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My first mistake as an entrepreneur - building a solution for a problem that didn't exist.

Lots of people have ideas for a potential startup. Ideas by themselves are a dime a dozen, the execution is the clincher. Don't really have to harp on that - never seen an idea take me on a cab ride. Else, Travis Kalanick wouldn't be a billionaire today.

So, even I had an idea. It was to connect top freelance tech talent with quality companies who need them. Seems simple enough. And as people do, I began to complicate it. Let me explain.

1. My idea

I didn't want to build a pure marketplace - a platform where all I did was to ensure both parties (freelancers and companies) registered and found each other. I wanted to curate the experience. A screening process would handpick the best software developers who would become part of our network. These developers would then be connected with great tech startups & companies who were looking for top-notch talent.

To be fair to me, this wasn't the crazy part. This I got right, and it did make sense. There were hundreds of marketplaces out there and Upwork, the behemoth, was leading the pile. It had space for no one else. Even if it did, that would not be a business I would enjoy building. Okay, enough said about this. Now comes the complication in the execution.

2. The complication

I decided that to achieve this, what I need is a cutting-edge platform. This platform would automate the early part of the evaluation process, such that the number of people remaining for the later, more manual testing rounds would be lower. Features such as automated scoring, seamless scheduling of interviews, a communication pipeline (among, of course, loads of others) were part of this vision.

Seems logical. If too much of manual work was done in the earlier rounds, then I would just not be able to scale the startup. Wait a second, did I just say scale the startup. Did I have any scale at that point of time? Did I have anything that could be called a startup? What were my revenues or how many people had I started interviewing? Ahemm, ZERO on both counts.

So, what I had done there (very nicely, might I add) was to start solving for a problem that didn't exist. You wouldn't be wrong to assume that I had also invested in the latest home security systems to protect the millions I would make in the future :/.

3. My mistake

I have laid out the context and probably the mistake is there for all to see. But let me embarrass myself in detail, by breaking it down.

An idea is beautiful. The beauty is that it has endless opportunities. Unfortunately, that's the painful part too - you need to make choices from the vast sea of options. When you haven't even started executing, your choice is defined by logic, powered by ignorance. The tricky thing is that since it sounds logical, it might seem correct.

To me, the logic of building a smart product to ease manual effort sounded solid. But I hardly had a clear picture of what the talent market would be like. Where would I source such people? What's my exact pitch to them, to dedicate a significant amount of their time to get into my network? Well, I could go on. Sure, I had done my "market research" on each of these questions. But the truth is unless it is tested out, the research means nothing.

4. Result

We did end up building a product - one that costed a decent amount of money and a lot of time. Piece by piece we realised that the way the product was built didn't align with the reality of what was needed. And we kept omitting things, till one day our garbage bin contained the entire product.

Just onboarding 15 developers into our network and working on 3 engagements with clients, taught me so much about the market. This could have been achieved with a simple excel containing everyone's details with all processes being conducted manually. Pretty much what we did.

5. Learning

Don't build any product till you have tested your thesis out. Get as close to actually doing business as you can. Nothing is as true as that. No startup book. No mentor's advice. No investor's direction.

Even if you are a tech startup, before writing a single line of code, there might be ways for you to:

  • Verify the need of your offering
  • Identify the exact problem you should solve for your customer
  • Build an audience for your product

I plan to cover these areas in my next newsletter issue. You can read this issue of the newsletter on my website too: https://2.flexiple.com/newsletter/my-first-mistake-as-an-entrepreneur.

I write a similar note weekly in my newsletter on topics that include my mistakes as an entrepreneur, case studies on successful founders and learnings from other startups. You can find them here: https://2.flexiple.com/entrepreneur-musings

  1. 9

    Don't build any product till you have tested your thesis out. Get as close to actually doing business as you can. Nothing is as true as that. No startup book. No mentor's advice. No investor's direction.

    This.

    1. 1

      Yup. Way too often I have encountered people getting carried away by popular stories, so-called mentors (who have outnumbered entrepreneurs), etc

      So yes, need to get things back to basics.

  2. 3

    I recommend anybody with an idea read The Mom Test. Tells you how to break through the noise and your excitement to find out if you actually have an idea worth pursuing. https://www.amazon.com/Mom-Test-customers-business-everyone/dp/1492180742

  3. 2

    This could have been achieved with a simple excel containing everyone's details with all processes being conducted manually.

    Exactly! You can launch a successful startup beginning with just a spreadsheet behind a landing page.

  4. 1

    Very true @karthik_2206, I guess many first time entrepreneurs fall into these pits, you are not alone :). Making the product/platform nice & fat even before we identify 5-10 paying customers is another common mistake, count me in on that :)

    1. 1

      Yup :). Hopefully, a new entrepreneur reads this and avoids the mistake :)

  5. 1

    This idea seems to be validated by a number of players in the market. My freelancer-friends usually find their gigs on LinkedIn. Works really well for them.

    If there is one lesson I have learned as an entrepreneur, it is that the product is not the most important reason why a start-up succeeds is - distribution is.

    And with market places, you usually need to have either the demand or the supply side sorted before you can create a market place. It's double hard, but often quite defensible if you can make it happen.

    1. 1

      If there is one lesson I have learned as an entrepreneur, it is that the product is not the most important reason why a start-up succeeds is - distribution is.

      100%. Learnt the truth the hard way.

  6. 1

    Its very easy to forget the golden rule. "People don't buy what you do, but why you do it".

    If the product you build do not create value for them, then its of no use.

  7. 1

    building a solution for a problem that didn't exist.

    To be honest, I didn't get this part. It looked like your idea was pretty viable, what was wrong with it?

    1. 1

      Hey, Sorry for the late reply.

      Yes, I can understand how that might be confusing. The problem I was referring to here is that of "building for scale". Too many times I have seen people (not only entrepreneurs but anyone in general) crib OR start preparing for problems that don't exist today but could sprout up in the future. In general life, that is just annoying. But as an entrepreneur that can be dangerous.

      I learnt this early-on. My idea was fine but I just got carried away with the popular notions of making processes scalable before I had done any business at all. That's what I want to warn any entrepreneur from doing.

      P.S. We are doing fine and have built a decent startup over the past 3-4 years. Thanks for asking :)

  8. 1

    I'm in the stage of searching for a problem. It's hard to validate.

    1. 1

      I used this workshop to come up with a dozen ideas 😉
      Validation is really not that hard. It only requires talking to the people and be open to their feedback.
      I had an idea and now I'm pivoting it based on the received feedback.

      1. 1

        Oh, OK. That's great content. Thanks.

  9. 1

    Happens to all of us, but it's great learning!

  10. 1

    I think building something that you yourself would enjoy using is important. You need to be a customer of the product you are building.

  11. 1

    I had this same mistake when I tried to make a web app that wasn't profitable. However, now I am working on a podcast all about my experiences learning web development, how to grow an online business when you're young, and staying sane while doing so. You can check it out here: joshternyak.com

    1. 1

      Sure Josh. Wish you the best. If you are interested, I have begun to share all my mistakes and learnings in my newsletter. You could take a look too.

  12. 1

    I built a dating app which I thought would blow up. And now I feel like I'm in your shoes too! An amazing product in my opinion, but something useless for the consumers...

    1. 2

      Hmmm, totally feel your pain. Thankfully, it has been four years since I went through this. Have gotten a bit better at this now and have been able to build Flexiple well.

      Hence thought that it would make sense to start sharing all the mistakes I have made and whatever I have learnt.

  13. 1

    How to Get and Test Startup Ideas - Michael Seibel:

    https://www.youtube.com/watch?v=vDXkpJw16os

    A long time favourite of mine on this topic. I haven't found another resource as clear and succinct as this.

    1. 1

      Great. Thanks for this. I'll take a look :)

  14. 1

    Validating an idea is not that complicated.

    All you need to do is learn figma which is very easy to pick up, build a nice landing page (again so many landing page builders) making your case and just start marketing it.

    You can validate your idea in less than 2 weeks.

    1. 1

      Things don't have to be complicated. Simple paths can be tough to see.

      I agree though, many landing page builders make validation easy.

  15. 1

    I can relate to this, brother. My mistake was building a product without idea validation. I didn't research if there was an audience who might be interested in my product. Mistakes like these are more of like a lesson.

    1. 2

      Totally :)

      The problem which I was trying to underline here is that "market research" is pretty much unuseful. Everything sounds logical but are not necessarily right.

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