The answers below are provided by members of FounderSociety, an invitation-only organization comprised of ambitious startup founders and business owners.
Before there was Yelp, there was CitySearch. It was a similar concept and was the go-to site for finding places around the city. But just as quickly as it rose, it declined. It stopped innovating and updates to the site were slow. From the outside, it seemed as if hubris and failing to innovate killed them. The lesson learned for me is when you stop innovating, your company fades away.
As the founder of a rapidly growing food startup, I’m constantly tempted to grow into every geographical region possible. But, after studying the failure of Webvan (and the challenges that even more recent startups like GoodEggs are facing as it expands geographically), I’ve decided to concentrate our efforts on going deep into each region as opposed to going wide.
The inception of an idea may come from feelings of scarcity. Formulations for that idea may be influenced by insecurity. Fear of not having enough in life may lead you to want more for the wrong reasons, and fear may push you to make nearsighted decisions. “Babysitting fear” means you both endorse, soothe and are manipulated by it; which in business, leads to failure.
The one that sticks out in my mind is Blockbuster. They were cruising along and were even opening new stores as the world around them was changing rapidly. Then, boom! They were gone seemingly overnight. That really opened my eyes that you need to keep the future in mind and keep tabs on the marketplace. At the time, it was the first one I saw ignore trends like they had blinders on.
There’s this concept that you must be willing to cannibalize your current business, building the new model that will destroy your current one. Kodak is the poster child for that. They famously had the patent for the digital camera, and they were doing so well in the film business that they let the opportunity to reinvent slip by — and others took it.
From Style for Hire, I learned how to compensate the suppliers of my product (personal styling) to retain talent. You need to test out different iterations of how to compensate your sales people in order to make your compensation plan attractive, long-term and scalable. After small tweaks to a compensation plan, we learned that we had to pivot our business model to fully develop a long-term solution.
What caused Western Union Telegraph Company and many others to miss out on millions? Bad marketing? Failure to dream? Poor opt-in pages? Nah, it’s much simpler (and pathetic): egos. The president of the company said there would be no use for the telephone, so he turned down the chance to buy the “electric toys” patent for $100,000. Really, he didn’t want it because he didn’t think of it.
FounderSociety is an invitation-only organization comprised of ambitious founders and business owners.