Success Lessons From 2 Innovators Who Came Out Swinging
Grow Your Business, Not Your Inbox
Everyone loves a good success story (especially people in the startup world). The fascination goes far beyond potential IPOs -- we analyze, follow and root for our favorite startups like sports fans. Whenever a startup succeeds, we feel we can succeed in the same way.
The great thing about running a startup is that you can succeed. You can also exceed your expectations, if you know how. So many companies are making the mistakes you need to avoid making, pivoting in the same way you need to be pivoting, and succeeding in exactly the manner you want to succeed, that case studies are everywhere.
I’ve already covered how startups fail because of stupid decisions, as well as how they sometimes struggle but still succeed with smart pivoting. It seems only appropriate to now put the spotlight on ones that made crucial decisions on the one-way path to enviable success.
You read that right. Hayden kept good on his promise to his wife, stopped checking his emails and only goes into the office once a week now to check up on things. His story easily fits the "overnight success" mold.
But when you really look at what happened, Hayden’s startup success was incremental. He took two steps forward most of the time, but there was a lot of backpedaling, too. In 2007, when the real estate company he started in his early twenties was brought down by the crash, he almost got indicted because of fraud committed by his clients.
However, instead of giving up, Hayden recognized that investors and homeowners would need help in the aftermath of the housing bubble. They needed someone to help them figure out how much they should rent for and talk them though the risks. Renter’s Warehouse was born.
It’s been profitable every year it’s been in business, and reported $20 million in revenue in 2013. But Hayden isn’t sitting on his laurels. He’s used the success of Renter’s Warehouse to launch his Professional Landlord franchises, which has already become the second largest service of its kind in the country.
Why did Hayden succeed? According to Hayden, his secret comes from making money "in the doldrums." Inspired by Warren Buffet, Hayden decided to make his money where others wouldn’t bother setting up shop. Naturally, he credits the rapid growth of his companies to the intense demand for property management and a lack of competition.
2. GroupMe, an app that lets users message groups of friends via chat, text or email in one place, went from launch to an $85 million acquisition within a year.
Jared Hecht and Steve Martocci already had startup experience under their belts, but the two weren’t expecting millions -- much less an actual company -- when they attended TechCrunch Disrupt NYC 2010. But they were prepared. After demoing a working group chat with a half-price ad linked to a Lost series finale event at Brooklyn Bowl, their proof of concept quickly caught the eyes of several investors.
So they got to work, and very quickly raised $11.45 million in venture capital. The breakthrough moment came when they were able to access address books and allow users to invite friends to join their groups via Facebook, text or email. The holy trinity of messaging was theirs.
Long story short, GroupMe could do no wrong. They were acquired in August 2011 by Skype for $80 million.
Why did Hecht and Martocci succeed? Sure, in part it was because they entered the market at the right time. But they really succeeded because they took their idea to concept before they even had a company. They followed lean-startup methodology and quickly figured out if investors would be interested before spending a dime on development.
If you want to fail (or succeed) fast, why waste any more money than you have to?
The morale of the story. Did you notice how I keep asking why the founders succeeded, rather than why their companies succeeded?
While it’s easy to attribute a startup’s success to the right business model, the right product or the right marketing, it’s all too easy to ignore the decisions that took place in cramped co-ops and rented workspaces and nearly going bankrupt 10 times. When it comes down to it, every semi-feasible startup has a chance to succeed. Whether an entrepreneur succeeds depends on whether they can recognize the correct choices they have to make.
Looking to see what other successful startups did isn’t the worst strategy you could adopt.