Startup - story without happy ending

Hi Steemit, 

Recently I have started blogging on Steemit. These are my first steps in this universe, therefore I would like to share with you interesting story regarding building my startup.  

Let’s start from the beginning.  

Problem

In late 2012 when I tried to find some new shoes for winter season I found out some difficulties: 

• I needed to visit two or three shops from the same brand before I bought my shoes (due to lack of size or colour).  
• It was hard to find information where located are shops. In that time we had only normal web pages without RWD - checking  something on such pages using browser on smartphone was let say a little bit inconvenient. Mobility in 2012 was not like we have right now, where data package from telecoms are cheap and pages are RWD. 
• Each time when I went from one shops centre to another, it took me a lot of time. 

Market Research

That time I wondered if we could get better experience in shopping and have possibility to consume information from fashion brands more easily. 

On the beginning of 2013 year I did research and I collected interesting data for local and international markets.  

I found information regarding Users behaviour and trends.  

Let me bring some of them: 

• from 148 fashion brands which I analysed, only 22 had native mobile application (22 iOS, 13 Android, 3 Windows Phone, some of them were available in more then one platform) 

• In Poland in 2012 m-commerce market increased about 722% compared to year 2011 (according to Zanox Mobile Performance Barometer) 
• From report IAB Mobile 2012 I got data that: 
  • 94% users of smartphones use ads during shopping
  • 77% of that users use social media for it
  • 16% users are interesting in buying fashion products using via mobile devices

Idea - your fashion world in your pocket

After few weeks I drew basic concept for the all-in-one solution which include B2B (like fashion brands, shopping malls, fashion magazines) and B2C models. In case of the first model I assumed that I my target would be fashion brands, shopping malls, magazines and bloggers. For the second one, I had in mind users who love fashion, shopping, take active part in creating fashion community and build trends, find quickly products and promotions. 

Here is list of some of the functionality for shopping assistant:

• easy and quick access to fashion brands with products catalogue 
• list of bonuses  
• access to events and articles regarding fashion 
• map with shops and practical navigation 
• possibility to write review for fashion products and take active part in creating trends  
• access to list of top products with highest rating 
• get notification when your favourite products are available in shop or have specific discounts 
• virtual wardrobe with your products  
• share with Friends your recent products via social media
• based on the User behaviour and likes get access to recommendation products (find new brands which you potentially like) 
• integrated digital gift cards mechanism  
• wishlist  

For fashion brands I planned to offer: 

• another digital channel to reach fans (notification) and potential new clients  
• get data regarding Customers trends and behaviour (when they are visiting shop - use for it iBeacon devices like Estimote or Kontakt.io)  
• use sophisticated targeting ads to increase conversion and profits 
• reduce costs on managing own mobile solution 

Team

Every project requires great Team, so I started looking for developers who could be a part of rising startup. I found that few of my friends are interested in developing this product.  

Our Team contained  

• full stack developer 
• iOS developer 
• Android developer 
• Window Mobile developer 
• PM / Sales / Founder  

Every one has few years of experience in working in enterprise, so we know how could we build it and make it work. I did not see that time that I was very wrong.  

Business Model

Based on the book from Alexander Osterwalder Business Model Generation I created model and I forecasted income.  

I was really excited because I assumed that income in first 12 months should reach about +1,6 mln zl (400k$). Next years should bring to the bank account even higher income.  

Venture Capitals 

I sent few teasers (product description) to Venture Capitals in Poland. Feedback from them was usually negative due to lack of believing that we are able to convince brands to join our platform.
 

During one of the meeting with VC I got quick response that project is very complex and it will be hard to realise it. Some of the board members did not see value in this product. They did not agree that it could generate so much money. Additionally they were surprised that I evaluated startup for 5 mln zl (more than 1mln $) even if I did not have any clients, users and MVP of product. I did not know how my understanding about business that time was bad.

8 Startup Lessons Learned
I would like to share with you what I learnt after my startup fell like stone from the sky to the ground and disappeared.  

1. Start small instead of big.Think about your MVP. I started with developing application for all available and popular systems like iOS, Android and Windows Phone. It would be better to complete MVP of one application for one platform and validate idea quicker, then work of all applications in the same time. Additional benefit behind it is Team size. If you decide to do first iOS application, you do not need Android and Windows Phone developers. In such case your are spending less money. You have more time to find the right features for your Users and Clients. Another point related to starting small is that I wanted to build enterprise clone. At the beginning you should develop product without fancy office, sophisticated project management tools or expensive hardware.
2. You should not start business with believing that your idea is perfect and everyone will understand it, especially in VCs environment where are experts. 
3. Do not try to calculate and forecast income for 3-5 years in front because it is waste of time and not wise even if some of the VCs require it. World is very dynamic, it is better to spend your time on developing MVP product. 
4. Maybe this is obvious but If you do not have Clients, Users and you have half of MVP, your startup is worth nothing.
5. Startup idea is 10% of success, motivated Team and hard work is the rest. 
6. Go outside and talk with potential Clients and Users. You should not think that if you share information about the product, somebody will steal it and make money instead of you. It is crucial to get feedback from Clients, Users and Friends in earlier stages because this product will be used by them not only by you or Team. 
7. In case of the Team, you should focus more on finding right People who are passionate about the product the same like you. They want to change world. If somebody from the Team do not like idea but wants only to help you in developing product, in hard times he will quit because he does not have the same motivation like you. Therefore is important to hire right People. Sometime ago I read article that if you are building Team you should “hire slow but fire fast”. I fully agree with this statement. 
8. You should not stop working on the product when a lot of the VCs reject your solution or friends told you that it is disaster product. You should do opposite, continue hard work and proof them all that they were very wrong. 

 
Resources
If you would like to reduce probability of failure and avoid some basic problems I suggest at start to get familiar with: 

• Stanford classes - How to start a startup - http://startupclass.samaltman.com 
• Business Model Generation - Alexander Osterwalder Yves Pigneur  
• The 100$ Startup - Chris Guillebeau - The Lean Startup - Eric Ries 
• The Startup Owner's Manual - Steve Blank 
• Lean Customer Development - Build Products Your Customers Will Buy - Cindy Alvarez 

My history of startup would be different if I had knowledge which I have today.  

Please do not make similar mistakes which I did. 

Thanks.