5 Lessons From My Failed Startup In Mobile Location-Based Service

Two years ago, Aaron tried starting a business in the mobile space in the realm of location-based services. Now on looking back, he shares some of his experiences in that entrepreneurial venture.

Aaron writes:

I must admit, startup is a difficult road to travel. I do have my fair shares of failures. I just like to take this post to share 5 lessons from my failed attempt in creating a business for mobile location based services.

Every startup needs a full time founder

The three founding members of my team all held full time jobs. We naively think that we can cook this up in our spare time. Obivously things didn’t go as planned. Schedules were often missed. Development was slow. At times, it seems everybody is too busy to be doing anything.

It is from this lesson that I have insisted on having at least 1 full time founder in all our investees. Think about it. For every idea you have, there are at least 10 other teams working on it around the world. If every of these teams is as clever as you, and is spending 100% of their efforts on the project, what chance do you have if you are not fully committed?

Do not customise your product too much

Our first potential client was a bank. The number of times we had to meet, the effort we spent to customise our product etc was taking a heavy toll on the team. Worse of all, the deal fell through at the end due to the crisis. This means our cash flows were in a bad shape as we have incurred the expenses without realising the expected revenue.

We learned that if you want to sell to businesses, don’t compromise on your product. If your client requires too much customization, it probably means they are the wrong group. It is better to focus on getting the first sales of your existing product, rather than spent resources customising it.

“If your client requires too much customization, it probably means they are the wrong group.”

Decide early on when to cut losses

As we were losing money, there came a time when we didn’t know to continue or to stop. This caused us a lot of disagreements and unhappiness. I now believe that you should plan for such things. Decide in advance what losses are you willing to bear before letting it go. This will be very useful when things turn sour and your team need to make a decision fast.