An Entrepreneur’s Key Assumption…I am wrong

One of the first lessons I learned (the hard way) as an entrepreneur is that your brilliant idea, that you spend so much time refining, is most likely wrong.  More bluntly, it is a waste of time trying to get it right before you launch.  The better approach is to put out several hypotheses and let the market tell you which is right.

In my opinion, the key to entrepreneurship is planning to be wrong, learning from it and adjusting quickly.  The goal of a founder is to get the direction right, set up a learning culture and process and let the market tell you the best path to achieve your objective.  This was crystallized by something that a co-founder of Quantcast, Paul Sutter, once told me.  He said [and i paraphrase] “don’t waste any time trying to figure out which implementation is right, just put them both out and see which gets a better response from customers.”  I.e. A/B test it and let the data decide.  This is brilliant and was an epiphany for me.  It actually creates freedom.  And such a more efficient way to run a business.  When I worked for big companies, I remember spending considerable time debating minutia at the cost of launching the product in market.  Ugg…painful.  I won’t make that mistake with my new company…I promise.

note, this only works for a business with low fixed cost associated with trying new products/versions.

V1 Again: Diary of an Entrepreneur

I am starting a new company.  We will launch our product in a few weeks.  This blog is dedicated to entrepreneurship and my experiences starting a company.

Discussions:

I will share the ups and downs of starting a company.  The lessons learned, the hard decisions, the tough questions that entrepreneurs face.  I learned so many things the first time around. So many amazing experiences and lessons.  I wanted to create a forum where fellow entrepreneurs (and those interested) can openly share thoughts.  I have found through experience that business challenges (and mistakes) are consistent across industries or models.  So I think that it is valuable to openly share thoughts and gain input.

It is my sincere hope that you enjoy (and add to) the discussion.  We welcome guest-posts, feedback and retweets.

My Entrepreneurial Background:

While technically this is my third start-up, really it is my second start-up.  The first time didn’t really get off the ground. Mostly just a business plan and some guys having fun in 1999.  By the time that we got going, the market crashed and we never actually left our jobs or launched the site, so I don’t count it as a start-up (although I learned a lot from it).

My first real start-up was a company called BuyYourFriendADrink (“BYFAD”). We were early to launch facebook and mobile apps that let people buy friends real drinks in real bars.  Our focus was really trying to figure out online-to-offline commerce leveraging social media.

BYFAD launched in April 2007 and we spent much of that year beta testing and figuring out our model.  During 2007, we came to realize that we needed to pivot from a pure C2C business to focus on a B2C platform that liquor companies could use.  We signed a bunch of deals in the first half of 2008 (Belvedere, Diageo, Coors, Hornitos, Bacardi, Moet, St. Germain and others), and we were feeling pretty good about ourselves.  Were were out raising a growth round when “the Great Recession” hit.  We were woefully under-funded at that point, and unable to raise capital to continue as an independent entity.  But we had proven enough to convince a great partner, LivingSocial, to buy our company.  They were uber focused on online to offline commerce and we fit perfectly into their strategy.  Together, the BYFAD and LS teams expanded the model beyond drinks, which took off beyond expectations.  They are simply crushing it right now.  Go LivingSocial…Go!

After I left LivingSocial, I went to another great early stage growth company called Quantcast, which is leading the push into audience targeting.  It has been a great experience and I have learned a lot from the amazing entrepreneurs who started it and the team building it.  But the call to being an entrepreneur again was too strong.  While I really enjoyed working for Quantcast, I just love being an entrepreneur.

So here I go again.  This is going to be another fun ride.  I hope you enjoy it too.

Best,

Steven

@spcohn