Warning signs for startup failure
Meetric recently celebrated its 1st birthday — a year since we incorporated, and a milestone that many startups never make.
It’s been a year of ups and downs for sure — mentally, physically and emotionally. Sometimes within the space of days, I could go from beaming with confidence about customer praise, to anxiously bemoaning whether we are really solving a pain for people. But I think most founders probably feel that way at various stages, particularly in their early years, and prior to finding product-market fit.
But I am older and wiser than I once was, and maintain the confidence that our vision of helping people to have engaging and productive meetings is a worthwhile pursuit, and is still very much achievable.
Whilst the last year was packed with new experiences for me, it’s interesting to look back at a role I had at a very early-stage tech startup in the past, and to compare the two. That endeavour — lets call the company Xample — unfortunately didn’t have a happy ending, so it’s worthwhile reflecting on some of the warning signs I missed then, to see if I have learned from past mistakes.
“Those that fail to learn from history are doomed to repeat it.” - Winston Churchill
Founder distraction
At Xample, the founders were very hands off. Not in that trendy, laid-back way where a manager insists that if you get your work done, they don’t care how or when you do it. In this case, it means they largely weren’t even around — splitting their time amongst other, more pressing priorities. Sounds crazy now, but it probably only hit home for me, when I was having investor conversations on their behalf, and was informed that an absent founder was a non-starter for them!
On the flip-side, Meetric is essentially the sole business focus for all three founders. We split time between in-office and remote work, but we talk daily and make sure to prioritise important strategic discussions regularly.
Lack of funder diversification
Xample was self-funded, by one of the founders, with minimal planning at best on how the money would be spent, and what specific results it was hoped that would drive.
Meetric has a trusted group of savvy angel investors and venture capital firms behind it, and/or waiting in the wings for a future investment opportunity. Pre-seed funding was based on a very clear vision, belief in the team and an understanding of exactly what that money would go towards. Future funding will be largely based on specific traction and growth metrics.
Lack of expertise/empathy
The team at Xample lacked fundamental, readily available subject-matter expertise, not to mention empathy with its users. This is particularly worrying when you yourselves are not users of your product. We were almost completely reliant on our small number of users to paint the picture for us. Undoubtedly, this had a cost in both credibility, but also time and effort, as things just took far too long to learn.
The Meetric team relates directly to the problem we are solving, because we have been having meetings (good and bad, large and small, etc) for many years. My cofounders have even led organisational efficiency projects in previous roles, and we are well-read in the space, and abreast of the latest trends (remote work anyone?). Perhaps most importantly, we are power users of our own product, which means we are constantly looking for ways to make it better. We also talk to a ton of users, because we know that practices vary greatly between people.
Lack of direct competitors
No-one else was trying to solve the problem that Xample was, for the niche market it was targeting. Now this doesn’t alone mean something is a bad idea, but it could mean that others have tried and thought better of it.
Meetric meanwhile, has a number of competitors. Our initial product is not creating a new category — we are a note-taking tool, just like Google Docs, Evernote or Notion, but we’re specifically for meetings and sync with your calendar. We are solving a problem that very much exists, one that people may well be overcoming in their own cobbled together manner — but we are doing it better! We take heart from the fact that some of these indirect competitors are multi-billion dollar success stories, and that most of our more direct competitors have managed to raise impressive seed rounds, and continue to grow.
Pivot without pain
The original idea for Xample, comprised of two solutions, each solving specific pains that the founder had personally experienced. Relatively early on, it became apparent that our solution for pain-point 1, whilst great in theory, would not work practically in the current state of the market. We pivoted to focus on the second pain point. But we never really asked the question if it was really painful enough on its own.
At Meetric, we have probably pivoted a couple of times, but each time it was based on our evolving understanding of the problem, and considerable evidence to support our new focus. We constantly ask ourselves (and our users) the question; ‘Is this solving a problem for you?’
Feedback misalignment with analytics
Numbers don’t lie. Xample users constantly told us how much they liked and used the product. But a quick look at our usage data suggested that most of them were lying to our faces. It was easy to finish a customer meeting and feel buoyed based on the positive feedback. It was harder to face the facts that people were just telling us what we wanted to hear.
We have invested heavily in our instrumentation at Meetric (we use Mixpanel, Intercom and Google Analytics amongst other tools) to ensure we have a vivid understanding of what our users are doing (and not doing) on the platform. And in equal parts, we complement this understanding by actually speaking to them, and asking poignant questions. Questions about concrete experience s— in our product where relevant — but importantly, how they did things until now. (Side note — I strongly recommend reading/listening to The Mom Test by Rob Fitzpatrick, for anyone wanting to know ‘How to talk to customers & learn if your business is a good idea when everyone is lying to you’).
Misunderstanding business/product lifecycle stage
When I joined Xample, my first task was to test the product for bugs (of which there were plenty), in the lead up to what were effectively pre-sales meetings. It was very quickly apparent that not only were we not ready to sell, but we needed to go back to the drawing board in terms of understanding the customer journey and pain points. Yet we persisted with expending time (and considerable cost on things like international travel!!) on trying to sell a half-baked product. There were still learnings in those meetings, but not nearly the quantum or depth that could have been achieved if we had approached it as research and focused on the customer.
Meetric meanwhile, is acutely aware that we haven’t achieved product-market fit just yet. Some users love us, but others fail to have the ‘Aha!’ moment we want them to have. We‘re always honest with users that we are early in our journey and emphasise the importance of their feedback — especially if that feedback is critical or things we can improve! We’re not focused on selling yet, because we know the product needs more work for the average user to justify taking out their credit card. So we also don’t spend our time or energy (or limited budget) on things that won’t help us right now.
Lack of natural demand
Whilst Xample was admittedly a very different product (not a freemium B2B SaaS model like we have at Meetric), there was next to no organic awareness. Almost every potential customer we spoke to was an existing connection of the founder, from cold calling or paid marketing endeavours. No-one was really searching for the solution we offered.
With Meetric, we get a steady flow of new signups with zero CAC (Customer Acquisition Cost), who have found us through search, reading a blog article or word of mouth. Whilst their specific expectations of Meetric may vary considerably, there is a general and persistent interest in the problem space. People want to make their meetings more productive with actionable meeting notes.
Not learning from others
I was as guilty of this at Xample as anyone, but there was a profound lack of learning from others. Some of it was circumstantial, but really there was no excuse for not looking at other startups in comparable markets, geographies or even business models to learn from their mistakes and the paths that they had already or were in the process of treading. There was practically no networking with other startups, canvassing advisors or even much reading up on relevant trends and best-practices.
I’ve come a long way since those days, and now recognise how important it is to continually strive to learn and improve. I’m also pleased to say my cofounders share that value, and we push each other in this regard. We attend founder forums, join online product conferences, reach out to experts for advice, make time for daily reading and share interesting podcasts, and reflect on our own learnings weekly.
Conclusion
Our founding team has done well to avoid many of the mistakes I have personally experienced in the past. So does this mean Meetric is doing everything right and success is guaranteed? Of course not! But, we’re constantly learning and improving what we’re doing, so we’re giving ourselves the best possible shot!
