4 lessons from building my first startup [guest post]7 min read
This is a guest post from Lloyd Yip, founder of LWY Consulting. It was originally shared in SaaS Revolutionaries, a curated group for SaaS founders, executives, and investors that connects SaaS leaders on a global scale, fostering opportunities to learn and grow. LWY Consulting helps early-stage SaaS founders scale their solutions from <$5k MRR to $50k MRR and beyond.
This is a look back at my first startup failure, and the biggest mistake that led me to closing down – hopefully this can be a lesson for other entrepreneurs too. I admit – sharing this makes me feel a bit uncomfortable, but if it helps even one entrepreneur, it’s worth it.
The early days: when excitement became procrastination
Back when I was 22, I was working at a well-funded tech startup and advancing really fast in my career.
Whenever I had conversations with my friends, the topic of finding their dream job, getting promotions, and securing raises came up often. In fact, it came up so often, that I decided, why not become a career coach for recent grads?
And so started my first online business.
For the first couple of months, my company ran on pure excitement and coffee. I’m sure you can relate: I was super amped to figure out my offering and refine what I’d be giving my clients.
But after endlessly planning and strategizing for months, I came to a realization that I was procrastinating and putting off the one thing that really mattered. Getting clients.
Truth was, going out and finding customers scared me.
All the planning I was doing, all the content that I was working so hard on crafting, was there just so I could procrastinate and justify not going out and winning customers.
As time passed and the bank account got smaller and smaller, I realized that I was being a bit of an idiot. The urgency kicked in and I knew I had to either take action or hang up the gloves.
This mental shift actually did help quite a bit, because suddenly I had a set goal in mind.
The challenge of finding customers
The problem was that I didn’t know how to find clients. It was my first time building a business, and I didn’t have an instruction manual. All that I had were the blogs I read, podcasts I listened to, and luckily some sales experience from having done door to door.
Here’s what I tried in the first 3 months of trying to find clients:
- I built a website on wordpress and made it look really pretty
- I went to networking events and talked about my business
- I wrote blog posts and content that I shared on social media
- I made my own facebook group and tried to invite people to join
- I messaged people on Linkedin
Every week, I would try a new strategy. If it didn’t work, I would give up and move on to something new. But the thing was, my execution wasn’t planned, there was no strategy behind it, so it often didn’t work. I ended up on this crazy hamster wheel, trying something, not seeing results, wasting time, and getting discouraged.
I did manage to land a couple clients here and there, but each one came from a different tactic. Client acquisition always felt like it was out of my control and completely reliant on luck, because I never found a consistent way to win clients.
After having this drag on for a little while longer, I eventually gave up. It was giving me more anxiety than it was worth.
4 lessons from building my first startup
1) Don’t put off getting clients
My first mistake was that I spent far too much time on stuff that didn’t make an impact, while avoiding the hard, scary work that actually mattered. I would create “busy work” for myself so I could rationalize not getting clients.
If you’re a first-time founder, my advice is this: before investing ANY time and energy into stuff like making a website, getting a logo made, printing business cards… you need to have conversations with your ideal audience. You need to be sure that the problem you’re solving actually exists and is significant enough for them to spend money to fix it. Without this, you don’t have a business.
2) Experiment, but be logical about it
Once I started trying to sell, I was improvising and changing my approach every other week. Because I had no consistency, no process, and no methodical way of going after clients, I eventually burnt out.
When it comes to generating leads and clients, don’t improvise. You want to be super methodical about what growth tactics you use. Choose something that aligns with where your clients spend their time, something that you can afford, something that is consistent with what you’re selling, and something that you can actually execute with your skills!
Also, test your growth tactics in small batches. Treat it like you’re a scientist running different experiments. Try tactic #1 over the course of 2-3 weeks, and calculate how much money/time/energy it took you. Then look at how many sales opportunities it generated, deals won, and profit made. Then try with tactic #2, tactic #3, and so forth. After a few months, you can look back at all the experiments you tried out, and you can double down on what worked best. Let the evidence and data guide your decision making.
3) Be patient
Even if you’re doing everything right, results won’t magically appear after a week. You have to grind at it a bit and let things slowly materialize. Quitting on a strategy because it didn’t land you a client in the first 7 days is insane. Give it a chance to deliver the results
4) The best way to learn is by doing
Since then, I spent the last 6 years working at fast-growth startups so I could learn from founders who’d actually built and exited from cool companies. I learned a ton from them, and it’s really helped me now that I’m back to running my own business again.
Where I am now: set up for success
These lessons have served me well in my newest venture, and is definitely a big part of why I’ve been able to scale so quickly this time around. In fact, my mission now is to help new entrepreneurs understand what the roadmap to true sustainable growth looks like.
What I do now is run a consulting firm that specializes in helping B2B focused founders go from pre-revenue to $10k MRR, to $25k MRR, to $100k MRR, and beyond.
And for this business, I drank my own kool-aid. This time around, I went to market immediately and prioritized getting customer feedback. This meant that everything I built was based on the challenges that real founders were telling me they had.
I wasn’t improvising and guessing what I needed to build.
As I got more feedback, gained beta clients, and refined my offering, my entire understanding of my business improved.
I lived by the 80/20 rule, where I only executed on the things I felt were the most impactful at the time. I feel like it’s led to both faster and more sustainable growth.
My key takeaway for new founders
I truly believe you need to be problem-focused. Don’t get married to building a particular solution. Get married to solving a problem. That’s how you build stuff people truly want.For anyone who is struggling with these same problems, and wants some assistance to grow their early-stage company, let’s talk! You can reach me on my Linkedin, as well as my website where you can download a free, comprehensive guide on how to scale your high-ticket B2B business.
Saravana Kumar (Kovai): Bootstrapping a multi-product company to $10million ARR
Saravana Kumar, CEO of Kovai is this week’s guest on The SaaS Revolution Show. He joins Alex Theuma to share his experience of bootstrapping Kovai – a multi-product company – to $10 million ARR. Kovai currently employs 160 people, with offices in India and the UK. Listen on to learn: Why Kovai chose to bootstrap…
The Hottest Sessions at SaaStock LatAm Online
SaaStock LatAm Online has been planned and developed in collaboration with SaaS leaders from the region and internationally, designed to help the SaaS community of South America refocus priorities, overcome new obstacles, and help their companies gain traction, growth, and scale. We’ve hand-picked some of the hottest sessions for SaaS founders and leaders looking for…
Larry Gadea (Envoy): Building SaaS products for the post-COVID workplace
Larry Gadea, CEO and founder at Envoy is this week’s guest on The SaaS Revolution Show. He founded Envoy in 2013 to start a ‘revolution for the workplace’. Envoy is building smart tools to help offices run more smoothly – like welcoming visitors, receiving mail, and booking meeting rooms. But a global pandemic that closes…