i was ready to put my entrepreneurial cap to rest. I had spent years building what I thought would become a fashion e-commerce giant for the Indian market. We had raised $4 million pre-Series A funding, led additional rounds, and seen four years of solid growth.
But at the end of these four years, we went off the pill and shut down the startup for reasons I’ll explain shortly.
However, from this experience something unexpected and positive was born. I launched another startup and started it up because this time I had a strong crutch – the lessons of my first failed venture. Today, Squadhelp – my second company – is the world’s largest naming platform.
Here are the lessons I’ve learned that I think can help any entrepreneur succeed:
Delay fundraising until you have a strong initial offering that has shown some success in creating satisfied customers with profitable marketing.
Early financing can give a false sense of security
With solid early-stage funding from Fashionara, my first venture, our leadership and marketing team became overconfident. Our mindset was that funding was our golden ticket. With a strong team and money in the bank, we had what we needed. But the reality was just the opposite.
We no longer focused on cost per acquisition and focused instead on increasing our monthly acquisition numbers. Once these numbers were strong, we focused less on key startup success factors, especially creating differentiated experiences for new customers, which could have set us apart from our competition and increased customer loyalty.
On the other hand, starting 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 to channels and strategies that sustainably bring in customers.
We also scale up spend when we achieve a high return on ad spend (ROAS) and reduce or eliminate spend that customers aren’t generating at the right cost. We even have marketing strategies that we only use when the market is strong. Conversely, when our business slows down seasonally or due to economic factors, we can cut back on marketing spend to keep our finances healthy.
I would advise any startup to delay fundraising until you have a strong initial offering that has shown some success in creating satisfied customers with profitable marketing, and you can strongly believe that more capital would allow you to scaling in specific, predefined areas .
Let customer satisfaction determine your product roadmap
I’ve learned that customer feedback should significantly influence your business plan. At my second startup, we have daily meetings to discuss feedback from our customers. Based on this feedback, we then prioritize and implement changes to our product, customer service and even our marketing on a weekly basis.