3 Things I Wish I Knew When I Had My First Business Idea
They would’ve avoided numerous costly mistakes.
Martin here. Welcome to another edition of Founders’ Hustle!
I write bitesize newsletters containing actionable insights and insider knowledge across the full spectrum of company building from inception to exit.
Today’s newsletter is primarily for subscribers who are justing starting out on their startup journey.
If you’re at the very earliest stages of brainstorming startup ideas, or have a “killer idea” that you’re working on but havn’t launched yet, I’d like to share personal mistakes I made at these points that were costly (that I never intend to repeat again).
Let’s get started…
I founded my first company back in 2009. At the time I had a 9–5 job. It was a side hustle that blossomed into a full-time, fast-growing startup.
I had never done anything like that before. My job wasn’t even in the startup world or tech, but corporate banking.
In short, I was naive in many ways, and this transferred through to how I approached product and business model ideas.
Sometimes this naivety manifested as a strength. For example, I had no preconceived notions or “burden of knowledge” holding me back from trying new product initiatives.
But, other times, it manifested as a weakness. This had a negative impact on productivity and opportunity, I'm sure of it.
If I could leap back in time and be my own coach there are a number of things I’d tell myself to do differently that would’ve made a material difference in the early stages.
I’m not talking about a specific product or business decision unique to my business, but methodologies and practices that are transferable across startups.
If you’re just starting out with your first company, or are thinking about it, I’d like you to know these three key things. So here they are.
1. Ideas aren’t everything — just launch
I held a false view that the product idea was all that really mattered in the success or failure of a business. Overweighting the significance of this leads to procrastination since, I tried, foolishly, to derisk my startup endeavor by trying to think up a product idea that was just “perfect”.
So, I spent way too much time brainstorming product ideas before actually committing to one. Month after month, for the best part of a year, I went around in circles thinking up new product ideas or returning to moderated versions of older ones in search of the “holy grail”.
In reality, you only learn what product ideas work and how to get there by doing not just thinking. Build something and get it out there. It doesn’t even have to be a bare-bones product to start with, just creating a landing page to test a hypothesis will reveal a lot.
The product idea it took me one year to settle on failed when I launched it. So, I should’ve just tested the first viable thing that came into my head in the cheapest and quickest possible manner.
It was other key attributes, which I had initially underestimated as a first-time founder, such as execution, tenacity, and ability to profit from learnings that really made the difference. Not the idea.
The experience from launching the first product led me to launch a second product, which turned out to be a big success.
I would never have launched the second successful product without failing with the first. Ideas alone do not make or break your startup.
2. Don’t keep your idea secret
The second false view I held was the belief that I should keep fantastic product ideas secret and not tell anybody. Otherwise, the thinking was hordes of people will steal and use them — particularly competitors. Companies sometimes start off in “stealth mode” for this reason.
Don’t do this. Tell everyone about your idea. Shout it from the rooftops. By doing this you will learn a ton, make invaluable connections, and build visibility for your company from customers and important stakeholders in the industry.
In reality, no one is going to copy your idea before you launch. Truth is, most people won’t believe in your idea enough to actually commit the effort to copy and build it.
It takes a huge amount of energy, time, and resources to launch and grow a business. Anyone you talk too would have to have the same conviction levels as you, the founder (super rare), as well as the ability to pull it off, in order to copy you.
That won’t happen. People you talk to are too busy and invested on their own path to take such a detour and huge risk.
Some of the best product ideas in history were shared with highly capable people (prior to their launch) that could’ve copied them but didn’t for either a lack of absolute conviction or other obstacles (inertia). One example is the iPod, which I wrote about briefly in a previous newsletter.
Once you launch and have traction, that’s when you’ll be copied. I’ve experienced this firsthand.
If you’re still not convinced, think about what would be the easiest path for anyone you spoke to about your idea to profit from your idea if they loved it.
It’s not copying your idea and building a new business or product line from scratch. The much easier path is to either join you as a team member or simply invest in your company. Both scenarios are potentially a win-win for you.
3. Other people don’t know if your idea will work
The third false view I held was the belief other people would know, or have a good understanding, if my idea would work before launching it. Generally, I thought this of entrepreneurs and investors, but more specifically it was folks from the given industry my idea was targetting.
In reality, no one knows if your idea will work or not, so you shouldn’t be overly discouraged by negativity. Don’t let it put you off testing a hypothesis that you believe has merit. This includes feedback from executives in the industry you’re targeting.
People with prior knowledge of any given market are more likely to be prejudice against an idea that’s perceivably radical to the status quo. There’s a reason Airbnb wasn’t founded by alumni of Hilton or Marriot.
The people you talk to may be very experienced and smart, but no one can know for sure. Otherwise, VCs would only invest in unicorns and successful companies would only release hit products. No flops.
The only way to find out if your product idea is viable is to test it in the wild.
To be clear, I am not suggesting you should avoid speaking to experienced executives, entrepreneurs, and investors. Quite the opposite.
Some of them may believe in your idea, and for those that don’t, its absolutely worth taking the time to pick their brains! Where do they see obstacles and challenges, why?
There’s usually a treasure trove worth of industry information and detail you can glean from speaking with such people that will help you build your business, so I encourage it.
They may not believe in your idea, but their feedback and insight can help you flesh out your product and growth hypothesis in a great many other ways.
Until next time,
Credits: Thanks to Christian Erfurt for the image.
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