There are a lot of articles on the Internet about successful business launches, startups and, in general, about various types of success. But there are not so many stories about how projects fail, and there are many more than those that are fired. It is very important to get motivation and energy for action by reading about someone’s success, but it seems to me that it is equally important not to break away from reality and to know about failures and failures in order not to make similar mistakes.
Therefore, I suggest you read the story about the failure of one of my projects, which we worked on 8 years ago. Although the story is not new, I think it is still quite relevant. Most likely, by the end of the article, there will be a good list of what and how not to do it 🙂 I do not claim to be correct in all the statements, this is purely my subjective analysis of my own mistakes “when I was young”. So to speak, the Business School is on its own. Feel free to leave a comment in the comments, as I have already paid so much for this experience 🙂
What started it all
Ideas for startups and projects are not born out of thin air. I think that few people can boast that he sat down to think, thought and thought and came up with what he would like to do. Usually you see either an unsolved problem that you want to help solve, or you see some demand and no supply.
Considering that I have been involved in business since childhood, as well as many of my acquaintances, we had a common problem: we needed new clients. There is always a shortage of customers. Even when they are, there is always room for growth. Any advertising gave extremely blurred results, you buy a banner on the website, print postcards, pay Google for clicks and you have no idea whether you will receive even one order.
It would be great to pay not for advertising, but for the client!
This thought haunted me for many months: if only I could come across such a service, where you simply set a price, how much you are willing to pay for one client, and pay only for the phone numbers of people who want to order your service, and not for the notorious clicks or impressions… I I would immediately throw all the money there and be happy!
Now there are already similar, quite successful services, and even Google itself offers such a service in some form, but in those days there was no such thing, or I did not find such 🙂
I got so fired up with this thought that, in fact, it blinded me. It’s so obvious, it’s so simple! Any entrepreneur who provides any services will be just happy to start using our service! You won’t even need to run ads at all! A popular rumor will spread, people will share and tell each other about such a miracle service, where you pay not for useless and ineffective advertising, but immediately for real customers!
Mistake 1. Didn’t test my theory.
NOW THIS IS WRITTEN IN ALL BASIC TEXTBOOKS ON CREATING STARTUPS.& NBSP; NEED TO TEST YOUR THEORY BEFORE RUNNING. AND THEN I DIDN’T EVEN THINK ABOUT IT, IT SEEMS TO BE SO OBVIOUS. BUT, IT TURNED OUT THAT NOT EVERYTHING WAS OBVIOUSLY LIKE THAT.
I was completely absorbed in the idea of how cool it would be for my business owner clients. But I practically did not pay attention to the second most important question: how will I find these customers? Well, to be more precise, I thought about it, and it resulted in something like this wording: customers don’t care where to order services, the main thing is that it’s convenient. People will find us through search engines, advertising and through the partner network I planned to create with ad units similar to Google adsense. Naive? I also think so now 🙂
Mistake 2. Did not consider the concept from all sides.
Naturally, I had to take this issue more seriously, because it always basically starts from the other side. They do something really good to attract traffic: a site, service, application, and then they start monetizing this traffic. And I ended up figuring out how to monetize traffic that I didn’t have, and no clear plan to get it.
The beginning of development and the first employees
Although I myself am a programmer with many years of experience, I hired an experienced programmer I know to develop this startup. And naturally, instead of the promised two months, the Basic MVP version appeared six months later. Although no one knew it was called an MVP at the time 🙂 just deployed something that worked at least a little bit.
All subsequent revisions, improvements in functionality, optimization of the work of various nodes had to be completed on the go, and often by me personally, as it took less time than trying to explain to the programmer what I wanted from him.
I’ve always been a stickler for as simple an interface as possible, and I know firsthand that people don’t like complexity. Therefore, as it seemed to me, we immediately did everything as simply and conveniently as possible. At the same time, we rented an office, where we stayed with my wife, who was engaged in the development of all designs, hired a copywriter and a manager for work with clients. And they started the promotion process.
Running an advertisement
We drew a beautiful landing page with my catchphrase: “advertising with payment per client” and launched targeted advertising from Facebook on it. The first registrations began to appear. But, of course, not on the scale that was seen in dreams. And those who registered, for some reason did not post their ads.
After calling the registered people, we found out a lot of interesting information:
- people did not understand the meaning of my phrase;
- they did not understand who the customers are and what they need to pay for;
- they did not understand at all what the essence of the service was, but registered out of curiosity;
- and those who guessed the essence of the idea often couldn’t figure out how to work with our interface!
Mistake 3. He relied only on his own opinion and understanding.
PEOPLE OFTEN DON’T THINK THE WAY YOU THINK, AND WHAT SEEMS TO BE OBVIOUS AND COMPLETELY UNDERSTANDABLE TO ME WAS MOSTLY OBVIOUS.
Development
The process of adaptation began already in real conditions, phrases, designs, accents began to change. The copywriter began to write content for the sections in which people began to add ads. They began to improve the interface, add hints at every step.
Given that I had a lot of experience in SEO, we put a lot of emphasis on traffic from search engines and I optimized every section according to all the rules, adapted every article, did internal and external linking and a lot of other things.
But how can you optimize the client’s ad page for search engines and in general make it so that someone orders it, when people write 10 words and that’s it! Although we have developed a good functionality with a lot of possibilities to make your page essentially a sales landing page. But no, people thought that the phrase “presenter services in Kyiv” was enough to receive 100 applications per day.
Mistake 4. I expected clients to help me do my job.
If something can be done wrong, it will be done wrong. We needed a completely different service concept, a different approach, which our competitors successfully implemented.
I naively believed that somehow (I didn’t know and still don’t know how) I would be able to get people to try to make a high-quality, competitive ad to get more orders. As sellers on Amazon are doing it now, dresses for $500 for high-quality design of one product page. Because: the better the ad, the higher it appeared in the search results. I have developed entire search ranking algorithms. But no! One phrase is what people squeezed out of themselves. We began to call all such clients and spent almost 40 minutes on the phone, telling them how to fill out the ad so that you could actually get a client.
Apogee
Having carried out a huge marketing work, worked out and revised all phrases, landing pages, registration forms, created advertising videos telling the essence of the idea, we managed to achieve a regular flow of new registrations, people added ads and replenished the balance. At a certain point, we even had to expand the staff of account managers.
But the situation was worse with the fulfillment of promises.
Mistake 5. He did not calculate the cost of fulfilling his promises to customers.
It is necessary to calculate all the numbers before such launches. All these CAC, LTV, maintenance and fulfillment costs, and other profitability parameters of the future project
We were able to achieve good traffic to the site. But the percentage of orders was very small, since the ads were often of poor quality, and we also needed the potential customer to actually leave an application on the site with his phone number and confirmation via SMS. It seems to me that now people are somehow used to being asked for a phone everywhere, and 8 years ago it was more difficult. Although maybe this is just my subjective opinion.
Mistake 6. I underestimated people’s impatience.
People added ads, topped up the balance and after 3 hours called us and cursed why they still have 0 views.
Given that I was focusing on SEO, it was impossible to get traffic from search engines in 2 hours. I had to connect Google AdWords and other similar systems and drive traffic to the site through them. That greatly increased the cost of one placed order for us. But still, not all ads received a sufficient number of views, let alone orders.
But the most unpleasant thing in all this was that some clients received real phones of people who wanted to order their service at a price comparable to the cost of a couple of clicks in contextual advertising and were not satisfied at the same time! They demanded to return the money spent, because they and the potential customer could not agree on the price.
Mistake 7. Was not mentally prepared for negativity.
Such situations, and there were quite a few of them, really threw me off track and my hands fell down. I think you can’t build a company so that everyone is happy, and you always have to be prepared for negativity.
As far as I understood, many people who registered with us did not know at all what advertising on the Internet is, what payment for clicks or impressions is, and how difficult it is to get a real client. Therefore, they could not appreciate what we offered.
But all these, in general, were solved issues, and we gradually solved them and tried to move on, despite the growing costs, which were not even thought to be covered by customer replenishments.
What we have come to.
Mistake 8. Did not appreciate the scale and grabbed a piece that was too big
You need to realistically assess your physical and financial strength. It was necessary to start with one category and one city
When Jeff Bezos started his Amazon, he started only selling books. Then gradually the company began to expand the assortment by adding one product category at a time. Each new category of goods, it was a complex process that stretched for years. Now you can buy absolutely everything there.
And for some reason, I decided then that I would be able to launch immediately in all categories and throughout the country! As a result, we simply could not extract such a volume from our resources. I have created thousands of ads in Google AdWords, written hundreds of articles for each section, we improved all ads in our service. And as a result, a funny situation arose: there are thousands of service announcements, but when you go to a specific section, there are 1-5 ads. And if you filter by your city, then there are 0 ads. Thousands of potential service customers came to us and, seeing such a situation, simply left.
As a result, the dissatisfaction of our customers grew, costs kept growing, and I really could not pull it all off with my own strength and finances. Perhaps if we had attracted some kind of funding then, it would have been possible to somehow correct all the mistakes made and move on, but at that moment I was not ready for such a step. And the world of investments in startups was not yet very developed in our region at that time. As a result, having exhausted myself morally and financially, I had to close the bench. Although there is even more organic traffic on the site now than it was then 🙂
Instead of output
I don’t know if this article was useful to you, as I actually wrote it for myself as a retrospective analysis of my project. I made a lot of conclusions and now, when working on my new startup, which I wrote about here, I try not to make similar mistakes. Although he has already made a lot of new mistakes! If anyone is interested, I write about my projects and startups in the Telegram channel HugeProfit, subscribe 🙂
I wish everyone to make fewer mistakes and build really successful projects, about which success stories can be written!