I was ready. To rest my entrepreneur hat. I spent years building what I thought was shaping up to be a fashion e-commerce giant for the Indian marketplace. We raised $4 million in pre-Series A funding, led an additional round and have seen four years of strong growth.
However, at the end of these four years, we swallowed the pill and closed the startup, for reasons we will explain shortly.
An unexpected and positive one was born out of this experience. I started another startup and called it Bootstra, because this time I had a stronger crutch – what I learned from my first failed venture. Today, Squadhelp – my second venture – is the world’s largest recruitment platform.
Here are some lessons I’ve learned that I believe will help any entrepreneur succeed:
Delay fundraising until you have a solid initial offering that has demonstrated some success in creating happy customers with profitable marketing.
Initial funding can provide a false sense of security.
With my first venture, Fashionara, with strong pre-stage funding, our leadership and marketing team were overconfident. Our thinking was that funding was our golden ticket. With a strong team and money in the bank, we got what we wanted. But the reality was the opposite.
We stopped focusing on the cost of a single purchase, and instead focused on increasing our month-to-month revenue. Once these numbers are solid, we focus on critical startup success factors, especially creating differentiated experiences for new customers, which can differentiate us from our competition and increase customer loyalty.
On the other hand, launching my second startup has forced me to be laser-focused. For example, our development team performs critical tasks such as creating differentiation and ensuring customer satisfaction. And, we regularly review our marketing efforts to ensure that our spend goes into channels and strategies that sustainably bring customers.
When we get a strong return on ad spend (ROAS), we measure spend and cut costs that aren’t driving customers at the right cost. We even have trading strategies that we use only when the market is strong. Conversely, when our business declines seasonally or for economic reasons, we may reduce transaction costs to maintain our financial health.
I recommend that any startup delay fundraising until you have a strong initial offering that has demonstrated some success in generating happy customers through profitable marketing. .
Map your product to customer satisfaction
I’ve learned that customer feedback can have a huge impact on your business plan. In my second startup, we have daily meetings to follow up on feedback from our customers. We then prioritize changes to our product, customer service and marketing each week based on this feedback.
