That you have to investigate well about business processes of your idea, and the time and money they will consume.
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I have been working in sales and marketing for the past 12 years. My career has taken me from Google to domestic manufacturing. Lately, I have been getting back into the online world with my website Practical Golf. I’ve been at it for almost three years now and built it up to an audience of about 500,000 golfers per year.
Right after I graduated college I was hoping to help my brother with this business. The concept was to “clean up” the apartment rental market in Boston by featuring reliable listings that apartment hunters would know was verified.
Our goal was to work directly with real estate agencies to broadcast their listings to the marketplace in order to get their agents more business. The service was free to use for the end user, and our revenue model was based on agencies paying to have their listings on our site.
Our process was twofold. We had to first do outreach to all of the agencies and convince them that they should have their apartments listed on the site.
Secondly, we had to import all of their data, and make sure it was up-to-date so that apartment hunters could be confident that listings reflected the current market.
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The main problem was that both of these processes proved much harder than we imagined. Convincing the real estate agents to pay for another service to list their apartments was difficult. It was a newer format that challenged the status quo of the industry. There were only a few agencies that were willing to listen in the beginning, while the rest of them were not interested.
Additionally, the data entry process proved to be very cumbersome as well. It took a full-time person to manually update all of the listings and making sure that they were getting the latest information from the real estate agents.
Simply put, it was a much bigger problem to solve than we first imagined.
In retrospect I believe this was not a project that should have been bootstrapped by just a few people with a relatively small budget to develop technology and do sales outreach. If it were a larger company backed by investors I think it possibly would have had a greater chance to succeed.
Also, that particular market was very averse to changing the way they did business at the time. In a way, the idea was probably too ahead of its time.
I’m not sure we could have done anything differently. In that environment, the technology was not near where it was today, and that was one of our main stumbling blocks. The site could have been developed for a fraction of the cost today, but there was no way we could know that back then. The time and place for the business idea were just not right. Sometimes that is just the way it goes!
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I learned a lot from this project. Personally, it proved to me that I wasn’t ready at the time to be a full-time entrepreneur. I knew that I needed to develop my skills more in the workforce before I felt confident enough to execute a strategy more effectively.
Additionally, it showed me that “going all in” is probably not suited for my personality. A lot of people don’t realize how much pressure there is on you when you have no other source of income to survive. Personally, I have had much more success doing a side project now and growing it slowly rather than disrupting my life in order to validate my ideas.
I would advise going the route of starting small and not risking everything if this is your first project. The harsh reality is that most new businesses will not succeed and I think from a strategy perspective it makes sense to get more validation on your idea before you are willing to quit your day job.
Grit by Angela Duckworth is a great read. While it is not about starting a business specifically, it is about a trait that every entrepreneur needs.
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