The One Million Dollar Rule Startups Should Never Break

Geoff Wilson is an entrepreneur’s entrepreneur–a seasoned technical founder with multiple successes. That didn’t save him from losing a million dollars on a great idea. Here’s how it happened.

While he was growing 352, his up-and-coming web development shop in Gainesville, Florida, he noticed that a kid’s fantasy gaming environment, Club Penguin, was bought by Disney for $700 million. Inspired by that, he and his  team opportunistically started developing their own kid’s fantasy environment. They spent a year and a half creating a feature-rich, state-of-the art game.

Geoff  invested in development. But when he launched, there were already 200 other sites. Many of them were inferior feature-wise, but had started developing a fan base and had marketing. His game was lost in the noise. Two years later, he shut down the project. “I lost about a million dollars.”

Faster is better

He said he learned a valuable lesson.”I was right on the market. I was probably right on the concept. The timing after Club Penguin–right enough. But I was wrong on the style of execution. Developing a project for 18 months behind closed doors meant we let other companies launch ahead of us.”

Since technology and user taste move faster than your team can develop, you have to get feedback along the way, he now believes. (For more on fast development, read my recent article on The DevOps Team Behind Twitter, Uber and AirB&B.)

A few years later, Geoff’s wife, a television journalist, spotted an opportunity for a social media platform for TV newsrooms. She wanted to build it. Geoff was ready for another risk.

The minimum viable product approach

“But there was no way I was going to lose another million dollars,” he says.

He built a rough prototype of the platform, called Social News Desk (SND).  “Right away, we got a customer on it, testing it and giving us feedback,” he says. In 18 months, SND gained 85% market share in local newsrooms. Others tried to imitate them, but SND launched first and built on its lead.

In 2014, SND was sold to Graham Media Group in a nice exit.

Innovation is 99% iteration

These experiences crystallized Geoff’s approach to software product development. “Building features without customers is a recipe for failure. You want to develop the barest bones system a customer can use, and get customer feedback as soon as possible. From there, you’re developing in partnership with your customers–and that makes all the difference.”

In old thinking, the launch was critical. In this way of developing, the launch is not critical. Your second campaign is more important than your first, and your third more important than your second.

90 days from idea to outcome

“The way we develop software now, we put a small, cross-functional team a project. It’s a race to develop the essential concept as fast as possible. From there, the roadmap is customer feedback, not features we think up.”

In 90 days, his practiced team can tool an idea into a minimal, viable, scalable system. Following this approach, his development shop has grown from its start in Gainesville to open offices in Tampa and Atlanta, and to attract customers such as Microsoft, Cummins Engines and MakeMyDeal, a Cox Automotive Company.

Resources : bizangel.co

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