Why well planned startups with great technology fail so often.

Entrepreneurs love to analyze what makes successful startups succeed and fail.  We think there’s a formula to the success that eludes us.  We think if only I could have technology that is as powerful as Dropbox, a mobile app as slick as Über’s, or even the creativity of Apple’s Wozniak we would be the next billionaire.  However, I think most entrepreneurs miss what makes a good business successful because we only hear half the story.

When we hear stories of the recent big successes in the startup world , Instagram, SnapChat, Nest, Über, Quizup (and many more I failed to list).  As an entrepreneur I think we all think the same thing.

“That could have been me!”

But that’s where we’re both right and wrong at the same time.  I like to ponder the question of could I have built that technology better?  Could I have done their branding and user experience better.  I can go through Instagram all day and say where it’s got small user experience flaws, walking through Über I tell you how getting a credit card into the app at the start is too big a barrier to entry, or I could show how Quizup’s menu is on the wrong side of the screen and how that shouldn’t work. I’ve missed it. Like many other entrepreneurs we forget what makes a startup successful.

Technology isn’t that important.

As an engineer I like to think technology is all that matters, but that’s not the case. No one really cares if Über is built on Node.JS, Redis, Python, MySQL and Mongo, or if Instagram uses a Django stack built on Amazon’s infrastructure.  It just doesn’t matter.  What matters is a fluid experience. As a tech entrepreneur I personally think we should always be chasing new technologies that make things easier on our development team, but these things just don’t matter.  Even Facebook was built with PHP, when a “real” techie would have built it with Python or Ruby.

User Experience isn’t that important.

Users don’t sit there and analyze where buttons should go, where menus should be, what titles say.  They use the app, and if they really like it they’ll learn to use it. I think we can agree Facebook’s user experience is not always intuitive, neither is Google AdWords, *insert some other technology you use daily and repeatedly ask yourself, “Where is that option I can’t find?”* User experience drives engagement, but if users want the technology enough they will be able and willing to learn the new technology.

What then is most important for a startup, and really business in general?


“Always Be Closing”

It’s amazing to me how many startups have created fantastic platforms, yet they can’t bring customers on board their system.  It’s not that the platform isn’t ready the platform is completely ready to go, but since they waited until the “end” of development.  Hint development never ends, they saw their product as never finished enough to sell, so they didn’t sell it. This is a fatal flaw in the tech industry because we aren’t salesmen, and we often frown upon cheap sales tactics, but mot tech entrepreneurs don’t realize that good salesmen, not bad used car salesmen, don’t use cheap tactics to sell.  They use the following “tricks” or just being “real” if you will, because a great salesman isn’t interested in “selling”, they are interested in you, and they happen to be selling something you want to buy.

“A guy don’t walk on the lot lest he wants to buy. Sitting out there waiting to give you their money! Are you gonna take it? Are you man enough to take it?”

Most of these techniques are covered in a must read of mine, “How to Win Friends and Influence People” by Dale Carnegie. But here are the traits of a great salesman and I think we all need to learn to be great salesman.

1) Put the customer first – Whomever you are selling to wants to know that you are taking them seriously and genuinely solving a problem they have, not you solving a problem they don’t have.  Don’t tell them what you do, find out what they need and then sell them on what you do.

2) Be the expert (be trustworthy) –  Customers want to know that your company knows what it needs to in order to succeed. You have to position your company as the expert in your field. You can’t start a house cleaning company, without knowing what customers are interested in having done. Know your industry better than everyone else. Or at least know it so well you think you know it better than everyone else.

3) Follow Up –  Always Be Closing. I can’t stress this enough. Most all sales failures come from a lack of follow ups and a lack of closing. Know how to close your customer. In software this means when people hit your website do everything in your power to get them to sign up and use your product.  I use tools like Olark to talk to customers who are hesitant about signing up.  I use email marketing campaigns after sign up to encourage users on how to use my software more effectively. Closing isn’t just getting them to sign up with software, especially if it’s free, it’s interacting with them in a way that creates a user that is tied to your product and doesn’t remember what life was without your product.

Sales is paramount to a successful startup. One of my favorite startup “exercises” I’ve seen is what TechStars Chicago did on their opening day.  They set up an exercise so that all of their companies could learn the importance of sales.  This exercise entailed all of their companies estimating how much bottled water they could sell, then selling those water bottles and hopefully making a profit. It’s very interesting to watch what companies were able to be successful at selling the water bottles and what companies weren’t. Some companies even sold all of their inventory and still lost money, and others sold half their inventory and made quite a bit of money. Sales is the foundation to any business and I encourage any business to try this exercise and really think about what you are trying to accomplish if you aren’t even able to sell water bottles successfully, we all need water and almost everyone is willing to pay for it.

The users are waiting to use your software/hardware, but they don’t know how, are you going to show them?

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