daily articles for founders

Running a startup in the UK (or with a UK subsidiary)? Get in touch with my company, GrantTree. We help with government funding.

What have you learnt this year?

What's the most important thing you learnt about business this year? It's always fun to ask yourself (and answer) these kinds of retrospective questions, and it also helps to settle some of that learning for the long term.

In fact, I want to encourage this so much that anyone who emails me between now and some time in the afternoon of 31st December with a link to their blog post answering this question directly (i.e. not a blog post from a year ago, but one you just wrote) will be linked from this site, as one of the "linked posts" that I often include. I don't care how basic the blog looks - even if you start a new blog to write out that answer, that's fine. Answer the question and you get a link. The best ones will go into the Founder's Library.

So, with that out of the way, what's my lesson learnt for the year?

My lesson: First, find something that works

I'm very happy to report that I've had a very good year, business-wise. In fact, both the businesses I'm involved in have started to generate tangible revenues, the kind which you can not only live on but also grow a business on. It's a great feeling. From this comes a lesson which is going to sound shockingly obvious, especially in the context of all the Lean Startup talk that's the flavour of the moment, but which does represent what I think is the most important lesson I learnt this year.

Both GrantTree and Woobius have achieved these successes by finding a business model that worked and then focusing their energies on it. In the case of GrantTree, it's raising funding for tech companies via tax credits and grants. In the case of Woobius, it's building awesome mobile apps for the construction industry. Neither of those are terribly disruptive products, but they work - they make money.

In contrast, for years before I felt like I was pedalling empty. It's very demotivating to work on a product that could be awesome and should be awesome and wants to be awesome - and maybe even is awesome - but isn't really growing at anywhere near the rate you'd expect.

There's something about finding a business model that actually works and generates revenues, and then pushing that through and growing it, which is exhilarating and rewarding on an emotional as well as a financial level. You also tend to learn a tremendous amounts of stuff that simply isn't relevant to a cash-strapped startup with an ever-shrinking runway.

The lean methodologies and customer development all preach exploring the market and finding a scalable business model alongside or even before putting too much effort building a startup's product. My lesson for the year is a visceral understanding of the difference between pre-product-market-fit and post-product-market-fit. You really can't miss it. It's a whole different ball game.

It makes such a difference, that it really is worth following a lean methodology (such as Hypothesis Driven Development) to make sure that you are as close as possible to finding that fit before putting any large amounts of effort into building stuff. Building something that just doesn't seem to find its market for years is just too demoralising to be worth it.

Do your homework: figure out what your customers want, and even sell it to them, before you build it.

More from the library:
Transparency in startups
Phantom user profiles for non-registered users
What have you done wrong?