In September of 2018, I gave up a remote, 3 days per week with 1M of package job, stepped into startup on IIoT SaaS with hardware. We spent a year to do the R&D till January of 2020, failed in the COVID, lost millions of my own money.
Here are the lessons worth millions .
Here are the lessons worth millions .
1, Don't to be fully committed without deep consideration. I got a promise to get the seed money and quit job as VC required, politely refused the former company's special offer. 50% work for them, while 50% for my own startup.I lost the stable incomes and potential customers.
2. Don't easily believe in verbal commitment. After getting positive feedback from potential customers with the demo, I talked to several VCs and got one verbally promised to invest. However, the investor gave a debt-to-equity terms after weeks of DD, I refused.
3, Start from Zero, and be humble. I was very respected by customers in the previous company. However, as a small founder of a small startup, situations are totally different. You have to accept your current situation, and adjust your emotion by making more deep breath.
4. Be open and be patient, build an efficient communication. Startup is built by people who has diverse background with different work culture. It is normal to have conflicts among employees. Find the root reason, handle it carefully with a method people likes.
5. Find a good business mentor. It is very important for a first time startup founder. You will need really executable business strategy and mode after the period of demo, proof of concept, and a first paid customer. An experienced mentor will help you a lot on it.
6.Find a good Financial Asssitant(broker). Like a good mentor, good Fund broker is also very important for first time founder, specially for technical founder. Funding is always related to human being and network. A good FA can help you find VCs which fits your startup well.
7. Be friendly to yourself. As a founder, you will be rejected, or even ridiculed, and be hit again and again.
Be rational with your strong mind, talk to investors who can understand, find people who believe in your vision and be willing to work together.
Be rational with your strong mind, talk to investors who can understand, find people who believe in your vision and be willing to work together.
8. Be persistent and don't give up easily. No matter how many rejections you get, you told to youself that that there are still many customers who have not yet met you and even more have not seen your products. These are valulable opportunities.
9. Find the users who really fit your product. Sometimes it is not because the product is not good, but not fit. For example, I don't like to watch movies from computers, Mobiles, so a 4K big screen TV will fit me well but the apps play on the phone it a bad fit.
10. Build a vision with enthusiasm. The founders basically relied on enthusiasm and optimism to move forward In the early days. It is the crucial factor for entrepreneurship. And rational and self-disciplined focus can make the probability of success even higher.
11. Make decisions with support by data. Human being are emotional most of times. Data will help you to be rational, focus on the real problem of your product, sales and team. Collect as much data as you can, analyze it with your executive team.
12. Encourage customers clearly express their comments towards the product. It will help you judge whether the opportunity is available now or would be in the future, whether it is a long-term valuable customer or an inappropriate customer.
13. Large enterprises always need customization. Both the cycle and the payback period are long. Standardized product is the best for startup. In the long run, the lifetime value of large enterprises is high, but the value of SMEs enterprises is most reasonable at the beginning.
14. VCs like to make money , not help you make money. Express your purpose straight, require the same response. Don't continue to update information to whom don't follow. Keep your own independent judgment, critically absorb their comments, and then iterate your own judgment.
15. The core founders(CEO,CTO & CPO) must do customer development for a period of time. It will help them to understand the fit between customers and the product, the problems the product can really solve, and the reason customers buy or not buy your product.
16. Customer development staffs are a mixture of product managers and sales. They need deep understanding of the product, strong insight and the ability to get the pain of the visits. His/her work lead the direction of the company's products and markets, and the future.
17. VCs have a lot of tricks to get what they want. Specially in a not-open VC market, Chinese VCs for example. VCs care about the returns you/your project can give them, how quick they can get the return. Talk to them carefully and more about the business model but the product.
18. Ask one more why. A 6M trial customer wont's purchase. Why? Because the test kit was lost at the begining! They didn't tell and test another from competitor. We had a deep talk, offered a great solution to fix them after, finally reached a strategic cooperation.
19. One single point that stimulate users, there is usually a BUY. The entire cycle of toC is short. ToB is totally different. The cycle requires a series of points that can stimulate different decision makers, influence people and users, and the cycle is relative longer.
20. Customers buy mainly because your products or services can solve their problem, release their pain. A lot of features need more resources and time which startups don't have, focus on one key feature and make it work well.
21. Confirm the real pain ASAP. You can easily get it from a month of trial. If the customer want to extend the trial, identify the reason. They want to use it for free or the purchase is stopped by someone. You can spend more money and time if there is a big order, or quit ASAP.
22. The current strategies of startups are based on existing resources and problems. These decisions may seem small, but they are useful. Large operations require a lot of money, man power and time. It is not necessay to do such big things beyond the current capabilities.
23. Dig deeper to understand the dissatisfaction. Talk to the users, and get their feedback. If your service has an end-user, you can play as an engineer of your customer to talk to the end-user if possible. The deeper pain you understand, the better service you can offer.
24. Startup is contradictory. The team insists on the execution of the business plan while doing continuous iteration. Execution to reach the vision, iteration the product or the team to have better execution.
25. Focus on the product/service that the technology can bring value, and always think about how technology can bring good experience. Keep asking three questions: 1. Will the customer be satisfied?
2. Is there any difference from other companies?
3. Is it profitable?
2. Is there any difference from other companies?
3. Is it profitable?
26. Founders and VCs have natural different understanding of startup. Founder wants to verify the product, increase sales to survive. Some VCs suggest to reduce the price and quickly capture customers. Decide by yourself, I take the advice from them who wrote a check.
27. Verify quickly and fail quickly. It saves a lot of time and money. However, it is more difficult for ToB Startups. The acquisition are longer, the conversion is slower, and the repurchase cycle is also longer.
28. Be very patient to wait, specially for a toB business. Wait during the trial period, wait during the internal discussion to have a decision, wait for a price negotiation, purchase process, user scenarios and payment.
29. It is not easy for a startup to get an order, especially from a large company. Large companies have high barriers to entry, they will worry about the loss if startups fail. The cost of changing suppliers is very high. It is very rational.
30. Expect more from yourself, less from others. Be serious to your life, be serious to entrepreneurship. Trust your mates, trust your employees, trust your suppliers, replace when you find unqualified. Let failure fail. Your job is moving one, face it solve it and move on.
31. Play your own tempo. Plan and execute each step at your own pace. Think twice about any suggestions from VCs or mentors, especially from VCs, their purposes are different sometimes. If you must choose one suggestion, select the one who gave you the money.
32. Think deeper than the others. Reaction from someone to:
1. A robot system with Kawasaki robot: Oh, they use Kawasaki robot;
2. A software product with WireGuard: Oh, it's just use WG.
Those never get the core , the former is the process and the other is the solution.
1. A robot system with Kawasaki robot: Oh, they use Kawasaki robot;
2. A software product with WireGuard: Oh, it's just use WG.
Those never get the core , the former is the process and the other is the solution.
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