How To Make It as a
First-Time Entrepreneur

How to Make it as a First-Time Entrepreneur

Vinicius Vacanti is co-founder and CEO of Yipit. Next posts on how to acquire users for free and how to raise a Series A. Don’t miss them by subscribing via email or via twitter.

I remember reading the first few pages of Steve Blank’s book, Four Steps to Epiphany, and thinking two things:

  • This is not exactly a page-turner
  • This is a really smart way of thinking about startups

Soon after, I started attending the Lean Startup meetup in New York and reading Eric Reis’s writings. I was believer.

One of the main principles is to release an early prototype of your idea to potential users to get their feedback.

But, despite being all in on the Lean Startup movement, we didn’t do that.

Why Didn’t We Release an Early Prototype?

Our current idea, Yipit, would find all the deals happening in your city (sample sales, happy hours, retail discounts) and would send you an email with the best 7 based on your interests and your locations.

It would have taken us just a week to have launched an early prototype.

We could have measured success based on whether people opened and clicked on the emails. We could have manually created the emails with deals we found and used MailChimp to send them out. There was no need to build any tech infrastructure.

But, we came up with all sorts of excuses why we just couldn’t release an early version.

Six painful months later, we finally put out the product. It didn’t work which was okay. What was not okay was realizing that our excuses for not releasing earlier were all wrong.

The Excuses We Came Up With

The bright side is that, 6 months later, when we iterated Yipit into a daily deal aggregator, we learned to ignore the excuses and released a prototype in 3 days that took off right away.

Below are the excuses we had and how we realized they didn’t matter:

  • It wasn’t good enough yet. We thought manually sending deals wasn’t good enough. We were guessing and didn’t really know. It turned out that six months later, the automated version full of features wasn’t good enough either. We could have learned why it wasn’t good enough 6 months earlier and spent that time actually trying to fix it. Instead, we just guessed why it wasn’t going to work and guessed wrong.
  • We didn’t want to give a bad impression to those early test users. I can safely say that this doesn’t matter. Those early test users just don’t care. After we re-launched as a daily deal aggregator, we got exactly one email from a user saying they missed the sample sales. That’s it. In fact, many of those early users enjoyed seeing our product develop.
  • It needed these extra features. We thought we had to have a web view, people had to specify where in the city they lived, it needed to have links to the source of where we found the deal. None of these were right. We were guessing. Had we launched in a week, we would have quickly realized these features weren’t going to make a difference.
  • It was going to take us a few months to build the tech back-end. We shouldn’t have built it. We should have just used MailChimp to send the emails. For the next iteration of Yipit, we didn’t build the back-end. Users don’t know what your tech back-end looks like. Focus instead on getting the user experience right.
  • It needed to scale to accomodate hundreds of thousands of users. No, it didn’t. We weren’t going to get hundreds of thousands of users. Not anytime soon. We should have just been worrying about getting our first 1,000 users.
  • Someone will see what we’re doing and copy it. If our idea had any merit, then there would have been at least 10 other groups of people out there also actively working on it. In fact, there were many groups of people working on a daily deal aggregator. But, because we launched in 3 days, we were the first ones and got most of the press attention.
  • A potential investor will see it. I’m not sure if an investor actually did see it. But, even if they had, it’s not a bad thing. Investors like to see the progress you make as a product and as a team.
  • TechCrunch will write about us when we’re not ready. They won’t. We spent a bunch of time trying to get people to write about us and they didn’t. Also, in some crazy scenario where someone writes about our terrible prototype, I can safely say it won’t matter in the long run. Startups succeed because they have a good product and not because they got good launch PR.

The Excuse I Didn’t Admit

There’s one more excuse I had but didn’t talk about. I was afraid it wouldn’t work.

I had quit my job. I had told my family and friends about the idea and they’re all telling me how much they believed in me. What if the idea is bad? What if I had to tell them it didn’t work? What if I had to admit failure?

You have to fight this feeling. The best way I’ve come up with is to think of a startup as an experiment, not as a business. Your early experiments are supposed to go wrong. Your goal is to find out what went wrong and iterate.

Lastly

For those of you that don’t have an amazing excuse (like you will be put in jail if you do this), please launch an early prototype. Not waiting to launch is, by far, the best advice I can give. Hopefully you’ll listen more than we did.

Vinicius Vacanti is co-founder and CEO of Yipit. Next posts on how to acquire users for free and how to raise a Series A. Don’t miss them by subscribing via email or via twitter.

  • Anonymous

    Great point. This is an important discussion that all product-centric startup’s founders should have internally and externally, as early as possible.

  • http://www.hypedsound.com jonathanjaeger

    As long as you’re not making a huge PR and marketing splash, which most startups shouldn’t, there seems to be no reason not to launch as early as possible.

    • http://viniciusvacanti.com Vinicius Vacanti

      Even if you are planning on doing that, which I don’t think you should, then you can still release early to a private set of users.

  • Dan Schiffman

    So How did you get those first 1,000 users?

    • http://viniciusvacanti.com Vinicius Vacanti

      I’ve written a post: http://viniciusvacanti.com/2011/02/24/how-to-keep-your-first-1000-users/

  • http://twitter.com/louhong louhong

    @Vinicius curious to hear your thoughts on if you think this
    approach is the same for B2B products or is there a material difference
    in expectations?

    • http://viniciusvacanti.com Vinicius Vacanti

      Very much applies to B2B as well. In fact, Steve Blank was originally talking about B2B startups.

      • http://twitter.com/louhong louhong

        I agree that it is 100% applicable I just wonder how different the bars are between the two. I’ve found that there is a higher tolerance for consumer products than b2b esp when it comes to getting your first customers. This is def a reminder that I need to revisit the book. Thanks for the great post!

  • http://www.digitalocean.com/ Moisey Uretsky

    We’re building cloud infrastructure so our development cycles are long by default, but after reading the Lean Startup I said ok, we’re freezing changes and launching with what we have now to get user feedback.

    It was great decision and it validated some of our thinking and pointed out some blatantly obvious things we missed earlier.

    Now we getting ready to launch our 1.0 beta API and we’re following the same practice, launch it sooner, get it into beta testers hands earlier, and have them give us feedback while we’re still finishing the final 1.0.

    You’re absolutely right, sometimes it’s just about getting over that fear hurdle. Will people like this? Will they use it? 

    The 80/20 principle applies to product launches as well. 80% of the benefit is from 20% of the core product, people will either echo this is great or not based on that. If the path is right you can finalize, fix, and get everything ready for a full 1.0 knowing that your work is validated earlier.

    LeanStartup FTW.

    • http://viniciusvacanti.com Vinicius Vacanti

      Awesome!

  • Matthew A. Myers

    Thanks for sharing this.

  • http://twitter.com/LearningShift Learning Shift

    Very helpful and inspiring thanks!

  • Anonymous

    Developer here.

    This is great for products that are new and unique and therefore don’t have competitors (yet), but I would say the opposite of each of these points is true if you’re building something that’s already been done before or you really want to launch with a bang.You said you were able to get your product up in 3 days (since it relies on MailChimp) and the copycats didn’t get the amount of press you did, even though you later say press doesn’t matter(?). Many developers can’t scrape something worth legitimately shipping even in twice that time, and you sort of contradict the entire article in the event that the service has pre-existing competitors. I think it is too ambitious to assume that none of these bullet points matter. Google+ and the long list of failed social networks is a perfect example of it. Even in scenarios where the product is a fairly new concept, everyone’s time is limited and they’re getting bombarded by new sites every day. You need to be able to prove to users that it is worth their time to sign up and visit/participate with any frequency by having fleshed-out features that really make it stand out or make them say “It’s about time.”

    • http://viniciusvacanti.com Vinicius Vacanti

      While I understand where you’re coming from, I have to disagree with your conclusions. How do you know it’s not good enough? How do you know what’s a bang? What better way to know then to have real users telling you it is or isn’t.

      • http://www.facebook.com/people/Danielle-Zarlino/100003300207592 Danielle Zarlino

        Vinicius. Our team contacted Kiwanis International in November of 2009 with a bunch of very cool processes to help build membership to one million by 2015.  Do you have any free time to help us? We have some win win processes | Text the word | CinemaCity to 90210 | Go where the eyes are today here | http://iZigg.com/brending is a neologism like pinterest. Branding + Friending = Brending (c)(tm)(r) | 614-448-0090

    • http://www.facebook.com/people/Danielle-Zarlino/100003300207592 Danielle Zarlino

      Here is a slide of a ship ready to get under way. Why do you think they limited the production and never launched?

  • http://www.johnmcfarlane.me.uk/ John McFarlane

    You said that you iterated Yipit into a daily deal aggregator, do you feel that the information that you gathered from putting your product out after those 6 months and the other path of putting out an early prototype would still have brought you to what you have now? Maybe having the product provided better answers, better feedback than a prototype at that stage might have, even though your 3 day prototype took off right away, theres always the possibility that it might not have.

    • http://viniciusvacanti.com Vinicius Vacanti

      That’s a fair point but I really do think the first time a user actually tries your product, you learn way more that day in months of strategizing and speculating.

  • http://www.nashvilletechfeed.com/ David Beronja

    We did the very same thing last year with our web app. I learned a very different lesson. Research. We wouldn’t have spent an hour coding if we had done basic homework. Why waste your time on something that you have no idea if it had a market or revenue stream(s).

    Thanks for sharing what you learned. I bookmarked it for future reference.

    • http://viniciusvacanti.com Vinicius Vacanti

      Doing some basic research is definitely worth it. Although, I generally recommend people start companies in areas they are already very familiar with.

      • http://www.nashvilletechfeed.com/ David Beronja

        We were all in the music industry but we ran into an area of the business that a lot of people don’t interact with. Had we taken the time to call a few people we would have found out and rethought our idea. It took us 11 months start to finish to learn our lesson. But I’m using it on the next idea.

        You stirred a whole twitter conversation between me and my startup friends. Debating fake it to get data and mine of research then fake it then boogie! heh.

        • http://viniciusvacanti.com Vinicius Vacanti

          It may seem like you wasted 11 months but it’s not the case. You probably learned a tremendous amount and sounds like you’re using the domain specific learnings in your next idea.

          Best of luck!

          • http://www.nashvilletechfeed.com/ David Beronja

            No, it wasn’t wasted time but it wasn’t effective use of it either. The second project I’m not going into development until I have some basic foresight whether there is a market and revenue streams. 

            I think we make the mistake with online ventures because the minimal cost associated in getting something going we should just rush to build it. We forget some of the basics of business that brick and mortars have had to deal with since the beginning of time. Sorry, I’m going counter to the build it fast concept but I think we’d have less failures online if we went back to the some business 101.

          • http://www.readysetstartup.com/ Susan Jones

            I agree with you David that doing your research is really important but it doesn’t have to be research OR releasing early. 

            You can do both. 

            Going through an opportunity evaluation process and then designing a market test is a very sensible way to go that will give you lots of certainty about whether your idea will work or not.

  • Anonymous

    This is a great post – thank you for sharing. I think it’s worth point out, in the context of this post as well as all the discussion about MVPs and iterating and failing fast etc., that launching early doesn’t have to mean launching difficult to use products that don’t look good or work. I think the trick is to reduce the functionality so as to deliver the core value of the product, AND NOTHING ELSE, and make that work well, look good etc. It’s important to launch as soon as you can with a working product that is easy to use – doing all of things simultaneously demands that the functionality is limited. You can always add other things later, or remove things, etc. Perhaps Jack Dorsey said it best – perfect all the details, just limit the number of details!

  • Han Gu

    The fear of bad impression and that users wouldn’t return after that point, have always been a big factor in our previous attempts. As much as the notion of quick-release, quick-feedback makes sense, at times it almost feels counter-intuitive. I am going to give this approach a try. (after I convince a few people first, lol)

    • http://www.johnmcfarlane.me.uk/ John McFarlane

      I think that there are extremes in both directions, people taking too long to get something out there and people literally in a blind panick to get something out so ultra fast that they are going too fast to make use of the very information that they have gathered about customer development and how to do things properly.

  • http://www.neotericdesign.com/ Nick Gracilla

    I believe your final excuse — fear that the product won’t work — has a lot more weight than you, or most entrepreneurs, let on. It’s terrifying, its irrational, its deeply emotional, and it ties up an enormous amount of energy. I like your strategy of thinking that “I expect this not to work, so I can iterate” is a good one.  But it’s an intellectual strategy (the right one!) that still doesn’t quite address the emotional weight of fear.  I don’t have a solution, but I’m thinking some kind of similar emotion needs to be generated to counteract the fear factor. 

  • Anonymous

    Hey Vin!

    Great story, thx.

    All these lessons became very clear with hindsight. Some of them, such as building a backend, needing to scale, getting PR, all hold true regardless.

    BUT…if you did launch quickly & it failed, how could you be sure that it failed because it was simply the wrong product?

    Maybe you failed because you did not infact have enough features.

    Maybe you failed because it just wasn’t good enough. Right idea, right product, just not executed well enough.

    Don’t get me wrong, I’m not questioning the underlying principle of LEAN, just that defining precisely what needs to be in that MVP is never as cut & dried and we’re sometimes led to believe.

    • http://www.readysetstartup.com/ Susan Jones

      That’s where the experiment part comes in. You can design a test for a lot of those factors and put it out to the market.

      Better yet, talk to your users. They will tell you exactly why they didn’t like it and what they think it needs.

  • http://twitter.com/DarrellEllens DarrellEllens

    Hi Vinicius, spoken like a true entrepreneur.  I always appreciate stories about the behind the scenes look of any start-up. We all have our fears, finding the strength to admit to them is the hard part. I admire your strength!

    I like your last statement: “There’s one more excuse I had but didn’t talk about. I was afraid it wouldn’t work.”

    Being able to admit is one thing, being able to make it known publicly takes a certain character trait. We all have that fear, we don’t always admit to it.

    You make some valid points about how and when to launch. Your right about the first thousand user being very important.

    Thanks for sharing!

    Darrell Ellens in Vancouver

  • Strauss Van Humperdink

    Just curious about what your experiences were with any incubators, I know that you guys were at General Assembly and what were you’re take aways from that experience.  thanks.

  • http://twitter.com/DimSumKitty H. Raven Rose

    Brilliant article. It’s the same with writing and other forms of creative express. The judging critical left-hemisphere seeks perfection and will use logic to block or delay imperfect executions. But you’ve found the key, selling your conscious mind on process as experiment (whether phase 1 of a start-up or limited release advance reader copy book), inviting the mind to view the process as perfection and encouraging the risk-taking required to be a relentless creator.

  • http://www.mominthecity.com/ Kimberly/Mom in the City

    Thank you. Your story inspired me to “just start” and work out the kinks as I go!

  • Kriti Vichare

    This is a great article….thank you for this…
    I’m sure this will ring true (inspired by our launch delays) http://www.entrepreneurfail.com/2012/12/launch-and-learn.html

  • http://skibb.it/ Skibb

    Very candid insight, thank you for this so much.