*OPINION: How I Failed Fastest: An Entrepreneur’s Guide to Pressure Testing New Ideas
This opinion piece was written by Pranav Khandelwal, a mobile engineering manager with Cie, an innovation accelerator for large enterprises and a growth accelerator for emerging startups in Irvine. Cie gives their employees funding opps to explore new ideas.
I was recently given the opportunity to pursue my billion-dollar idea—the one that was going to enable me to buy my first yacht and position me atop every “40 under 40” list the tech industry has to offer. Within a few months, though, my entrepreneurial journey had arrived at an unexpected place: I’d discovered my so-called “billion-dollar” idea wasn’t going to produce yacht-level money. In fact, I wasn’t even sure it could yield an inflatable life raft.
Like so many entrepreneurs before me, I’d ultimately come to the realization that my idea simply wasn’t the innovative, much-needed tech revolution I’d hoped—the one that my family and friends had assured me it was when I was in early ideation stages. However, unlike many entrepreneurs, I reached this conclusion quickly and methodically, before painful levels of time and funding had been frittered away on a dead end. And for that reason, I consider this a success story. Here’s what I learned on my journey.
First, the Elevator Pitch
Like so many business ideas, mine sprang from personal experience. A lifelong renter who’d switched apartments several times in recent years, I bemoaned the time-consuming, frustrating nature of the apartment-hunting process. My “shouldn’t there be a better way?” musings gave birth to the concept for Digs, a marketplace designed to enable apartment companies to find in-market renters and offer them properties that meet their needs. The alluring idea from the renter standpoint was that “apartments compete for you.”
In pursuing Digs, I was afforded a massive opportunity through my full-time work at Cie Digital Labs, a corporate innovation lab that creates enterprise apps and a technology startup studio that spins out other ventures. I entered the concept of Digs into Cie’s internal Shark-Tank-style competition, which gives Cie employees an opportunity to secure funding to pursue new ideas. Coming out of the competition, Digs was selected as one of two ideas to move forward. Thus, I was given a gift that few entrepreneurs ever receive: a low-risk, supportive environment in which to incubate my brainchild. Then, from Cie’s leadership, I received my first indispensable piece of advice:
Don’t build it. Vet it. I’m an engineer by trade. My greatest impulse is to build. And based on the positive anecdotal feedback from family and friends, not to mention the interest expressed via the Cie Digital Labs competition, I was tempted to jump straight into the building process. Thankfully, I received some good guidance at the outset: Don’t jump into the product. Spend time on research to make sure there’s a real market for it first.
Talk to people who know more than you do. OK, so what does vetting your idea look like? Well, it’s mainly about talking to people—people you don’t know and who don’t know you. Mainly, you should talk to the people who would be using—but more importantly, paying for—your product. For me, that meant setting up time to run my idea by executives at large, institutionally owned apartment communities, whom I had identified as the people most likely to pay for the service I intended to offer. The feedback was instantly disheartening: “We already get too many leads from other channels. We don’t need this.”
Lean on data, but be honest about the story it tells. OK, so some holes were opening up in my vision. But I was certain there was still something there. I continued to refine my problem statement and hypothesis while gathering data. The problem with a vision, however, is that it’s easy for that to evolve into tunnel vision through which you can miss the bigger picture. You can find data to prove anything, but that doesn’t mean it’s valid. For me, the data I was gathering pointed to a great need in the market, I thought—a great need among renters, that is. When I showed my data to others, though, they were able to identify the real story line within the data: that continuing declines in apartment vacancy rates were creating a market more favorable to landlords, for whom lead-gen tools like mine would become less important.
Don’t quit your day job. OK, so there I had it. Based on both first-person accounts and marketplace data, the concept for Digs—while ever-so-appealing to stressed-out rental seekers—had extremely limited revenue potential. And, to boot, it would require a massive sales operation to get off the ground, a challenge I had not considered while in tunnel-vision mode. While these realizations were frustrating for me personally, given my attachment to the Digs idea, they were also unequivocal—and strangely liberating in that regard. In short, Digs was shelved, and I shifted back to my existing full-time role within Cie Digital Labs.
Of course, very few entrepreneurs have the luxury of the kind of foundational support that I had through Cie during my journey. But that actually makes the lessons I gleaned from this process all the more important for intrepid idea explorers. Quite simply: Don’t run full-bore at an idea until you’ve taken the time to objectively vet it. That might mean working a lot of nights and weekends while you maintain your day job—but make sure you keep that day job. Had I followed my gut and jumped straight into product development based on the feedback of people who loved me, my path toward the final conclusion—that my product concept was not financially viable—would have been longer, more costly, and ultimately a lot more painful.
As an entrepreneur, time is your most valuable asset. You must be willing to set aside your deep affections for a project and listen to what the market tells you it needs, wants and—most importantly—will pay for. You have to be willing to walk away before too much is lost.
And remember: Every minute you save by failing as fast as possible is another minute you get to spend on the next great idea—the one with far more upside and potential for success.