Failure to Launch

Almost 10 years ago I was living one of my dreams - doing another software startup. During the 90's I founded and sold two companies, the last being Netoria that was sold to Novell in 1999. So I took the plunge and founded Majura as a mobile security company in the rapidly exploding mobile device marketplace. After about six months I ceased all activity and put Majura to rest.

Failure is a part of life and an outcome that every entrepreneur must face - but something we don't like to discuss. Without an open discussion and analysis of failure there cannot be learning and growth.

So what happened?

The fundamental reason for the failure of Majura was lack of what Steve Blank calls "customer development" and what other people call "discovery". We simply were not close enough to enough potential customers to validate our solution. In particular we needed more information on:

• The exact problem we were solving
• Who would be the buyer
• How much they would pay
• Whether they would buy the solution from a startup

Yes, we did speak to potential customers, and we did get very positive feedback, but only THREE of them. We really should have had feedback from 10+ potential customers.

The lack of close and continual customer feedback also prevented us from realizing early that we were likely biting off more than we could chew - our solution made sense, but would have taken far too long to implement and get right. Nobody has unlimited resources, and early startups in particular have extremely limited capability. There must be a realistic match of capabilities versus customer needs.

We also spoke to investors far too early, even before our prototype was functional. While everyone agreed the space we were in was exploding, the lack of actual customers and a running prototype/solution really made everyone uncomfortable. After all, they can invest in a businesses that has already launched, with real customers and (maybe) revenue.

The ultimate validation of your idea is that a customer sees enough value to pay. Until customers buy and use your solution everything is just a hypothesis.

So what would I do differently? 

1. Get close to at least 10 potential customers, and preferably more. Really understand their routine, problems they face, and what they would pay.
2. Find the Minimum Viable Product. Start out with a simple enough problem that matches the capabilities of the startup. Get in the market and iterate quickly to a more valuable solution.
3. Don't go to investors without marketplace validation.

Netoria's initial product was only 50 or so lines of code, but it's rapid uptake in the market allowed us to quickly improve and move the product into other areas - and upon acquisition we had over 1 million enterprise seats installed of four products. We solved a simple, but important problem that got us to the market and delivered customer validation and valuable input on other problems to solve.

During the Majura time I learnt a lot about myself and had a fantastic six months. For the experiences and lessons I am profoundly grateful - these have helped me throughout the last 10 years of my career.