A startup can fail, but not an entrepreneur. The entrepreneur gains new experiences for their next startup.
I posted this on twitter about a week ago and received positive responses. I wanted to share the story behind this post and my own personal experiences with entrepreneurship, the lessons I’ve learned. Prepare 4 VC is the second company I started after a failed attempt at an app-related business called Night Owl. I will walk you through the story of Night Owl and how the experiences with that company have enabled me to create a success business with Prepare 4 VC.
The start of Night Owl
What started as a discussion between friends over some drinks one night turned into a realistic talks for a business over the next few weeks. The app we wanted to create, Night Owl, would list all of the bars in town, allow you to check how many people are at each bar, which of your friends are there, message your contacts and invite your friends to join you on your night out. The bars would sign up for a subscription to the app, where bar owner’s would have the option to notify local residents of upcoming deals, happy hours, special events, and performances. If bar attendance was slow on a particular night, they could simply notify local Night Owl users of an exciting new drink special and watch the crowds pour in.
To the left is the initial version of the app. I believe the concept was there, but there were several mistakes I made in the execution that prevented the potential from being realized. These mistakes led to the tips I am mentioning below that helped me with Prepare 4 VC.
1) Focus on your strengths
When starting Night Owl, I had no experience in the domain. I did not know how to write code and did not yet have the sales experience to sell my platform to bars (I was an economics and math major with experience in wealth management.) The biggest attribute I brought to the table was that I was the ideal consumer of my app and knew the pain-points of my user. There are ways to work around all problems, but it is much easier to start a company in a field that you have experience in.
When starting my next endeavor several years later, Prepare 4 VC, I used my experiences analyzing business plans for the venture capital firm and angel investment syndicate I had worked at to offer a valuable service to startups. I built on my experiences in entrepreneurship that I gained at Babson College through the Masters in Entrepreneurial Leadership Program, where my group had worked from the ideation phase to create a business plan and many presentations for a food sourcing service for personal chefs and caterers. I was also able to leverage my network of individual and institutional investors to produce an added value of fundraising connections to my clients. I focus on the areas in which I can offer the most benefits to entrepreneurs: business plan development, financial projections, pitch deck creation, and creation of the investor pitch. These services bring me to my next point I learned from Night Owl.
2) Create A Business Plan
Like many first time entrepreneurs, I felt I knew what I wanted for my company and did not think it was necessary to write a business plan until I was looking for funding. This is a mistake. EVERY BUSINESS SHOULD HAVE A BUSINESS PLAN AT EVERY STAGE OF BUSINESS. The business plan is not only a tool to show potential investors the scope of your business, it is also a way to organize and plan the details and resources needed to build, grow and sustain your company. It can be a tool to show employees the goals and inner workings of the company, and a resource for partners to use to better assist you.
Needing an outside developer, I began contacting web development companies and freelancers, eventually hiring one through Freelance.com. I had written a summary of the work required, but the process involved many revisions of the app to create it the way I was looking for. with a formal business plan, I would have been able to show the developer exactly what needed to be done and what the end results would accomplish.
For Prepare 4 VC, I created a 16 page business plan highlighting the goals for the company and all of the steps I needed to take to complete them. Like any proper business plan, it is a work in progress to be adjusted as the company grows and pivots. The business plan is not set in stone but used to guide the company along its growth path. As new opportunities arise, it can change to take advantage of the market situations.
3) Conduct Thorough Market Research
It was about a month after launching Night Owl on the iTunes App store that everything began to fall out of place for one simple reason, I had not done my research. I received an email from Apple Support that there was in fact another App on the App store with a very similar service that had the trademark Night Owl already. The service was not yet offered in the same location, but they claimed that my app made users confused of which one to download and infringed on their trademark. I could not simply change the name since I would have to re-hire the developer that coded it to change all of the information. My app also had a bug that kept deleting users, and I had chosen to hire a developer in India to cut costs (it was 10x cheaper than hiring a US firm). The 10.5 hour time-difference made communication difficult and extended the length of development.
In creating the business plan for Prepare 4 VC, I knew who the major competitors were, what their offerings were and how they differentiate themselves. There was no other firm named Prepare 4 VC and I was able to secure the website domain. Additionally, I was able to use information from my competitors to determine my place in the marketing, including service offerings, add-on values and pricing.
4) Create a Long-term Goal
One of the drivers behind some of my decisions with Night Owl was that I was a Senior at Colgate and wanted to be able to use my App before the year ended. If I had spent the time doing the business planning stages or market research presented above (or hired a firm like Prepare 4 VC to help), than Night Owl might have become a successful.
In creating Prepare 4 VC, I developed milestones for each year to determine the initial expansion of the business. I spent the time to become an expert in the services I offer, going to seminars, and reading books and articles on startups, investing and entrepreneurship to add to my professional experiences in the field. I know exactly where I want to see the company in 5 years, but have the flexibility to pivot and change the business along the way.
5) Don’t give up, Move on
Your time is valuable. It may be worthwhile to work towards making your failing startup a success, or it might be time to move on to something different. If your company did not catch on, simply take the experiences you had as an entrepreneur and take them to your next job or startup. Someday the right idea will click, and when it does you will have what it takes to become a successful entrepreneur. And remember, a business may succeed or fail, but an entrepreneur simply continues on the road toward success.