How not to start a startup or learn from my mistakes

You get an idea and want to implement it and create your own startup. You are not alone, there are thousands of similar people. The majority of them make the same mistakes that can cost them success. In this article I want to focus on the mistakes I made and on things I would do differently the second time.

In the beginning there was as an idea. The idea was not mine, it was my friend’s. He knew many online invoicing services abroad and wanted to start something similar in our country. We began analyzing competition, it is always a good beginning. In our country there was only one service we considered competition. It used an ugly web design, not very intuitive user interface and some useless functions (above invoice creation). We decided to start our own service.

First we decided to write a short specification about what the service should provide. My business partner did not fulfill his duties so I decided to change him for someone else who knew the invoicing area. Was it not fair? I do not think so. The idea was his but each idea is only as good as its implementation. You can have hundreds of brilliant ideas in your head but they are all useless if you do not implement them. Many people still do not realize this. It is important to progress quickly while you are still full of enthusiasm.

After the specification we created a short description of what the service should look like and how it should function. No long specification was needed, the best analysis usually is the actual implementation. It is often better to create something and change it according to impressions (yours or someone elses) that spend too much time thinking about what the project should be like when it is done. It is a waste of time.

I programmed the application. It was simple, easy to use, users were offered the ability to create invoices with no complications. It is a well-known fact that you should enter the market as soon as possible and offer less but good functions instead of many buggy functions. It is better than spending long months by implementing hundreds of functions that no one will ever use. We decided to buy a domain and start the services as soon as the application is tested and ready. That was a mistake.

Now I know that it is necessary to make people aware of your project before it is actually launched. It is beneficial to start a promo page on your domain while still in the implementation phase. The promo page should contain basic information about your project. It should not contain just a list of features supplemented with words like best, revolutionary, game changing. It should be a list of reasons for people to use your application, reasons why it is useful and scenarios when your application makes their lives easier. The promo page must be promoted in order to be successful. Nowadays social networks and blogs are a very popular option.

A good idea is to let a few people try your application before it is actually launched. We used a small group of friends and it helped a lot. It is better to use a wider group of people, ideally when they are interested in your application. It is absolutely necessary for the promo page to have a newsletter subscription form. People that subscribe are very valuable, you can use them for beta testing. It is good to give them something in return, a few months of free services for example.

You can start your application only for invited users. You send the invitations to people in your newsletter, put some on social networks and offer some to your favorite blogs. People who use the invites and register will be able to send invites to their friends and the awareness of your applications will be spread through recommendation. For your project to be successful you need to define a target group. In our case the target group consisted of small tradesmen who do not use any accounting software and need to create invoices. Our target group was very specific but that is not a problem. If you think your target group is anyone, think again.

When you launch your project promoting is very important. You cannot expect that people will find you. You can have a genius service but people will not find you by themselves. We try promotion using some blogs but it was not very successful and did not correspond with our target group very much. Traffic is not important, conversions are. You can be happy about high traffic but then you will get sad looking at the registration numbers. It was more successful to enter some discussions about accounting and invoicing and promote our services there indirectly. PR article on a web about entrepreneurship was a hit along with an AdWords campaign. These specific forms of promotions did not generate high traffic but generated conversions.

Another tool worth mentioning is email marketing. By email marketing I do not mean spamming your clients regularly but sending emails about some new features from time to time is okay. You can use specialized services like MailChimp that offer various option including a very important Unsubscribe link in each email.

The numbers of registered users grew but they were mainly free users. Before you start a service you must have a business model. Our business model was a quantitative one, it may not have been the best idea. Free users were limited to 10 invoices per year. It became clear that for it is enough for many of our customers or they can get creative to bypass it.

Although the price per year was set very low (15€ per year) users were permanently trying to copy invoices, “recycle” them, delete them after PDF download and so on. It may be the nature of people in my country who are not used to paying for internet services yet and maybe such people exist in every nation, I do not know.

If you live in a small country like we do, do not aim your services only to your local market if possible. We could not do that because of different invoicing policies in different countries and next time I would not start an internet service that is not aimed to global market.