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What I learned from my first failed startup

Back before there was an Airbnb, I started a website to compete with VRBO.com.

Having had some success in affiliate marketing, I took the savings and hired a developer to build the MVP.

Mistake #1: Building something without clear value proposition. Sites like vacationrentals.com existed and I had no clear purpose for building my site (vacationbird.com) other than that I was passionate about the space.

Mistake #2: I spent money developing something which could have been put up through platforms like WordPress (at least for the MVP).

I used CraigsList and found property owners in vacation destinations who were posting there but not on VRBO and the likes. I contacted them manually one by one (back when it was easy to do so without triggering spam). The value prop was simple: added exposure to your properties (although I did not have any traffic at the time).

Most just agreed. Some had as many as 20 properties and it was very easy to start populating the site.

Mistake #3: I did not charge anything because I thought having no traffic would not justify the listing. In hindsight, I should have probably started charging something, even a little, while taking that money and using it on Adwords (back when it was actually easy to do). I was carrying the cost of development, hosting and my own time with nothing to show for it.

The developer I hired was very good. He had done everything I asked for and made the entire platform easy to manage. Despite this, it was costing me time and money and this added up quickly.

At one point I managed to have somewhere around 400 properties listed on the website. At this time another competitor popped up and was charging $5/listing. I could not understand how that made any financial sense as I was planning on charging later, but in hindsight they made a better decision.

I had a major chicken/egg problem on my hands. Either I put in my own time to keep hunting for property owners, or figure out a way to get organic traffic. Despite having properties listed, organic traffic was just not coming in. On top of searching for properties, lost $$ invested in the time and the development fine running, I was trying to figure out how to get people on my site.

Mistake #4: Focusing too much on getting more listings instead of finding channels outside the traditional means to advertise them.

A lot of time has passed at that point and with zero revenue and constant work of finding more listings it became emotionally draining. I went through many ups and downs, a hell of a rollercoaster with nothing to show for it other than an emptied savings account. I realized that the task was much more difficult and I knew far too little to tackle it so I gave up. It was tough and I felt scarred for a long time. I took up a regular job just to put it all behind me but the pain persisted for a few years. I was too drained to start anything new.

Mistake #5: Not seeking outside help / perspective / mentorship. What I should have done at that point is talk to people who have been in my shoes, or at least felt the struggles and see if anyone had any advice. I should have done this at the beginning of the process but I was too young and too stupid to ask.

Mistake #6: Giving up too early. Looking back, I firmly believe that if I just stayed in it, sought out advice and help from people who have been in my shoes, there was a much higher chance of success. Despite having a weak value prop of just being another rental site, I feel that there was room for competition and I was not limited by the corporate slowness that plagued the other sites. The SEO angle was also in my favor and just needed time to brew with additional marketing work.

Other thoughts: The people I talked to early on were incredibly nice and friendly. I did not make any false misrepresentations that they would get new business right away and they frankly didn't care. I loved talking to them and they were very encouraging of the new venture. Many years later it is clear to me that I did a lot of things wrong. Many resources exist now, like IndieHackers, the Open movement and networking opportunities all over.

I guess if you had to summarize some sort of takeaways, they could be this:

  1. Be super frugal on your MLP (minimum lovable product). Get it out asap, don't overbuild.
  2. Charge up front or build a freemium model where the the free portion markets for you (links, badges, hosted branded pages etc).
  3. Marketplaces are hard. The chicken/egg problem is a pain in the ass if you don't know what you're doing (like me).
  4. Get help. Reach out to people. Luckily we have IH now (back then it wasn't around). So many entrepreneurs now are willing to help if you just ask. This is the nature of our social fabric - we want to help people.
  5. Don't give up early.
  6. Look back at your progress, not your shortcomings.

Happy building!

  1. 2

    Nice summary at the end of all your learnings.
    Point number 5 - dont give up easily, made me think of Airbnb - 2/3 years to get any significant traction.

    1. 1

      Indeed. I think developers in particular are susceptible to this. I've met so many developers over the years who have "side projects". I've known many who shift from side project to side project (hell, this is me, but a non-dev. haha) There must be sufficient time dedicated for something to mature and take off.

  2. 2

    I agree on every words you said Gene! I used to build a carpool app for short-to-mid distance travel. Building a marketplace is so hard! It didn't end up well. After that, whenever I have another marketplace ideas, I tell myself, "Big NO!", haha 😭

    1. 2

      Yeah, marketplaces are tough. I have a lot of respect for people who can pull them off. It takes a significant investment or some crazy marketing chops!

  3. 2

    Thank you for this knowledge. It is really appriciate.

  4. 2

    I like that you are super honest about it and the given takeaways are great for someone like me, who is on the stage of building an MVP. One question though, What do you recommend to do to reach out to people? Can you give some tips around it? Thank you.

    1. 2

      If I had to do it all again, I would document my journey and talk about my day to day reality, the ups and downs. If for some reason you feel you're heading in the wrong direction, ask for advice from people who follow your journey. IndieHackers is a great place to do that. Just generally being more open and receptive should go a long way.

      1. 2

        Thank you, @genemachine. I will keep that in mind. All the best for your future endeavours.

        1. 2

          Thank you! Likewise!

  5. 1

    Great insights! Thanks for sharing. Really helpful for someone like me who is on a similar journey. When's the next business coming?

    1. 1

      Thanks Matt! I am currently occupied with https://www.growthdesigninsider.com/ and making a few premium resources (swipe files). Not really a business, but projects nonetheless. I have a few other ideas brewing, but I am giving them time until I am free or figure out how to execute on them. What are you working on?

      1. 2

        Nice. I just signed up on a free subscription. I'm currently working on Tendii, a tool for managing time and documenting outcomes during remote meetings. We've recently beta launched and are working on getting users. I can certainly relate to the challenges described in your post. Cheers!

        1. 1

          Awesome, good luck to you! I have a mix of startups and established companies on the mailing list so I need to figure out how to provide some value for both. I will check out Tendii!

  6. 1

    Thanks for your sharing. This is really helpful. Hope you are doing better 😊

    1. 1

      Thanks Fatou! Yes, I am 100% better now ;) This was a while ago but I never shared. I've put it behind and trying new things.

      1. 2

        That is really cool 😊. Pretty sure your experience will help you a lot in your future endeavors!

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          Let's hope so ;) haha

  7. 2

    This comment was deleted 4 years ago.

    1. 1

      I'm doing great now! I think markets where there are only a handful of large players have plenty of competitive space.

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