I started Red Swan Labs in 2018 and closed shop after 2.5 years. Since then, I have been reflecting on what led to our failure. Often, it boils down to the team and people when a startup doesn’t succeed.
After my stint as a founder (and acting PM), I joined Zomentum as a Product Manager. Looking back, it’s easy to see the traps we fell in. And, how we could have avoided it if we knew better.
Much of this article is based on personal experience, but the lessons don’t have to be.
Mistakes
1. Building a product for the wrong reasons
Why did I want to build a product then?
- Services felt unscalable, while products offered the allure of building once and earning indefinitely (My reasons for building a product had everything to do with me and nothing to do with my audience).
What would a good Product Manager tell?
- Product is not always software. It can be packaged services or a piece of content. It is just a carrier of value, that can be replicated to multiple people.
- Never start backwards from the solution – Software might not even be the correct solution for the audience.
- If you’re unfamiliar with the domain, starting with services is an effective way to identify the domain’s problems. Transitioning from services to products is challenging for a company, but it’s better than proceeding blindly.
2. Lack of customer touchpoints
We started without domain knowledge or a network.
Divide User Persona research into 2 parts: User Discovery and User Validation. We didn’t do either. Our philosophy was to develop broad features and launch, which could have worked if we had met our deadlines and launched. This strategy is effective because it grants access to early users, allowing you to build feedback loops. However, it assumes that you have the funds to sustain 6-12 months after launch without revenue while refining the product. We didn’t have that.
To comprehend this mistake, it’s important to recognize the handicaps we faced. We started with only technical skills and no marketing expertise. Consequently, we were unable to connect with the end users I was supposed to represent as the acting product manager, which led to guiding the product without direction. Although we didn’t build the wrong thing, it resulted in significant uncertainty. Uncertainty lowers performance and breeds frustration within the team. People aren’t lazy; they procrastinate when faced with uncertainty. As a manager, it’s your responsibility to minimize it.
This brings us to the next point:
3. The PM is not an idea person, but the founder is
Another problem is that PM is not an idea person. They are supposed to collect them, prioritise and validate them but not always come up with them. They are supposed to come from EMUC (Employees, Metrics, Users, Clients). However, as a founder, you are the idea person. In times like these, you should fall back on users and customers. But, we didn’t have them.
So like any resourceful person, I used sales folks as proxies of our potential users. And tried to build the product based on their suggestions. Sounds right? Wrong. Sales feedback should only be an initial step for understanding the problem, nothing more.
4. Engineering and PM
Product Managers and Engineers must collaborate closely for a product to succeed. Everyone on the team should be replaceable, and present solely because of their merits and performance. Startups are tough, and carrying dead weight for too long is unsustainable. Each week you keep a non-performing member (co-founder or not) reduces your runway.
As a PM, much responsibility falls on you. If the engineers build a buggy product, it is because your requirements were not clear enough. If QA missed them, you didn’t have good enough acceptance criteria for them to test it. As an amateur PM, I had no idea why the product was underperforming in every sense and kept shuttling between QA and Engineering. However, if an engineer doesn’t push their code, there’s little you can do. Be very very mindful of where the shortfall is happening. I empathise with you if you are blind right now, and can’t figure out why you are failing.
PM’s job is to tell the engineers what needs to happen. And not how. You’re not supposed to write their approach for them. And if you can’t trust them with it, you don’t have the right team. Managing the tech team vs. managing the product -> They are not the same. If you are doing the job of the Engineering Manager, you are not doing your own job.
5. Services and Products together
Now, all the above reasons combined, made us slow. Time killed us. We started offering services to other SaaS companies. It brought us revenue on paper but cash flow was still hard. In the meantime, the product launch seemed even more distant as services consumed our time. We should have shut down this thing an year earlier than we did.
Signals that you are on the wrong road
The next part is not really from the lens of a product manager but from a failed founder’s lens. Recognizing mistakes while you’re in the trenches is challenging, and even if you’re aware of them, avoiding them isn’t always feasible. So, how can you tell that you’re heading towards doom?
1. Making decisions from a position of weakness
As a startup founder, you need to feel powerful, energetic, and ready to take on the world. The small setbacks, when they become too often, start taking a toll on you. It’s crucial to maintain momentum. If it slows down, it will reflect in the decisions you make. This is a strong signal that things are going bad.
2. Things start affecting your lifestyle
Your confidence, motivation and performance are highly linked with your personal well-being. Your personal finances and lifestyle shouldn’t suffer.
Once you start making decisions from a position of weakness, you’ve already lost. This is particularly true in product management, where you may stop investing in open-ended projects. Innovation is often glorified, but it’s simply about empathizing with people and finding creative solutions to their problems. When you stop trying to solve problems, you lose. If you let anything come in the way of this, you lose.
Conclusion
We started at the Ideate and failed at the prototype and test stage. The foundation was missing.
The strategy was on point. The execution not so much.
I succeeded. My startup failed.
This is my closure.
Some remnants of the glorious past: