Entrepreneurship two years 3 failures, what are the entry mistakes made?

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On the August 25 of 2013, I was packing up the rest of the clutter in our office with three partners from the customer team. Partner J sits on the floor and says, "This is my third startup failure, okay?" In fact, he means, in November 2012, he was responsible for shutting down his office in Beijing's east Quad, selling all the furniture and office supplies, and packing and withdrawing; in February 2013, he once again cleaned up our once large office with a team of even half of the staff who had just cut back (the one with all the big blackboard walls). , pack up and get ready to withdraw. This is his third time. Throwing things, packing, handling, carrying countless hours of overtime in the night space an empty moment. And the company is about to turn from a business to a part-time project run by interested people.

Many people have asked me how to find what I want to do, my answer is: To do something, to try to create something. This will open a door to your life, bringing new opportunities and visions to make you know who you are. And if you make a lot of mistakes (almost inevitably) in the process, acknowledge them from your heart, summarize them, share them in good faith, and learn to enjoy it. This is the only way to achieve "informed optimism".

Because we can't eat fat, we have to have a bento.

Getting started error one: Premature product

Even the first idea is to do a "different experience" of the trading market. In other words, is an offline experience consumption of Taobao. From the first day, I hope the team can develop a prototype product as soon as possible. After doing market research, writing business plans, and finishing the first batch of offline partners, I thought that developing a prototype product was one of the first prerequisites for this project, so it ultimately led to a huge limitation on the speed at which programmers developed prototypes.

And time is exactly the biggest cost of starting a business.

People who have heard of "lean entrepreneurship" know the idea of minimizing the viability of a product--that is, to test the market's response with a product that minimizes the core needs. The core principle behind the MVP is to reduce the time cost. Still, I have mistakenly thought that MVP still needs to develop a prototype product.

The fact is that in order to bring a project to market, it is not a prerequisite or even a necessary condition to develop a product for yourself. A product is simply a tool that turns an idea into a structured, automated service. But before you turn your ideas into automated services, what you should do is to first make sure that your ideas are workable, by looking for product-market fit. And then turn the idea into a universal automation service by developing the product.

In other words, before you decide to develop an automatic vending machine to sell drinks in the subway, please stand in the subway for one weeks to see if anyone is paying. The truth sounds simple, but myself, I've seen too many entrepreneurs turn these two steps upside down.

Is it feasible to test the product before developing the product? And in most cases, it's doable. There are so many ways to achieve this. One of the great things about this time is that there are too many open resources for our common people to use. Build a micro-blog, build a micro-letter group, build a forum (watercress Group/Baidu Bar), open a Taobao shop, build a template based Web site-the five most popular tools can achieve 80% product creativity.

If you re doing a service market such as a customer, Weibo + micro-letter + Taobao is enough to meet 90% of the function. But let's give two examples of other areas.

Suppose you want to sell high-end sexy underwear over the internet. You should not develop a Web site on your own (although you may think the high-end synonym is to have your own website)-You should open a Taobao shop first. Although you may think that Taobao is not high-end, many people in Taobao successfully do a customer price of more than 50,000 of the merchandise business. But considering opening a Taobao shop for a few days, and time is the biggest cost, you should not even open Taobao shop first. You should build a microblog (10 minutes) to post pictures and information about the erotic underwear you want to sell. Build a micro-signal (10 minutes) to add people who are interested in you as friends and build your core customer management system (CRM) through micro-letters. Find two or three more channels (online or offline) full of targeted users to spread this micro-blog and micro-letter message to study the market's response.

Similarly, suppose you want to do an online education community on the Internet in a building area. You shouldn't have developed a community site with a video function, or at least three months of being consumed. You only need watercress Group/Baidu Post Bar/discuz Forum + Youku. I think you know what I mean. Don ' t go for fancy points. maximally Fancy isn't why we build a startup.

Remember, the most important thing is what you do, not whether you develop a product independently.

Entry Error Two: Think of originality as secret

This may be the most common beginner's mistake in the early days of entrepreneurship, including myself. If you are reading the following story, can't help but want to say "silly fork", then please promise me one thing, that is, you will never make this mistake yourself.

In the first half of the month, when someone asked what the customer was doing, I replied, "Sorry, we signed a confidentiality agreement." In fact, in order for every full-time and part-time employee to have this sound cool excuse, we drafted and let each employee sign a serious confidentiality agreement (ah, what a waste of time).

When I realized how stupid it was after half a year, I started to open myself up, actively promised to date my friends, and talked to a lot of new friends about the model. It was then that I realized that I was not a fool.

In late September, my old friend A, who worked for a top-tier C-fund, came to me for dinner, hoping I would give some advice to the start-up company he was still in. In the financial circle has been doing for five or six years A is a very simple and sincere and social experience of friends, he told me that he encountered the problem is to start a business, write a plan, but can not find a senior industry experience partner. Although he has a target candidate, he is worried that if he tells his own ideas and patterns, he may be able to do it himself. When I asked him what the idea was, he answered with a slight reluctance that it was in the high-end food industry. I sensed his reluctance, and I did not ask him to go on.

After a, I've seen two of younger entrepreneurs who have stalling their secret protections whenever they talk about specific ideas. In retrospect, the more experienced entrepreneurs are apt to make this mistake, because they often feel that their valuable ideas are the core weapon of their highly qualified practitioners and companies in the industry.

In the internet age, anyone who has made this mistake has been poisoned more or less by a film-the social network that describes Facebook's entrepreneurial story (Social receptacle). In the film, Harvard's high-fidelity twin, Winklevoss brothers, told Facebook's ideas to Mark Zuckerberg, the "industry veteran", who had been plagiarized and preemptive, and turned into a banknote printing machine. So the movie man would have thought, even though my ideas aren't worth hundreds of billions of dollars like Facebook, at least they have the potential to make tens of millions of renminbi valuations. If the senior person also plagiarism, it is very sad.

To escape the abyss of thought, one must first understand what is at the heart of the idea.

In some people's minds, creativity is a cool product feature-it's a rookie mistake. The essence of an idea is to find a market demand, and to make a product to meet this demand. There is no use for a unilateral cool, but a chemical reaction to fit. So the core of creativity is product-market fit.

From this perspective, a good idea is indeed the most important of all entrepreneurial elements. My point is that product-market fit is more important than team and execution. What's more, for example, numerous famous serial entrepreneurs, venture capitalists, and Silicon Valley great God Marc Andreesen are called the only Thing that matters. Interested friends can carefully read the deep logic behind this view, and this is not going to unfold.

But that doesn't mean you should protect your mind's ideas as confidential. On the contrary, you should share as much as possible with the senior people who know the industry. The reasons are as follows:

In fact, the probability of your creativity reaching product-market fit is slim when it is just conceived. You have the idea of a product, but not necessarily the most understanding of the market. Sharing your ideas with industry veterans will greatly help you adjust your product creativity to reach the most important product-market fit.

And if there are people in the industry who think your creativity is fantastic and you have the ability to make it happen, then normally, he should be working with you. This is a good thing for your entrepreneurial success.

You must be thinking, what if something is going to happen? I'm still afraid to take the risk. Well, let's analyze it.

If you have the ability, but he still chooses a person to secretly start alone from scratch (this is really a chance to pick one), then he lacks the ability to do a great deal of the people need to do-you have more advantages. In turn analysis, if you do not have the relevant ability, just have a creative, then this opportunity itself does not belong to you Facebook film is actually such a story.

In other words, you have no loss in either case. But through these exchanges your harvest will be enormous. You'll have the opportunity to avoid a lot of unnecessary attempts, take many detours, find product-market fit more quickly, and thus save a lot of time (remember? This is the biggest cost to the entrepreneur).

In fact, our creativity is just like our own children, it is easy for parents to overestimate their value. But when you move your child from a confined nursery to a natural environment for questioning, criticism, and attack, you will find that it is starting to thrive.

So now, every time I have a creative start-up, I will not only find industry veterans and listen to them, but also share them with friends who I think are the target users. The former can help me from the technical level and industry macro perspective from top to bottom to see a creative deficiencies, the latter can help me from the bottom to understand the target user's microscopic view.

A good idea is really the most important of all entrepreneurial elements, but 99 of the 100 ideas are bad. Many smart people make this mistake because they selectively ignore it.

Getting started error three: Don't do the platform first

I thought that starting from the platform to start is a only I will make a low-level error, but recently still see a succession of friends just start to jump into the abyss of the sea. So decided to share their own platform for the main points summary: 95% of the case, start to do not do platform (Platform/marketplace), I will use personal experience to tell you why this road escape, meet the special conditions of the 5%, you can consider to do the platform, but please wish your own good luck.

Three big questions about starting a platform

1. The first big problem with the platform is that you can't do what the entrepreneur needs most. Because you always need to serve two different users: the buyer and the seller.

For even the customer, our earliest idea is to do a "unique experience" of the trading platform, that is, an online experience of the consumption of Taobao (now I hear any entrepreneur said I want to do Taobao, XXX, I will be in my mind first can not help questioning). This means that we seem to be doing a product, but in fact, to develop two products: one is the service in the offline service provider side of the background, the other is to serve the online consumer's front desk. It's hard to make a good product and it's even harder to do two good products at the same time. To make matters worse, if one of these two products is not done well, you will face the next big problem.

2, the second biggest problem of the platform: chicken and egg problem. Not enough sellers, users will not come to your platform; Not enough users, sellers will not be happy to update your platform-so you have to do two magic things: (1) to force the buyer and the seller's traffic at the same time (2) to ensure that their traffic on either side will not decline.

Many startups are even harder to do (1). Even the guests cost a great price: we started with 200 highly qualified online service providers and 60,000 users who applied for beta--this is a six-year offline business development and a blog with more than 2 million blogs. The former is not in line with the entrepreneurial science of a large amount of resources input, the latter is a great luck.

Then we fell to point (2). User activity declined because the product did not meet the desired stickiness. If you only worry about the user traffic, then the crime is not to die, improve the product and strive to bring the active degree to the good. But for the platform, the user flow is lower than expected we soon saw the seller's enthusiasm decline. After a few vicious cycles, both sides of the flow are greatly discounted, before all the resources into short. This is difficult for start-up companies to bear.

Because of the above two problems, most of the platform-type companies are stuck in a very awkward position: there is some traffic on both sides, but both sides are not up.

3, this will encounter the third big problem of starting a platform: low profit margin. Most of the cases, the domestic platform, you have to accept the start of the gross margin of less than 10%, and eventually return to 5% or lower reality. If your labor costs are proportional to the size of your revenue, that means your pure interest rate is around 1%. In other words, one months to have 100,000 of pure profit, you have to do 10 million of the water (imagine). So when both sides of the flow are barely moving forward, the profit is not in sight. Over time, your passion, your confidence, your work and your life will be wiped out by the foreseeable future.

5% small probability favorable condition

In order to ensure the objectivity of the analysis, I still inserted this paragraph for the small probability of the condition of the elaboration. 5% means try not to put on yourself. These conditions have a role to play in the success of the Platform for entrepreneurship, but it is only a bonus point. Rank from highest to lowest in importance:

Godfather has the Seller channel resources (at the beginning of the platform, the seller is king). In other words, you or your shareholder company have successfully integrated the vendor resources in the industry so that you only need to focus on the buyer's services. This is a rare situation because most industry integrator will have a better way of earning money than doing the platform. Most entrepreneurs either find business opportunities in the fragmented market or want to integrate highly fragmented markets with the Internet.

The Godfather has the money, has the buyer flow resources, and he is determined to put you this dry son to smash out. Successful case: Taobao, 2003-2008 5 years time and master Ma hit 3.5 billion. But even so, does not represent a certain success. Failure case: Baidu, Philharmonic live a succession of failure to prove that the platform is not you want to smash, want to hit.

High degree of informatization of sellers. China's Internet is currently a successful O2O platform for hotels, airlines, booking tickets, such as the industry. These sellers have realized the electronic information of individuals before the advent of the Internet, which greatly reduces the difficulty of the platform in bringing the seller's information to the Internet. By the way, never expect to use your products to face the challenge of Chinese businessmen ignorant internet use habits. You're going to go crazy.

The seller's resources are highly concentrated. This means that you can perform the vendor's integration very efficiently when you start. But the reason to put this in the lower position is because the high concentration of resources means that it is easy to start a business, but also means the loss of the barriers to push, so large companies can easily enter. But how with the big company PK, this is something.

You'll be at least 5 years behind you. Success Stories: The public comments, the current domestic only successful local life service platform. Starting from 2003, all the way through today. This is also a point that CEO Zhang me to admire as a Wharton seniors. Perseverance is a part of the other three indispensable elements, and the support of the people around them.

Here are also the 10 factors that benchmark Capital partner Bill Gurley in his blog summarizing to assess the value of a trading platform (MX to consider when evaluating Digital Marketplaces). In addition to the fourth article from the operational point of view is quite different, the other is worth reference.

Advice to "platform" dreamers

Dream Big and start Sgt. Many people will dream big, but the difficulty is how to start Sgt. Here are some suggestions for friends who have big dreams:

Before making a platform, specialize in a goal: either the seller or the user. If you think your product has a value for sellers other than the flow of traffic-for example, social marketing, customer relationship management, and so on-then consider focusing on the SaaS service (Software as A) for sellers. If you don't like this kind of business, see the following two suggestions.

Sellers and sellers are usually more important, this is the "chicken and egg problem" answer. Because the buyer provides the money, the seller provides the value, you need to make your product valuable first.

So, do the seller first. This way you solve all of these problems to a large extent. Choose the mode of the Business-to-consumer as a starting point, you can be more focused, not worry about the issue of bilateral traffic, and the increase in gross margin will make you faster to achieve profitability.

In addition, you can always end up with a platform by selling tools or selling products. But you have to focus on making a good product, not the other way around. Simple case: From Google search to Google platform, from ipod to itunes, from the iphone to the app Store.

Finally, I'd like to say that if starting a business is a game, then the platform is Hell mode-because you're playing two games at the same time. Assuming that you work 10 hours a day to be successful, choose the latter to work at least 16 hours a day. It will be more painful for you to have a hard life. Some people will say, "Entrepreneurship is not to challenge the difficulties, the more difficult it is more full of business opportunities, as entrepreneurs should be more difficult to meet." My point is this-please don't try to pick yourself up. No matter what you choose, from the moment you decide to start a business, there are enough unpredictable difficulties waiting for you. You can't predict these risks, but you have the right and the responsibility to choose the game that best helps you from the start.

It's a simple fact (and that's why the smarter people are more likely to make mistakes). So when you have an idea, it's not about betting that it can hold a home run, but how to make sure it's not one of those 99 bad ideas in the quickest way.