-edged sword. It is good for prototyping or MVP. But, when it comes to scaling, Ready-CMS like WordPress are the worst. Look, if you want to run a mid-size Blog and News website, CMS like WordPress is really good. But, if you want to grow, you must throw it away as soon as possible. WordPress has problem in its core architecture that makes it unscalable and less secure. Here are what are going to happen: Loss of data and data quality issues. poor rating, poor branding, internal operational inefficiencies and moreover decline in revenue.
The truth is that nobody likes a website with bad user experience. Company like Myspace died because of using some unscalable CMS technology. And, when they understood that they need to change it, it became too complex to change the tech.
Now, you may think building tech requires lot of time, human capital, lots of engineers etc. Yes, at the start, it is almost impossible to hire people to do this job. But, in the 21st century, knowledge of web development is abundant. After crossing MVP and first revenue generation, either you should hire a technical co-founder/CTO or start building on your own. You do not need to solely dedicate all your time for website development. Make it part of your routine work and develop continuously. This way, when you will reach near-growth stage, you will be completely ready or at least you will have a solid foundation. And, it will save you money also.
One caution at last, do not focus on the technology itself, focus on its applicability. For example, using a new web framework or a fancy AI model may seem just cool to you. But, using the right tech and understanding what business value it will give is really important. The key words here are: Scalability, reliability and functionality.
2. Customer Support vs Customer Feedback and Taking it Too Seriously
G started the e-learning platform which was very new in that geography and people did not understand much how to use that. Also, compared to western world, people were much interested in phone calls. After realizing all these, G and his co-founder started taking customer calls through their personal cell phones. It felt good at first, and, yeah, it felt good for about 1.5 years. Then, G realized they should hire someone for it. Because, the job was repetitive and taking up important work-times that could have been spent in much important things. But there was a problem, where will they find a customer support guy that will perform just good enough? The bar was seemingly high for new recruit. And, it took another 9 months to finally recruit one.
Don’t get me wrong. Customer support is important. But almost all of the time, it is a repetitive task. It takes up much of the working time and the time-table is unknown. And, it does not result in much personal development as a founder which is really necessary. At the start, it may help you learning how to explain your product to mass people, but after 1-2 month, this advantage diminishes.
Now, the other part of interacting with customers is that you must take feedbacks. It is really important to take feedbacks, analyze them and implement them. Without it, product development becomes ineffective and irrelevant. This is where founders must be serious. Taking the feedback is just tip of the iceberg. Implementation and getting feedbacks continuously are part of a loop, that must be carried on as long as the business goes.
Sometimes, people misunderstood and mix customer support with customer feedbacks. It is a big mistake. What would happen is that you will get in the loop of customer service and would not be able to work on customer feedbacks. As a founder, you must focus on strategic and brainy stuff because nobody but you have the clearest view of the business idea and vision. Time and energy are limited. So, spend them wisely.
When revenue starts to come in, hire a customer support guy. Hire an intern or part-timer if full-time is not affordable. You may think that he/she may fumble and quality may be poor. Yes, it’s true for first few days. But, eventually, you’ll need to hire at this position. So, hire fast, it would enable a soft-landing. Eventually, the support guys will learn to do better and you’ll have a ready documentation. And, at growth stage, you’ll have a clear advantage over your competitions.
3. Late Hiring and No Automation
As a whole, every part of a business is important. From staff to CEO, everyone’s work is important. But you must spend human resources efficiently including yourself. Founders specially those who are younger have a dilemma. They think, “If I hire someone, will he/she perform well enough?” The answer is Yes and No. It depends on the role and how perfectionist you are. The truth is that you do not need perfection everywhere. And, even if you need it, then, hire a perfectionist. Otherwise, same mistakes will be made by your future hire that you’re making today.
Hire fast to remove manual repetitive tasks from your task list. For example, if you’re not a fintech, finance is not the core value of your business. We often think about hiring or being fancy CFO. But, to be very honest, startup do not need a CFO, unless, it raises series VC funding. A mid-level accountant is very good enough manage the financials. Of course, as founders, you must know your monetary condition and decide based on them. But that doesn’t mean you have to do all the petty works yourself. Reviewing the reports once a week is good enough.
One of the biggest advantages of tech startups is automation. It is a continuous procedure. You can’t automate everything at once. If you find ready tools, start using it. If you don’t find ready tools, build yourself. But, start early. Doing more in less time is a big advantage.
One note is that scope of automation sometimes depends on the web technology you’re using. Good technology enables higher scope of automation. Bad technology disables this scope. So, be aware. And, overall, the most important pre-requisite of automation is to have a mindset for it.
It is importance to understand and aware of those mistakes I mentioned above as early as possible. As the business grows, flexibility diminishes, so, it’s important to take the decisions early. It is critical to understand that you are the business. If those errors hurt you, that means it will hurt your business too and vice-versa So, be careful.
All that I have said so far are from my own experience. Maybe, it will be different for different people. Hopefully, those information and ideas will help you in some way. Best of luck for your venture!