It's been almost a year since the public launch of megaventory and for the sake of it, I've been through lots of challenges and psychological ups and downs. I thought some of my experiences -from the seed idea until now- might be useful to someone that considers to launch a startup.
The seed idea
An idea can be triggered by anything. In our case the idea was born back in 2005 when looking for a way to synchronize stock levels between our suppliers and our shopping cart software. API functions were not an option simply because none of our suppliers was using any information system to control inventory; everything was on paper or in the mind of their warehouse guy. So, I went ahead and build a prototype web application but the harsh reality was that none of our suppliers was finally using it. Instead, they preferred doing business by the telephone even if that was taking much more time and created -inevitable- mistakes. This situation led the initial idea to failure (the initial idea apparently sucked) but it also led to a new idea and product redesign (started two years later in late 2007) with two things in mind: Design for dummies and build a clear product identity.
Getting to day zero
Always set deadlines. People tend to work harder towards the end of deadlines so break the time span in 3 to 4 realistic deadlines and try not to exceed them. For each one, ask the people working on the product if they are ok with it. If you get their ok they can't back off later or, if they do, you have a good excuse to bitch them. The final deadline should be the public product launch. Our deadlines went pretty much on schedule but it came out that designing for dummies was far more complex than designing for IT experts. Dummies need guidance in every part of an application, even in the most obvious parts of it. Dummies need a bug free application because they do the most weird and unthinkable operations. Dummies need the exact amount of information: Overload them and they short-circuit. On top of that we had to include product features so at least some parts of the supply chain logistics of a small business could be fulfilled (this is our product identity). And that is how we arrived in November 1st 2008 -our launch date- with a product that a) looked ok and b) didn't break upon first touch. The product identity was still not 100% there (clearly was not even 50% there) but I am a believer of the 'launch fast or die' approach. You can't get real user comments if you don't launch, you cannot debug/improve without comments from real users.
The funding
During the year we had two proposals for funding by angel investors. I do not live in the bay area but in EU, Greece, where VC funding doesn't exist, so I couldn't really turn down any proposal even if it didn't look promising. The angels were coming from my friends circle, they liked the idea, the SaaS model and the business plan and they wanted to be part of it. The problem was that they weren't actually angels but friends. On top of that, they didn't have the money on hand. Such situations usually end up in delaying the whole project until the money cashes in. Our case was worst: we finally got no cash. You can avoid that by signing some official documents but because the involved parties are friends -or family- this is obviously not a politically correct thing to do. So, beware of that, cash the money (or a big part of it) before you go into similar agreements, run away if you don't. In any case don't lose days waiting because you are a startup and you should be running against the clock. Last but not least, beware of startup events that ask you to pay upfront money to pitch and present your startup. After all you're the poor guy asking for funding. Better spend those money in advertising or product development.
The present
A year later megaventory has gone through numerous phases. We have managed -with bad marketing strategies- to subscribe more than 1000 beta users and retain around 15 active users/businesses. Among these clients there is a big one, that paid some money upfront for customization and business intelligence analytics. The money cashed in, so we had to focus on the features requested by this client. Such money can help in product development but can also drive the product identity in a different direction. This is a tough decision and it all depends on the money and opportunities that rise; maybe the product identity needs to change so as to focus on big clients instead of small ones. Always remember that the market defines the need for your product and startups don't have the resources to develop a product for two separate markets. If you ask us whether we succeed or not, we still cannot answer with a yes or no. We need, I assume, a year more to get the message. For sure, megaventory does not seem to scale as fast as anticipated in the initial business plan. We are still far from the break even point. However, we have a good clue -from the number of beta testers and our early adopters- that there is a clearly defined market space for us. So we choose to move on. After all entrepreneurship is really fun.
The seed idea
An idea can be triggered by anything. In our case the idea was born back in 2005 when looking for a way to synchronize stock levels between our suppliers and our shopping cart software. API functions were not an option simply because none of our suppliers was using any information system to control inventory; everything was on paper or in the mind of their warehouse guy. So, I went ahead and build a prototype web application but the harsh reality was that none of our suppliers was finally using it. Instead, they preferred doing business by the telephone even if that was taking much more time and created -inevitable- mistakes. This situation led the initial idea to failure (the initial idea apparently sucked) but it also led to a new idea and product redesign (started two years later in late 2007) with two things in mind: Design for dummies and build a clear product identity.
Getting to day zero
Always set deadlines. People tend to work harder towards the end of deadlines so break the time span in 3 to 4 realistic deadlines and try not to exceed them. For each one, ask the people working on the product if they are ok with it. If you get their ok they can't back off later or, if they do, you have a good excuse to bitch them. The final deadline should be the public product launch. Our deadlines went pretty much on schedule but it came out that designing for dummies was far more complex than designing for IT experts. Dummies need guidance in every part of an application, even in the most obvious parts of it. Dummies need a bug free application because they do the most weird and unthinkable operations. Dummies need the exact amount of information: Overload them and they short-circuit. On top of that we had to include product features so at least some parts of the supply chain logistics of a small business could be fulfilled (this is our product identity). And that is how we arrived in November 1st 2008 -our launch date- with a product that a) looked ok and b) didn't break upon first touch. The product identity was still not 100% there (clearly was not even 50% there) but I am a believer of the 'launch fast or die' approach. You can't get real user comments if you don't launch, you cannot debug/improve without comments from real users.
The funding
During the year we had two proposals for funding by angel investors. I do not live in the bay area but in EU, Greece, where VC funding doesn't exist, so I couldn't really turn down any proposal even if it didn't look promising. The angels were coming from my friends circle, they liked the idea, the SaaS model and the business plan and they wanted to be part of it. The problem was that they weren't actually angels but friends. On top of that, they didn't have the money on hand. Such situations usually end up in delaying the whole project until the money cashes in. Our case was worst: we finally got no cash. You can avoid that by signing some official documents but because the involved parties are friends -or family- this is obviously not a politically correct thing to do. So, beware of that, cash the money (or a big part of it) before you go into similar agreements, run away if you don't. In any case don't lose days waiting because you are a startup and you should be running against the clock. Last but not least, beware of startup events that ask you to pay upfront money to pitch and present your startup. After all you're the poor guy asking for funding. Better spend those money in advertising or product development.
The present
A year later megaventory has gone through numerous phases. We have managed -with bad marketing strategies- to subscribe more than 1000 beta users and retain around 15 active users/businesses. Among these clients there is a big one, that paid some money upfront for customization and business intelligence analytics. The money cashed in, so we had to focus on the features requested by this client. Such money can help in product development but can also drive the product identity in a different direction. This is a tough decision and it all depends on the money and opportunities that rise; maybe the product identity needs to change so as to focus on big clients instead of small ones. Always remember that the market defines the need for your product and startups don't have the resources to develop a product for two separate markets. If you ask us whether we succeed or not, we still cannot answer with a yes or no. We need, I assume, a year more to get the message. For sure, megaventory does not seem to scale as fast as anticipated in the initial business plan. We are still far from the break even point. However, we have a good clue -from the number of beta testers and our early adopters- that there is a clearly defined market space for us. So we choose to move on. After all entrepreneurship is really fun.
