Updated 18 October 18
"If you aren't embarrassed by the first version of your product, you shipped too late” - Reid Hoffman
There are many ways to fail. Sending people into rivers on Apple Maps, making a phone that explodes or putting windows on a phone. However, when it comes to startups, the two worst types of failure are failing to try or failing to learn.
It is crucial, in the world of startups, that you expose yourself to the risk of failure. Doing so, can create the necessary conditions for success. Many people are so afraid or embarrassed of failing that they will not even try. These people will not find success in the risky and uncertain world of tech startups. You must remember that investors are in the business of taking risks and they want to find founders and startups worth taking risks in.
If you’re looking to start a new tech startup or trying to get investment in your ideas then failure of some kind is inevitable, no matter how diligent you are. Learning how and when to fail can make all the difference when it comes to long term success. The best thing a founder can do is to have the mindset and attitude that you will always try to learn from failures and therefore avoid repeating the same failure multiple times.
One of the biggest challenges for startups is the management of time. Time is a finite resource and the attention of the founders is a balancing act as it can only be focused on a limited number of areas at any one time. Too many places and you’re spread so thin that nothing gets done. Too few and it’s possible to miss the big picture. The key is to work out what are the most important risks to mitigate and put your focus there. This has the added benefit of the ability to fail fast on what is most critical. It sounds like a negative thing but failing fast is one of the best ways to fail.
Would you rather work 12 months towards building a feature rich, all singing all dancing Software as a Service (SAAS) product that as soon as your customers use it you realise they have no interest in your solution. Or, would you prefer to spend 1 week mocking up a simple prototype to get real user feedback and identify that the solution you first thought you needed misses the mark entirely.
There is a simple matrix that can be used to identify where the focus of the founders should be (we have used early stage Airbnb as an example):
The Risk vs Resource matrix
Identify as many of the areas of risk in your business that you can including any assumptions you have made. Plot them in terms of how risky they are to the success of the business and how easy they are to mitigate or prove. The focus of the founder should be aimed at managing the riskiest areas of the startup. While there may be many easy things to mitigate risk on, the most important often requires the most effort.
Whilst attempting to mitigate the critical risks to your startup you may find that actually your plan A business model is doomed to fail, however this can be the catalyst to quickly move to plan B or C and so on. An important goal for every startup should be to move from plan A to a plan that works as quickly as possible.