What I learned from Iusify

It is very difficult to take the decision to shut down operations without there being a financial bankruptcy situation, especially, when the business metrics were growing and the feedback from various users was positive but a startup does not always fail for financial reasons.

We shut down because we blew up mentally. Things were no longer coming out and anxiety started to dominate every action we took, it was no longer just a matter of persistence.

I chose to share what I learned on this journey because although I made many mistakes, I avoided many others, reading who also failed.

I am not a Forbes or Fortune nor have I created a unicorn so do not take me as a reference just see if you recognise some situations in your business and acts before becoming irreversible.

1. Simplify

Perhaps my biggest mistake. I had a too long-vision for the product.

I knew what to do for the next five years. I had the roadmap lined up but the passing of time left me always dissatisfied with what I had at that moment and the frustration made me want more and different to get closer to my vision

So I started to complicate and wanted small parts of everything and not the whole of just one part. In an early-stage startup, this caused stress on the product that came out with flaws and unbalanced. From the outside everything looked ok, inside we held everything by ropes and lost the crucial agility in a startup.

If you believe in your project like I still believe in mine, trust me when I tell you that you will be able to implement your vision, it just takes time. Work out how to make that time last (don't quit your job), not how to make the product last.

2.? Never create a startup with investors in mind

This topic is what led me to complicate the project.

Me and Jo?o, my main co-founder and CTO, had abdicated our jobs to focus on the project, he believed in the potential of Legaltech even if with the initial reticence of an engineer and I believed we would succeed. I never had a better partner and didn't need to explain everything for him to understand what I was going to say.

As the project progressed, it was not possible to reconcile our jobs with the need to boost product development. All-in on the project.

We managed to launch the MVP and even had more than 2000 lawyers registered in 40 countries of which 500 were recurring and few were paid because the revenue model was fragile with several experience gaps.

The revenue model only followed the rule of what was quickest and easiest, in product development this is fatal. We knew what we had to change and we felt we had time, but in a startup, the same train never passes twice.

The idea was to create good metrics to impress investors and receive enough investment to stabilize operations. My co-founder was doing the work of 10 developers and I was doing the work of 5 management positions (the CTO situation was much more complicated than mine) and we needed to hire more people, with that we were able to recover and correct the previous failures.

3. Never create a product that is limited to your capabilities

Here I will distinguish product and organization and the lesson applies to both separately.

?On the product side, my co-founder was an experienced Mobile Developer with huge capabilities on mobile but not enough skills in the web languages that were needed for the technical coherence of the project.

To overcome this limitation, we tried to find a developer to join the team as a co-founder but who came, came for friendship and did not have much time because he worked for a big Portuguese startup.

Because of that, my co-founder started moving towards the web because mobile was stable.

As we don't technically master web development, our pace drops substantially and our fears increase exponentially. Stress becomes the most active player in the game. We need that technical development but we are not proficient in it. What do we do?

On the strategy side, when I was doing pitches and I pretended that it was strategic to be mobile only and although I strongly believed in the mobile experience of law practice I couldn't change the sector in such an aggressive transition.

On the product side, we gained courage and moved forward with fear but determination. The problem is that we miscalculated the development time, the inherent stress of development, and the business needs that continued to increase even though development slowed down. This change was when we burst mentally.

In terms of organization, our team of 5 people (+3 who helped sporadically) was very good, we had people with experience in large companies, in the State and even in Portuguese unicorns.

When they arrived, with their skills, they also brought great demands on the organization of processes, rules and documentation. The reason was on their side but we were unable to respond and the imbalance in the organisation started to create an imposter syndrome and the fear of being unable to respond generated insecurity.

?We needed speed and more amateur processes as we did not have one person responsible for each area of the company but several taking on different and completely different areas, and at the same time we had to keep the organisation professional and organised enough to motivate the team. It was one of the most complicated moments as a CEO not being able to combine the organization of a scaleup and an early-stage startup.

Think about it if you want people so experienced at this stage, even if they are your friends.

4. Before innovating, create the same base as your competitors.

It does not apply to all sectors but in my sector, legaltech, the red ocean is bad to dominate but fundamental to start without money. Fight the idea of being different, because, until a certain stage of growth, you have to be the opposite. If you are the same as the others, you use your competitors so that your client understands you, and you save a lot of money.

Yes, you can ask me "If we are equal, how do we sell?" I can answer that there are other ways to be better than the competition. Good marketing (with a good blog and resources), good customer support, good design and good customer engagement do not require pressure on the development team.

So at least you're in the game, still counting on luck, but in the game. After that, you create differentiation over time but the client already knows who you are.

Iusify didn't have a direct competitor, we had some similar but not equal ones that were focused on another approach and others that could adapt but not quickly. All the explanations would have to be given by us and it was an effort that we could not bear.

Even in Pitch sessions, the investors felt confused and concluded that we were megalomaniacs and rightly so. If we had been more basic I would not be writing this text. Look at most vc-backed startups and notice that most of them don't start creating markets and they're not in totally blue oceans.

5. Bootstrap but with intelligence

Avoiding investors at all costs is a cliché recommendation in the world of startups because it creates pressure on product development and delivering results however creating a startup is creating a business. An entrepreneur should enjoy living with that pressure because if he succeeds it will be daily.

If you can start bootstrapping do it but don't stretch the rope otherwise the pressure from investors on you will become from you on you and believe me, this second one is much more violent.

If you can simplify and not have exclusivity in your work you can keep making the platform until it's ready. An MVP is not only the minimum viable product, the MVP is more than that, it's the minimum product that makes the success of your business only depend on management variables like marketing and sales. If you can't sell from day one then you shouldn't quit your job

Quitting your job to develop a product is overwhelming. If you don't have good savings it's almost impossible and even with good savings it's a huge psychological pressure.

6. Technology vs Business: The internal clash where you have to make sure everybody wins

During the time we were developing the product the clash of needs is inevitable. I needed everything to happen fast, to implement my vision and strategy as fast as possible because I had to do strategic validation, generate revenue and pay expenses. Technology makes it happen but business departments make sure someone knows it happened.

The technology team required me to be calm and thoughtful which I couldn't afford to be because I was bootstrapping. I required Technology to simplify the technical standards and increase the pace.

This is an extremely difficult problem to solve because strategic simplification is not always enough.

In a perfect world or in a company already structured and running it is possible to isolate the processes and work with what you have. When you have nothing, the balance between business and technology is fundamental, if you don't do it, one of the sides will have more weight and you will urgently need to work on the other.

In our case, the Business started winning and when the Technology balanced and we found our balance point, we already had a trail of destruction complicated enough to solve with the available resources.

That's why in an early-stage startup, especially after going into production, it's impossible to manage calmly and it's not worth relying on in a fundraising strategy

7. Thanks

I don't regret having tried it. In the next project whether in a startup or a mature company, I will be much more experienced.

I created a product, I put it on the market successfully, and people liked it but as you can read it wasn't enough to scale.

?Being an entrepreneur is not just having good ideas, it's being able to endure all stages. That's why I've read and heard everything available from the founders of unicorns and dragons.

See you soon!