Dan Martell - The Top 7 Mistakes First Time Software Founders Make

00:00:00.200 The top seven mistakes that great founders make,

00:00:03.520 not true, redoing it.

00:00:16.040 Top seven mistakes that founders make.

00:00:18.360 In today's video, I'm gonna share with you guys

00:00:19.880 how to avoid wasting resources.

00:00:21.840 If you've been building your company

00:00:23.280 and you've made a couple pitfalls,

00:00:24.960 I'm gonna walk you through the seven most common

00:00:27.440 that I've seen people make over and over again.

00:00:29.720 Because at the end of the day, you don't have unlimited time,

00:00:32.420 money, or your resources on your team.

00:00:34.860 So I'm gonna walk you through the areas

00:00:36.220 you're probably spending to avoid making these mistakes.

00:00:39.560 Now, I've done over 1300 calls, you know,

00:00:42.360 just through Clarity, and I've spoken at events,

00:00:44.740 and I've advised a bunch of different entrepreneurs

00:00:46.940 on how to grow their business.

00:00:48.840 And I've seen the patterns,

00:00:50.580 and these patterns come up over and over again.

00:00:52.780 I've extracted the top seven to share with you in this video.

00:00:55.480 Just last week, actually, an entrepreneur named Fred

00:00:57.940 reached out to me with this SEO product

00:00:59.680 that he built and he was like,

00:01:00.980 hey Dan, I'm having a hard time finding traction

00:01:03.260 and I realized he'd made two of the mistakes

00:01:05.320 I'm gonna share with you guys today

00:01:06.860 and just walking him through that,

00:01:08.180 he was like, oh, I know.

00:01:09.660 So that's why I'm creating this video for you to learn.

00:01:12.260 The number one is starting with a freemium product

00:01:15.160 and here's why.

00:01:16.000 Free means I'm gonna let people use this for free

00:01:18.740 in exchange for advice, that's the argument usually,

00:01:20.960 and eventually some people will upgrade to a paid plan.

00:01:23.540 Here's why that doesn't work is the advice you get

00:01:26.200 from free users do not directly correlate

00:01:28.840 to ones that are gonna pay.

00:01:30.340 So what I would suggest is instead start with the paid

00:01:34.040 version or the premium version of the free

00:01:36.320 and then use free as a marketing decision.

00:01:38.780 So that's number one.

00:01:39.620 Two is have multiple ideas.

00:01:42.660 And that's cool, in the early days if you're testing,

00:01:44.960 I'm game with that.

00:01:45.800 You have two, three different ideas,

00:01:47.220 two week iteration test, totally cool.

00:01:49.700 What I have a problem with is when I meet an entrepreneur

00:01:52.360 and they're like, well I've got these two businesses.

00:01:54.140 To me, having two businesses is trying to use the toilet

00:01:57.100 on two separate toilets at the exact same time.

00:01:59.020 Yes, I gave you that visual.

00:02:00.920 Because you need to understand that you can't be doing that.

00:02:03.940 It's possible, but it's super messy.

00:02:06.080 So you're better off picking one and going deep

00:02:08.240 until at some point you learn that maybe

00:02:10.220 that's not the right idea.

00:02:11.340 But pick one idea and go forward with it.

00:02:13.740 So that's number two.

00:02:14.580 Three is you don't solve a problem.

00:02:16.560 You have something that's cool.

00:02:18.180 Some people use it, they like it.

00:02:20.300 But it's not a pain killer, it's more of a vitamin.

00:02:23.100 And just think about that concept.

00:02:24.540 It's a nice to have, not a must have.

00:02:27.680 And to me, the best companies out there

00:02:29.820 are solving real pains in the market.

00:02:32.520 So make sure that you're actually doing that,

00:02:34.080 not just building something that's nice and kinda cool,

00:02:37.520 but not really gonna solve a major problem.

00:02:39.480 So that's number three.

00:02:40.320 Four is you go wide instead of focused, okay?

00:02:43.520 So when I meet entrepreneurs and they're building a tool,

00:02:46.120 for example, a social media marketing platform,

00:02:48.540 I'm like, that's cool, but it sounds like

00:02:51.100 when I ask who your customer is, it's anybody in the world.

00:02:53.660 But I would suggest that in the early days

00:02:56.160 is you pick a niche and you go deep.

00:02:57.760 So if you said, I'm building a social media

00:02:59.900 marketing platform for flower shops,

00:03:02.080 that's incredibly powerful.

00:03:03.760 So I just call it the subcategory question.

00:03:06.240 This is the category you're in, social media marketing,

00:03:09.080 but what's the subcategory?

00:03:10.340 Focus on that niche, get some traction,

00:03:12.440 and then you broaden it up.

00:03:14.360 That's number four.

00:03:15.200 Five is the process.

00:03:17.260 You know, I was on a call last week with an entrepreneur

00:03:19.740 and they were raising money to start and build their company.

00:03:22.700 And I said, that's cool, and I appreciate it,

00:03:25.060 but as an investor, I would never invest in a company

00:03:27.680 that doesn't have a product in the market

00:03:29.540 with some level of traction, customers,

00:03:31.540 because in today's world, when it costs very little

00:03:33.940 to start, any business for that matter,

00:03:36.340 or even just approach a company to get them

00:03:38.080 to be part of a pilot and pre-order your product,

00:03:40.820 that's a huge signal that you're gonna

00:03:42.480 build the company wrong, so it's really the process.

00:03:44.580 So the high level is, you have an idea,

00:03:47.120 you build a prototype, you get pre-orders,

00:03:49.160 you deliver it, then you raise money.

00:03:51.220 So make sure that you follow a process that's tried and true,

00:03:54.520 or you might actually be successful raising money,

00:03:56.960 build a product for a market that doesn't exist,

00:03:58.800 or a customer that doesn't have the need,

00:04:00.380 and then you gotta go back to your investors

00:04:01.940 after you've lost all their money.

00:04:03.380 So that's a big one.

00:04:04.440 The sixth one is take feedback as gospel.

00:04:08.020 You know, when I'm talking to a customer,

00:04:10.080 I love getting feedback.

00:04:11.500 I answer all my customer support emails,

00:04:13.820 I cold call customers every Thursday,

00:04:15.980 I call it smile and dial.

00:04:16.880 I wanna talk and get their feedback.

00:04:19.060 But I put it into kind of like this holding area

00:04:22.140 and talk to multiple customers and see a pattern.

00:04:25.140 The pain that I see in entrepreneurs

00:04:28.060 is when they talk to one customer,

00:04:30.060 they have a new idea and they keep moving forward

00:04:32.100 and then they find out like nobody else

00:04:34.060 amongst their customer base had the idea

00:04:35.300 and they spent a bunch of time and energy.

00:04:36.780 So don't take it as gospel,

00:04:38.440 take it as just general awareness

00:04:40.100 and then see if that pattern shows up again and again.

00:04:42.680 And honestly, if you're saying okay,

00:04:43.980 well I have a free customer and a paid customer,

00:04:46.460 focus on the paid.

00:04:47.300 They're the one that are gonna give you

00:04:48.280 the real ideas that are gonna help you grow your business.

00:04:50.280 And seven is you don't pivot the customer,

00:04:53.500 you only pivot the product.

00:04:55.400 Here's what I mean by that.

00:04:56.740 Is instead of saying, you know what,

00:04:59.440 maybe, because a lot of entrepreneurs

00:05:01.160 get into this feature release.

00:05:02.560 The next release is the silver bullet.

00:05:04.240 The next feature is gonna make the product

00:05:05.960 finally work for our customers.

00:05:07.180 And many times you're talking to your customer

00:05:09.100 and you realize like this is a nice to have for them

00:05:12.040 and there could be another segment, another category,

00:05:14.400 another industry where this solution

00:05:16.700 would actually be a must-have.

00:05:18.600 So I would argue that many entrepreneurs,

00:05:20.680 one of the biggest mistakes they make

00:05:21.740 is they don't pivot the customer,

00:05:23.740 they only pivot the product. 0.57

00:05:25.100 That's what I have for you today,

00:05:26.320 so I wanna quickly walk through one, freemium.

00:05:28.880 Two is you have multiple ideas

00:05:30.740 when you should be working on one.

00:05:32.260 Three is you don't solve a problem,

00:05:33.640 you have a vitamin, not a painkiller.

00:05:35.740 Four is you go wide and you don't focus on a niche.

00:05:39.880 Five is you have a bad process,

00:05:42.520 so you're trying to raise money

00:05:43.700 before you build a product, as an example,

00:05:45.460 so have a better product.

00:05:46.500 Six is you take feedback as gospel,

00:05:48.460 just put it in that holding tank, process it,

00:05:50.580 and eventually you'll figure it out.

00:05:52.040 And then five is you don't pivot the customer,

00:05:55.140 you only pivot your product.

00:05:56.580 Those are the top mistakes that entrepreneurs make.

00:05:58.640 I wanna challenge you to live a bigger life

00:06:00.740 and a bigger business, and I'll see you next Monday.

00:06:03.100 If you like this video, be sure to subscribe to my channel

00:06:05.340 where you'll get other videos

00:06:06.640 on how to start and grow your business.

00:06:08.220 I also have an exclusive newsletter

00:06:10.040 where I share special invites to events,

00:06:12.120 community contests, and free training videos.

00:06:14.820 And if you want more content right now,

00:06:16.300 be sure to check out those couple videos

00:06:18.020 and I'll see you next week.

Dan Martell - July 18, 2016

The Top 7 Mistakes First Time Software Founders Make

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