The 7 signs of failure for internet startups.docx

The 7 signs of failure for internet startups.docx

《The 7 signs of failure for internet startups.docx》由会员分享，可在线阅读，更多相关《The 7 signs of failure for internet startups.docx（10页珍藏版）》请在冰豆网上搜索。

The7signsoffailureforinternetstartups

The7signsoffailureforinternetstartups

May30,2011|BjoernLasseHerrmann

1Comment

inShare

 Tweet

BjoernLasseHerrmannisaco-founderofBlackbox,whichrunsastartupacceleratorprogramandStartupGenome,aresearchanddevelopmentprojectforuncoveringthemechanicsofstartups.

Twomonthsago,myteamatBlackboxsetoutonamissiontocracktheinnovationcodeofSiliconValleyandshareitwiththerestoftheworld.Nowwearereleasingareportbasedontheresultsofourfirstsurvey.WewanttothankSandbox,FastCompany,Inc.,ReadWriteWeb,Hackernews,youngupstarts,Yourstory.inandmanymorewhohelpedusspreadthewordandgatheratotalof650+surveyresults.Andaspecialthankyoutoallourfellowentrepreneurswhosharedinformationabouttheircompanyforthiscause.

Hereisasneakpeekofourresults,showcasing7signsoffailure:

1.NotWorkingFullTime

Ifyoudecidetostartacompany,don’tdoithalf-hearted.Creatingsomethingfromnothingishard.Succeedingalmostalwaysrequiresgoingallin.Temporarymoonlightingispermissiblebutsignificantlycurbsperformanceandpotential.

Manytimeswehearpeoplesaytheywillworkhalftimeuntiltheyhaveraisedmoney.Hereyoucanseethatpeoplewhoworkhalftimeareabletoraisemoney,butabout24xlessthanfounderswhogofulltime.Theyalsohavetroublebuildinguptheintensityrequiredtodrivetheusergrowthneededtovalidateinterestintheirproduct.Workingfulltimeisespeciallycriticalforstartupswithaproductthatrequirescriticalmasstobevaluable.

2.SoloFounderor4+Founders

Ifyoumakethecommitmenttogofulltime,yourfirstbigchallengeistoconvincesomeoneelsetojoinyourcompanywhowillfullycommittomakingthecompanysuccessful.Ifyoucan’tconvinceatleastonepersontojoinyou,oryoubelieveyoucandoitallyourself,itisastrongsignalthecompanyisn’tlikelytosucceed.However,tryingtofindsafetyinnumbersbyhavingtoomanypeopletojointhefoundingteamdoesn’tturnoutverywelleither.Therightnumberseemstobeafoundingteamoftwotothreepeople.

●   Solofoundersraiselessthan50%ofwhat2-3foundersraise.Onereasonforthisisthatduringfundraising,solofoundersarenowforcedtosplittheirtimeandattentionbetweentheproduct,thebusinessandraisingmoney.

●   Solofoundershave290%lessusergrowthandare16%morelikelytoscaleprematurelythanfoundingteamsof2-3.

●   Morethan42%ofthestartupsthataremovingmorethan20%slowerthantheaveragetimeneededtoreachthescalestagearesolofounders.

3.Don’tHaveaTechnicalCofounder

Ifyoustartatechnologycompanyandnobodyonyourteamistechnical,youareunlikelytosucceed.Unlessthecompanyisinaverysales-intensivemarket,thefoundingteamshouldbeatleast1⁄3technical,50%ideally.However,toomanycooksinthekitchenarenotgoodeither.

Thefirstproblemyouhavebynothavingsomeonetechnicalaspartofthefoundingteamisthatyoudonothaveanyonewhohasfullownershipoftheproduct.Thebusinessfounderdoesn’towntheproductbecausetheydon’tunderstandthecode,andtheemployeesorconsultantsdon’towntheproductbecausethecompanyisnottheirs.Asaresult,companieswithnotechnicalcofounderarealmosttwiceaslikelytoscaletooearly.Theyalsohave3-5timeslessusergrowthonaverageandneed7-8monthslongertoreachthescalingstage.

4.WrongFoundingTeamCompositionfortheWrongTypeofStartup

Onceyou’vefoundyourteam,youshouldmakesuretotackleamarketandbuildaproductthatsuitsthestrengthofyourfoundingteam.

WeidentifiedthreemajortypesofInternetstartupswithvarioussub-types.Theyaresegmentedbasedonhowtheyperformcustomerdevelopmentandcustomeracquisition.Eachtypehasdifferenttime,skillandmoneyrequirements.

TheAutomizer（Type1）

Commoncharacteristics:

self-servicecustomeracquisition,consumerfocused,productcentric,fastexecution,oftenautomizeamanualprocess.

TheSocialTransformer（Type1N）

Commoncharacteristics:

selfservicecustomeracquisition,criticalmass,runawayusergrowth,winnertakeallmarkets,complexux,networkeffects,typicallycreatenewwaysforpeopletointeract.

TheIntegrator（Type2）

Commoncharacteristics:

Leadgenerationwithinsidesalesreps,highcertainty,productcentric,earlymonetization,SMEfocused,smallermarkets,oftentakeinnovationsfromconsumerInternetandrebuilditforsmallerenterprises.

TheChallenger（Type3）:

Largebutrigidmarkets,strongsales,enterprisemarket

Commoncharacteristics:

enterprisesales,highcustomerdependency,complex&rigidmarkets,repeatablesalesprocess.

Thesegraphsshowbusinessheavyfoundingteamsaremorelikelytosucceedwithastartupthatrequiresenterprisesales,whereastechnicalheavyfoundingteamsaremorelikelytosucceedwithaself-serviceconsumerInternetstartup.Balancedteamsperformwellwithalltypesofstartupsexceptthosethatrequirealotofenterprisesales.

Forexample,inourdataset,35%ofbusinessheavyfoundingteamsweredoingType1“Automizer”startupsbeforeproductmarketfit.Butafterproductmarketfitonly12%ofthebusinessheavyfoundingteamsweredoingAutomizerstartups.ThisdecreaseindicatesthatbusinessheavyfoundingteamsdonotdoaswellwithAutomizerstartups.

5.Don’tPivotatAllorPivotTooOften

Ifyouhavefinallyfoundtheperfectfoundingteamandaproductandmarketsuitedtoyourteam’sstrengths,yournextbigchallengeishavingthedeterminationtomakeyourvisionarealitywhilebeingflexibleinhowthisisachieved.Thechancesthatyouwillneedtomodifysomesignificantaspectofyourbusinessisveryhigh.Whenreal-worldfeedbackshowsyouthatsomethingisn’tworking,youneedtoadapt.However,changingyourbusinesstoofrequentlywillleaveyourunningincircles.Wehavefoundthatfounderswhopivot1-2timeshave100%moreusergrowthandare48%lesslikelytoscaleprematurely.（Wetoldfounderstoconsiderapivotamajorchangeintheirbusiness.）

6.Don’tListentoCustomers

Pivotingisalmostalwaysadecisionthatismadewithincompleteinformationandunderconditionsofextremeuncertainty.Buttakingthetimetogatherfeedbackbyinteractingwithcustomerssignificantlyincreasestheoddsofmakingagooddecision.Wehavefoundthatstartupsthattracktheirmetricsandlistentocustomershave400%moreusergrowth.

7.ScalewithoutValidatingMarket

Lastly,oneofthemostcriticalmistakeswefoundisthatfoundersgettooanxiousaboutmakingprogressandscaletheircompanyprematurely,beforevalidatingtheirmarketandstreamliningtheircustomeracquisitionprocess.Iftheyhaveraisedalotofmoneyorhavealotofdetermination,theresultistypicallyaslowdeath.Iftheyhaveneither,thenaspeedydeathislikely.

Thefollowinggraphsshowthatstartupsthatscaleafterproductmarketfitraise3.2xmoremoney,andhave1.5xmoreusergrowth.Interestingly,startupsthatscaledprematurelyhadbeenworkingjustaslongasstartupsthatscaledappropriately.

PreviousStory:

IsAdGrokTwitter’snextbigacquisition?