First mistake of a startup

Hey there,

Today, I would like to tell you about one of the first and biggest lessons I learnt as an entrepreneur. As is usually the case, it all started with a mistake. I bet you will enjoy this one. It will take you 3 mins.

Here it goes!

I have a startup idea

So, it was 2016 and I had an idea. It was to connect dream contract tech talent with companies who need them - Flexiple. Seems simple enough.

I didn’t want to just build a platform where all I did was to have the two parties (contractors and companies) sign-up and directly find each other. I wanted a curated platform => a screening process for talent and personalized recommendations for companies.

To be fair to me, this wasn’t the crazy part. This I got right. With 100s of marketplaces out there, it had no space for me. Even if it did, I would not enjoy building a business where I could not deliver a high-quality experience.

Anyway, now comes the complication in the execution.

Complication

I decided that the first step would be to build a “cutting-edge” platform. The early evaluation rounds would “have” to be automated so that there would be lesser people remaining for the manual evaluation rounds.

So, the features included: automated tests, scoring, scheduling of interviews & tons of others - everything productized.

Seems logical. If too much of manual work was needed, then I would just not be able to scale the startup.

Wait a second, did I just say “scale the startup”? Did I have anything that could be called a startup? How many contractors had I started interviewing? What was our revenue? Ermm, ZERO and ZERO.

My mistake

Probably the mistake is there for all to see. But let me embarrass myself further by breaking this down.

Early on in a startup, there are 100s of things to solve. However, you surely don’t have the money or people to address all of them. So, you need to choose what to solve.

Now, what I had done (and what most other entrepreneurs do too) is to try to solve a problem that did not exist yet. Of imaginary “scale”.

At 0 users, my problem was not that I would have to spend too much time in manual evaluation of tech talent. It was to get my 1st user and make the 1st dollar. Then 10. Then 100. Million was a clear distance away.

By trying to solve the problem of “scale”, I had:

1. Ignored the problem of today - attracting talent & pitching to companies.

2. Built something I didn’t fully understand - no market research can teach you things that you learn by actually doing.

Result

We did end up building a product - one that cost us a decent sum of money and a lot of time. Piece by piece we realised that the product didn’t align with the reality of what was needed. And we kept omitting things, till one day our garbage bin contained the entire product.

Thereafter, just manually onboarding 15 developers into our network and working with 3 clients taught us so much more about the market. This could have been achieved with a simple Excel sheet and manual effort.

That’s what we did. Just this got us to $100,000 in revenue. I will share more details about this in a future newsletter.

Learning

So, as self-sabotaging as this might sound (being a founder of a tech talent network), don’t build a “cutting-edge product with AI” at zero users because “scale is important”. Instead, get as close to making money as you can.

Nothing is more real than that. No startup book. No mentor’s advice. No investor’s direction.

In conclusion

That’s my story on possibly my first BIG mistake as an entrepreneur.

Of course, if you are clear that building a great product is the next logical step for your company, I would love to help you. Flexiple has the best talent, a vetting platform and a Google-like matching product. And now we help hire full-time engineering talent too, not just contractors!

So, build your dream company and let us build your dream team :)

Best,
Karthik