The founder of playcafe, a startup company, summarized 10 major failure lessons

Introduction: Mark goldenson, the founder of Internet TV game website playcafe, recently wrote an article about ten lessons of his entrepreneurial failure. The main content of this article is as follows:

A year and a half ago, I joined our co-founder, Dev
Nag) founded the Internet TV game website playcafe. We are ambitious to run a game show with a high degree of interaction. Players can watch our programs, answer questions, and win
It's a huge project to get bonuses, set up a team, chat in real time, and run their own games. Despite the enthusiasm of players, users can watch an average of 87-minute shows per game, 40% of users
Access again within one week-but the user size is still small. We may resume operation, but for now, we have decided to suspend website operations and return the remaining funds to investors.

The following are our reflections on past experiences and lessons learned and how to improve them. I feel that many entrepreneurs are afraid to talk about their failures and thus lose an important learning opportunity, I hope you can learn from our lessons.

　　1. First look for quick money

We were lucky to have met some top investors, but we spent too much time negotiating investment terms. There are only about 30 top investors in Silicon Valley who usually have enough investment projects to minimize investment risks.

Funds are more valuable than investment recommendations or contacts. Next time, we will focus on expanding the investor network to target those who are willing to make quick investments in the early stages of the enterprise, even if they are not very famous. Follow-up
Even if it takes too long for a person to hold three meetings, your relationship network is not large enough. In addition, a small investment will give you more time. For example, investor David Shen (David
Shen) made a comprehensive assessment for our website, and he decided to pay for us only once. So you have to find ten investors like David Shen.

In addition, as long as your project is good enough, big-name investors will naturally come to the door.

　　2. Do not make content by yourself

Making high-quality content every day is an extremely arduous task, especially real-time content. Taking TV as an example, the producer focuses on production content, and the TV network is responsible for broadcasting. The reason for this pattern is TV.
Production and playback are both very difficult tasks. David and I both realized that we are completely new to content manufacturing, but we take it for granted that it is easy to find a beautiful girl to play games with a video camera and a netizen.
But it turns out that we are wrong. This kind of content is simply not what we can afford.

Taking "American Idol" as an example, even such programs with rich resources may often go wrong on a business trip, such as audio faults, knots of the host or contestant, and incorrect camera angles. Moreover, they do not need to cope with DoS attacks, server downtime, customer support, and other problems we face.

Therefore, I suggest entrepreneurs or investors who are interested in making content think twice. Content production is more difficult than technical development. NO content producer on YouTube
It can earn 1.65 billion of $ 1% (Note: $1.65 billion is the amount Google has bought YouTube ). In addition, the popularity of digital video recording technology DVR and media sharing technology makes content producers
The decrease in revenue and the emergence of pay-as-you-go ads have also led to the reduction of a large number of ineffective ads in the market. Therefore, the main or even only reason for making content is that you are purely a hobby.

　　3. Choose between speed and stability

Another failure lesson of playcafe is that it takes too much time to develop excellent content and technologies. We want to make the website complex and stable, but this practice is doomed to fail in an industry based on innovation and entertainment.

There is a metaphor I like very much: If a beginner is allowed to take two steps at a time, he can even beat the chess master. Although this practice will generally lead to a bug increase and anger Those perfectionists, but
LinkedIn co-founder redley Hoffman (Reid
Hoffman) said, if you look back at the first version of your website and don't feel ashamed, it means that you have spent too much time on this version.

However, the exception is that your product performs specific tasks for users. For example, if eBay fails, it will cause huge losses to users, twitter errors only make people laugh. Ebay must be cautious, because 1.3 million of enterprises rely on the stability of its services, so there is no error.

　　4. Time is money

Well-known angel investor Paul Graham
Graham) there is a saying that excellent entrepreneurs will use their own resources with embarrassment. I have a bad problem, that is, I like to bargain for fun. For example, to save 100 USD for wireless Internet access,
I will spend three hours cutting prices. This is a waste of time relative to our financing scale. Bargaining for a small amount of money actually ignores the real value of time.

Time is more valuable than money, because you cannot get the time. David once suggested to price our time. You can calculate your work time based on salary, remaining financing, or company value. We are every small
$50. If it takes me five hours to negotiate a price cut, I have to cut at least $250. As your financing grows, the price of your time will rise.

　　5. Marketing is not a trivial matter

The main reason for the failure of playcafe is the marketing failure. David and I both come from PayPal, a company that is almost hostile to marketing. Our efforts in SEO (Search Engine Optimization) and SEM (search engine marketing) are still fruitful, however, to attract users to watch Real-time programs, continuous and skillful marketing activities are required.

Like content production, I don't think marketing is a trick that smart new users can figure out in their spare time. As the Internet becomes more saturated, marketing can make a difference. Marketing is also a profound learning, not easily controlled by outsiders.

However, there are some exceptions, especially for one-to-multiple products. New users will be generated during the use of such products. This is not a word of mouth that users need to advertise for you.

Next time we start a business, we will get enough funds to hire a marketing expert at the beginning of the business.

　　6. Control and compute users' acquisition costs

We initially thought of marketing as an extremely creative activity: Making promotional videos and initiating marketing activities. This idea is only partially correct, and the best marketing should be controllable and accurate. If you accurately calculate the cost for new users and take control of the entire process, you will know the amount of money and income required, which can turn fuzzy guesses into clear mathematical formulas.

Before finding a marketing expert, you can use the adwords keyword tool to start your own marketing. It will tell you how many people will search for a keyword on Google. There is also a tool
Traffic
Estimator, which roughly calculates the cost of buying an advertisement keyword on Google. Yahoo has similar tools. An ideal keyword should be searched more than 10 thousand times per month.
There are no more than three competitors for word ads, and they are highly correlated with your website.

In addition, I will not place advertisements in PR companies, CPM (cost per thousand people), billboards, TV/broadcast. We once invested $5000 for a promoter. After no effect, he said that we would invest another $5000 to see the effect.

　　7. attach importance to your partners

The two disadvantages of partnerships are the slow response of partners, and you cannot control them. However, in addition to increasing the number of users and revenue, partners are also useful. They can expand your relationship network, teach you how to sell, help you discover potential competitors, and become your potential acquirer.

Because we believe in our own strength too much, we have slowed down some of our partners. They later said that if we had formed a closer partnership with them and confirmed their value, maybe they would have acquired us.

We also learned that informal partnerships can be established in just a moment. Meeting with the partners's decision makers as early as possible, keeping in touch with them, and sincerely helping them all contribute to strengthening the relationship and goodwill between the two parties. The establishment of such a relationship requires foresight and perseverance. "Before marriage" helps to establish a more stable relationship.

　8. Do not underestimate expenditure

Although I suspect that more financing may lead to a different outcome, a higher amount of money will always allow us to try more strategies. We developed a detailed financial plan, But I underestimated the cost. Next time we start a business, we will calculate the actual cost better and get a little more money, so that we can avoid re-financing when there is a lack of money.

You can find some successful entrepreneurs who want their financial plans as a reference. I disagree with the statement that the financial plan is a waste of paper because it can help you estimate the number of employees, the size of financing, balance of payments, and so on, and determine whether your business model is crazy.

　9. Leave a late hand in the negotiation

The most useful advice I get is from Bill Trenchard, the founder of liveops. He believes that "You will always stay on the road ".

As a founder or CEO, everything you do is related to negotiations: Contact investors, hire employees, sign cooperation agreements, and so on. The best way to persuade the negotiating competitor is to show clearly or implicitly that you have many choices. It is enough to have two choices.

　　10. Easy to learn

Most frustrating is that David and I know a lot about the above theories. We have all worked in three startups for 10 years (but we have never been fully responsible ). If I sent the above theory to myself two years ago, I believe that my thoughts are the same as most of you, that is, these statements are purely lazy.

For me, the newest lesson is the ease of action. Silicon Valley is filled with advice, but like a surgeon who only has theoretical knowledge but has never undergone surgery, I think it takes many hands-on experiences to understand the complexity and variables of entrepreneurship.

Many useful suggestions conflict with each other, such as understanding your users and operating according to your own ideas, avoiding excessive financing, and avoiding too little financing. The best answer to these questions is location
Yes. We recommend that you do not execute code as easily as you do. Instead, you must have skills and references to understand map coordinates. I hope that our experience will help us and you get closer to success.

 

Source: http://tech.sina.com.cn/ I /2009-05-06/00263065254.shtml