Earlier this week I attended a great conference, FailCon, which solely focused on showcasing failure stories and advice on bouncing back from now successful web start-up founders. The likes of Max Levchin (co-founder of PayPal; founder and CEO of Slide), Phil Libin (CEO of Evernote), Seth Sternberg (co-founder and CEO of Meebo), and several other great speakers each told stories of past failures, and how they were able to take from failure the seed of a future success.
This got me thinking about the plethora of silicon valley start-ups that eventually run out of cash and sink in the deadpool. What’s most striking to me about web start-up failures is not so much the volume of them, but the sheer amount of time and money that goes down the drain, when it doesn’t necessarily have to. Too many entrepreneurs are overly certain of the success potential for their new product or service, without seeing viable market data justifying that belief. They draft the business plan, assemble the initial team, secure funding, and start blowing through money before eventually getting the alpha or beta version of the product in front of real, live customers. Way more often than not, they continue injecting capital until there’s none left, and without a revenue-generating business model, they fail.
Several investors and entrepreneurs I’ve spoken to espouse a philosophy that sharply contrasts this approach – build a quick and dirty alpha version on the cheap, get it in front of users, gather user data, and assess the success potential at this point to determine whether or not to continue pursuing the venture with additional funding. The typical target budget for the “Quick & Dirty” approach for the beta build-out is $25-50k. Although I believe this approach has some merit depending on the complexity of the product and available technical resources, it has a lot of pitfalls assuming the venture grows wings. I think there’s a much better middle ground strategy between “Spend Crazy” and “Quick & Dirty” – “Sound & Simple”.
The main problem with Quick & Dirty is that you’ll typically rush through building an alpha version using inexpensive design and development resources (which generally brings myriad technical and project management setbacks), without establishing a stable system architecture that can seamlessly enable future expansion, assuming the market data yields justifiable evidence to forge ahead with the venture. This can often mean having to scrap the alpha version to rebuild from scratch, in turn defeating the cost-saving purpose behind Quick & Dirty. The other problem with this approach is that it’s difficult to gather good, reliable user feedback if the representation of the product is shoddy in design and/functionality (the latter having much greater importance).
With Sound & Simple, the main idea is that you strip away all of the ancillary and superfluous features and functionality to just the core, fundamental feature set, but still build a sound architecture whereby all of the “wish list” features can be integrated later on without having to do excessive code re-factoring. The key here is careful technical development planning, and leveraging the best and most mature open source technologies available. Planning a logical, extensible, and scalable technical system architecture early on to accommodate the core feature set, as well as account for the “wish list” features, will add cost to the Quick & Dirty approach, but its value will pay for itself multiple times over and save everyone lots of time in the long run. Also important to Sound & Simple is creating a simple, yet elegant, UI experience without going over the top, allowing users to evaluate the product on its functional capabilities primarily, without stumbling over usability issues.
The fact is you’ll never know if your product will fly until it’s out in the wild in front of real live users, and the risk for failure exists no matter what. But for prudent entrepreneurs who’ve done their own due diligence and feel strongly about their product concept, the Sound & Simple route is the way to go.
Photo courtesy of Chris Daniel
