For those who don’t know - though I’m pretty crazy proud of it, so I’m not sure how you wouldn’t - I’m from the midwest; Minnesota, to be precise. 

You know what that tends to mean?  It means I don’t give a hoot about your newest social aggregator.  It means I tend to take apps OFF my phone faster than I put them on it.  It means I don’t understand why we need TypePad, Tumblr, and Wordpress, nor do I really care. And hundreds of the startups I see every day just don’t understand that at all. 

Now, I am a huge proponent of building for yourself, first.  If you are not using your product - if you don’t care about it or think “well, I’m just not the target market” - you are probably going to fail.  But just because you do care doesn’t mean I do.  Here are some tips for consumer startups to better reach the vast “MidWestern” audience:

• Do you make a regular task take less time or cost less money? (Note I am more specific than just “easier”)  Can I save money at my favorite restaurant?  Can I avoid traffic?  Can I dictate notes while driving?  Think about how your app is improving my lifestyle in a measurable way.  If it’s some wishy-washy thing like “easier” - I probably won’t buy it.

• Can I show how unique/special I am without having to rediscover my entire social network?  Can I show my facebook friends that I actually discovered something first?  Can I tell my twitter followers what my holiday gift list is?  Help me connect in very specific ways with the networks I’ve already created - don’t ask me to create a new one.  (Very Specific = an app like FoodSpotting where I know to spot food specifically will generally do better than an app like Oink, where I don’t have a clear goal)

• Does it reduce the amount of activities I need to complete? If I need to find your app, download it, open it, search for something, take a picture, upload it, connect to where I want to share it….you get the picture.  That’s junk and I’ll get rid of it right away.  Make sure your product is reducing the number of steps I need to finish a task, not adding to it.

And of course, remember that consumers are fickle creatures; don’t go listening to me, listen to them.  Then decide for yourself whether to apply what you hear - even we don’t always know what we want.

I’ve been producing FailCon for three years, with the 4th event coming up on October 24th.  Needless to say, I’ve heard about a lot of startup failures - both on stage, and off.  And while there are as many reasons a startup can fail as there are startups out there, one story seems to come up over and over.  Now, the Startup Genome Project’s data suggests that most startups fail due to Premature Scaling.  I’m sure that’s correct (and you should definitely read their findings right when you finish this), but my anecdotal evidence suggests another more common problem, that perhaps destroys companies before they even got onto the report’s radar:

INAPPROPRIATE EARLY TEAM

This is far and above the number one failure I hear about: companies crumble due to poor communication and negative relationships between the early team.  While you should look for a variety of skills (you don’t need 3 Biz Dev guys…), more often founders make the mistake of hiring people either too close or too far from themselves:

FRIENDS: Founders hire friends, or at least people a lot like them.  They figure that disagreements will be lessened and progress improved if everyone just agrees and comes from a similar background.  It’s also a lot easier; these are the people you already interact with, the pool of talent you can most easily draw from.  Well it’s a bad idea.  Feedback gets taken personally, feelings are spared rather than honest criticism given, and problems don’t get the variety of perspectives they need to have the best solutions.  And if you plan to build a product that’s going to scale to anyone even remotely different from yourself (and if you want to be successful, it probably has to), you’ll need a wide variety of early partners and employees to better understand those users. 

And really, do NOT hire people you can’t fire.

OUTSOURCE: Founders outsource the backend of the product, since it’s quick and affordable.  This isn’t the end of the world if it’s a one time thing just to get a prototype in front of investors, but you better realize it will need to be rebuilt from the ground up once you need a scalable, clean, functioning product.  Don’t get me wrong, I’m not saying all outsourced work is terrible, it’s just usually not very scalable, it’s hard to communicate needs, and it can be difficult to change the code while keeping it simple later.  Your CTO really can not be a team in {insert foreign country here}.  There is a time for outsourcing - building your launch product is NOT it.

So I know it’s tempting, once you have that million-dollar idea, to just dive into it with whomever you can as soon as you can.  But ideas are a dime a dozen nowadays; it’s the team that defines how that idea gets implemented.  Take time to go out and meet new people, network with a variety of communities, and be ready to leap when the right person comes along.  

Have you ever heard poker professionals say something like “stop thinking about the money in the pot; consider it gone.”  This is in reference to debating whether to stay in a game by thinking about how much you’ve already invested.  All it does is cause a player to get too attached to their hand, to determined not to give up without knowing what the other person has.  Inevitably, it leads to careless play.

Time spent on features in your startup should be considered the exact same way.  Total War developer Creative Assembly discusses how they are often willing to cut features even 90% into development if they realize it just isn’t working in user tests.  Every startup founder should apply similar practices (it’s also why you should be user testing regularly).

Early on, you and your team are going to be excited about dozens of your features.  You’re going to talk to users and focus on the features you think are best.  A week or few might go into building these when you go back and re-test, only to realize users just don’t seem to connect with them at all.  You’ve got a serious choice now: keep working with some new tweaks, or scrap the feature entirely.  Most founders will look back on the time spent and say “you know what, let’s just finish it.  Then we at least have it.”  They are looking at that money in the pot and using it to judge big decisions for their company.

This is one of those habits that seems harmless early on, but will destroy your company down the road.  It creates an atmosphere driven by completion, rather than value, which can only lead to failure.  Stop looking at time spent on a feature; focus only what the information now tells you and the best way to move forward.

Alright, well not necessarily.  The wrong co-founder, someone you don’t communicate well with, whose skills don’t balance your own, or who has a totally different idea for your product or user is guaranteed to lead you to failure.  But not being able to find a cofounder, especially as a first time entrepreneur, makes failure nearly as certain.  If you can’t find one person passionate enough about your idea to dedicate some of their time and expertise to it, how do you expect to get investors and customers to dedicate their money?

A {good, pretend that’s written from here on out} cofounder is the first of many checks and balances when starting you company.  A cofounder helps insure you consider a variety of perspectives and analyze a wider range of risks.  A cofounder allows you to do what you are best at (be it business, design, development, or any number of talents) and not be bogged down by something you aren’t.  And a cofounder doubles the number of people evangelizing your product in the world.

This is not to say that not having a cofounder should stagnate you.  Quite the opposite.  If you have an idea, start to build it however you can - mock it up in Balsamiq or Photoshop if you can’t code, keep it chunky and black and white if you can’t design.  But now use that prototype to go out and recruit people to make it better.  

Cofounders not only make the product stronger, they make the process stronger.  You’ll need people to rely on when the times get tough, and they will get tough.  You’ll need someone to share ideas with to keep you excited and motivated.  You’ll need the support that non-entrepreneurial friends and family just don’t know how to offer.  You’ll even need the debates and bickering to insure that you feel good about the final product, to know you both challenged the idea and found a solid solution.

So if this is your first startup especially, find a cofounder.  Not being able to secure even that is a sure sign that more failures are waiting down the road.

{Image from FailCon 2011.  Even starting FailCon, I first sought a co-producer, Diane Loviglio}

This is perhaps one of the most common mistakes I see made when I chat with early stage founders at events like SF Beta, Hackers & Founders, or SF NewTech.  And it starts with one key mistake: founders walk up and pitch me a product.  Period.  That’s it.  They don’t ask “what are you interested in?” or “what problems do you have with your work?” or “what are some of your favorite startups here?”  Nope, nothing to get a sense of who I am or what I need.  They just pitch a product to me and assume it’s so cool I’ll have to use it.  And that’s because they’ve been building for the product, not for the user.

It sounds obvious when you write it, but it’s actually a surprisingly easy mindset to begin to fall into.  I recently attended a LUXr workshop on Early User Experience Design and was initially a little disappointed we weren’t diving into the process of designing a clean website, a clear user flow, and an engaging product.  And there it started - I wanted to design for a product, not for a user.  Instead, the seminar focused on defining your user, interacting with them, identifying their problem, and determining the 1 - 3 features a product might need to solve that: THAT is design.

And don’t go trying to fool yourself saying “oh, but I know the users that will use my product.”  Do you really?  Or did you find people with the problem your product solves, and assume it must be the right solution after the fact?

This is also why many of the most successful products we hear about - Basecamp, Twitter, Mint (kind of - built while the founder was trying to balance his books from another job), and some of the most exciting ones I’ve recently learned about - Firebase and Vidcaster - are 3rd or 4th ideas from the company.  In each of those cases, the founders built a product they thought was cool, found a way to make their work on that product easier, built that, and then realized that had significantly more potential - the product that was built out of a user need.

So before you spend one more minute of your time on your product, take 1-2 hours with your team and think about your users.  Go out on the streets and find them and talk with them.  Do NOT ask them about your product; ask them about their problems, the solutions they currently have, and whether it’s even a big deal to them.  Then go back and whenever the team discusses a new feature or a design change, ask yourself “would that woman I spoke to really use that?”  I guarantee you’ll overcome one of the first places hundreds of startups fail.

{Photo from FailCon 2011, of CardFlick founder showing off their product - they were the audience choice winner, so clearly onto a good USER experience}

I recently sat in on a post-mortem presentation at GDC by Luke Muscat of Halfbrick games, the creator of Fruit Ninja and Jetpack Joyride.  While he discussed dozens of ingenious tidbits on how to keep people feeling challenged, spending money, and generally having a good time, one thing stood out as especially relevant to us: Jetpack Joyride is designed to make the player fail. Over. And Over. And Over.  In fact, it relies on the user not only failing but enjoying it so much that they stick around and share it with friends.  With millions of downloads, clearly it’s working.

So just how have they made inevitable failure so fun, and what can the rest of us learn from this?

Reward Failure:  In Jetpack Joyride, with your ultimate death comes an immediate reward screen recognizing your progress, any mission goals you accomplished, and offering you a slot machine chance for any coin you picked up.  This can be pretty easily practiced with yourself and employees, too.  When encountering a failure (either personal or amongst employees), focus less on the problem that happened and more on what risks were taken, what was learned, and how this is going to improve the process down the road.  Keep yourself and the team feeling engaged with the organization, and show that each failure does contribute to the final product.  Make it very clear that taking well-informed, relevant risks is a good thing.

Always Have A Next Step: Immediately after exploding, Joyride shows you what your current missions are, to remind you that there is still more to get done.  This is by far the most important take-away for business leaders.  The quickest way to recover from a personal failure is to know what the next step is.  Before taking a big risk, set up a contingency plan: know exactly what things might help in a recovery, and have a short and easy to-do list on the side.  That way, when failure rears it’s ugly head, you can smile and nod and turn your attentions immediately to the next step, without having to worry about getting stuck in a rut.

Reduce the Barrier To Retry:  Joyride is a quick game with a one-tap ability to replay after failing.  Make failing that easy in your organization.  Use the Next Steps tips to always have a way for people to start again.  More important, make sure no one is dwelling on the failure.  The worst thing you can do is hold it against someone, having a three-strikes rule or anything like that.  This will make each re-entry more frightening.  Discuss what happened promptly, incorporate the lessons, and then move on to something new.

Most people design a business for success; it keeps everyone positive and envisioning a clear final goal.  But businesses rarely reach the first goal they sit; dozens of road blocks come up along the way, and you need to be able to recover and pivot quickly.  While you should keep strong goals in your mind, designing for failures - making them manageable and recoverable - is safer and more realistic for yourself and your company.

I wanted to share a piece of advice I received/developed with a friend and associate Dale Larson (http://startuphappiness.com - check them out. They are awesome.)

During job interviews, the dreaded question “what is your biggest weakness” is now a given; in fact, it’s weird when you don’t get it.  But applicants so often fail to ask what I realized would be a great follow-up to the company: “How would you handle that?” or what we are really trying to get at: “How do you handle an employee failure?”

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It was a packed house for the launch of the 2012 FailChat series.  These are more intimate and engaging events based on our successful conference, FailCon.  On February 22, a sold out crowd gathered at Citizen Space to learn how you can survive withOUT raising stacks of cash.  A panel of experts discussed organic growth, the power PR, crowdsourcing, and personal investments while the crowd raised questions on how to avoid common mistakes and navigate funding.  The next FailChat will take place in April.

Citizen Space was kind enough to capture some video of the panel HERE

Some of our favorite advice of the night:

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Failcon 2011 attracted more than 500 founders and investors to this year’s conference, and was proud to feature demo’s from 11 local startups. CardFlick, LetsListen, and Repost.us were voted “Most Likely To Succeed” by the audience.

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