Experience is everything: Mistakes of a non-technical founder of a tech business
Author
Zeid Bsaibes
Date Published
Copy to clipboardShould you read this?
Below I discuss some of the many mistakes I made when founding my tech business Hawkker. To be brief: it was my first business, I knew next to nothing about software engineering or marketplace apps and ultimately it didn’t return the financial investment. It did however return a huge amount in terms of experience for the future. It’s a bit of a lengthy read, but if you’re thinking about or have already started a tech business then there might be a nugget or two below which could save you some time, money or anguish or all three!
TLDR: Mistakes were Made. Experience Minimises Repetition
Copy to clipboardIntroduction
To paraphrase an old saying: good execution is worth a hundred excellent ideas. At some point all of us have come up with a legitimately good startup idea. We’ve discovered a problem worth solving, possibly even a problem we ourselves have faced and for which know there is no good solution. We might have even tested the concept with people who have honestly stated that if a solution existed they would pay good money for it. We may have even gone yet further and raised some seed funding from family and friends and are ready to crack on.
You would think that having a great idea is fundamental to any successful new venture, but this isn’t quite the case. When I’ve spoken to investors in startups they usually state that they fundamentally assess every early stage idea on three pillars:
- The product (is it a good solution to a problem?)
- The market (is there sufficient demand to justify developing the product?)
- The management team (how capable are the people bringing the product to market?)
The 3rd point is the one investors tend to really tend to care about. A startup might have a great concept which addresses a valuable problem, but if the investors lack faith that the team are the right people to bring the idea to market and create value, they will decline investment. Sometimes the investor might bring in their own management team, non-exec team or experts to help their investment succeed, but usually they will just pass on the opportunity. Not having the right management team doesn’t mean that the founding team are not decent, hard-working people who are full of good intentions and energy. It means that investors don’t believe the team has the right experience in the key areas needed to create value from the startup idea.
Copy to clipboardExperience is Priceless
Take a restaurant concept for example, if the founders have never operated or worked in a food service business there’s considerable risk that they will make (often commercially fatal) mistakes somewhere along the journey of establishment, fit-out, staffing, management, marketing, scaling etc. Mistakes in business usually mean wasted cash or time, usually both. Cashflow is the lifeblood of startups and a single mistake in any area can be the difference between success and failure.
Smart people are often the worst for assuming that intelligence is a substitute for experience. They are smart enough to develop a clever idea to address potentially lucrative markets and they’re are also smart well aware that there will be problems along the way but they lack the experience to identify which problems are potentially the fatal ones and which problems are less important or indeed complete distractions.
Copy to clipboardMy Experience With a Lack of Experience
Back in 2017 I founded Hawkker, my market research lead me to a problem worth solving: namely solving the information gap between small restaurants who struggled to drive footfall and customers who were looking for better places to eat. I decided to try and solve this problem with a technology solution. The initial iteration of the product was two iOS apps, one for restaurants and one for customers and and an additional web-based app for restaurants.
Copy to clipboardEarly Mistakes Around Engineering and Design
Copy to clipboardMistake 1: not hiring a UI/UX Designer
Instead of going out and hiring a professional user experience and user interaction researcher I set to designing the app myself. As far as I was concerned I had positive feedback from a lot of people and in my mind: since I felt I knew the problem to be solved, I would instinctively be able to design exactly the right product to solve the problem. After all I had used apps like Deliveroo and AirBnB, it couldn’t be that hard to design an app right? With this in mind I learnt some design software and got to it.
Not going through the process of commissioning some robust user research with a trained UX researcher and designer to help inform the creation of Hawkker was a big mistake which I talk about later on.
Copy to clipboardMistake 2: Not knowing enough about the engineering
After sketching up (pun intended for designers amongst you) what I thought would be a good initial version of the app I went out to find somebody to build it. At this point in time my software engineering know-how was not in a position to turn the designs into the product itself.
I had very little idea about the technical aspects involved in what I was wanted to build. I didn’t know very much about mobile app development, web development, APIs, software languages, testing or anything engineering-related really. After a bit of research I found out that what I needed was a fullstack engineer, a one-stop shop and do all the engineering things the app needed. However after further research I discovered that fullstack engineers come in all shapes and sizes, they all use different software languages and frameworks to build the various bits of the app. At this point I was overwhelmed with unknowns: which software language should we use? Which database? Which frontend framework? Which backend? How many ends are there?
With all this in mind I thought my best bet would be to hire an agency to build the app. I took my designs and went shopping around. I was pleasantly surprised by the friendly sales teams at these agencies who would walk me through (read: superficially guesstimate) all of the technical bits of my app that would need building and how they had just the right engineers to build them.
Copy to clipboardHedging against my lack of engineering knowledge
I wasn’t a complete n00b in business, I had already worked at a startup on projects where scope, time and cost all slipped and this lead to expensive frustrations. I will give myself a bit of credit for ensuring that the signed development contract with the agency had a locked in scope (my designs), an agreed price and a phased timeline for the work. I also hired an excellent freelance app developer as a consultant who would help me by auditing the work of the agency at our regular update meetings.
Did the agency try to under-deliver, inflate costs and slip on timelines, of course they did! Thankfully when it came to the legal wrangling and fighting I did have a good contract as a basis to fight from. Unfortunately when they realised that they were locked into a contract that wasn’t going to be profitable for them their level of effort, quality and enthusiasm fell off a cliff.
Copy to clipboardWhat I didn’t know came back to bite me
Part of the problem was that the scope I thought I had locked in with the designs I created only covered the bits of the platform that the users would interact with (the frontend). This is the equivalent of signing a contract with a house builder where the only real specs you have are renderings of what you want the outside of the house and rooms to look like. If you don’t provide some definition of the foundations, plumbing or electrical system how will you ever hold them to account when they are done badly, what does “badly” even mean in this context. You can read my article on fullstack engineering to get a better idea of what I mean here in a technology context, but essentially in any serious software application your frontend (the bit your users interact with) is only the small visible proportion of the iceberg with the rest is lurking below the surface, out of sight.
Copy to clipboardRectifying Mistake 2: Hiring my own engineering team
After market testing what had been built for me by the agency I quickly realised this was not the product that was going to solve the problem that I was targeting. The features that they had built were janky and incomplete, the admin panel (the bit I used) was not fit for purpose, the apps were far from “delightful” to use and a lot of work would be needed before I could hope for good user traction.
Armed with a bit more knowledge of what I needed, I got rid of the agency and went out and built a small engineering team of various developers to help me rebuild the app. I asked them lots of questions and discussed at length every feature and improvement that I was proposing. I grew familiar with the processes involved with turning a product feature or design into a distinct unit of work for an engineer. This involved using project managements tools, user acceptance testing processes, feature validation, refinement and constant interaction. Essentially I learnt and took on the role of a Product Manager in my company, a role which I really enjoyed as I began to understand the bridge between the customer, the product and the engineering.
Copy to clipboardRevisiting Mistake Number 1: too many features not enough focus
As I mentioned, a mistake I made early on was not hiring a professional to apply research methods to help me understand exactly what design and features the product would solve the problem that I was trying to solve. My early designs yielded an app which did lots of things kind of well, but didn’t really do anything exceptionally well. What do I mean by this? Uber is excellent at getting you a vehicle to take you from A to B. The user journey (a fancy way of saying the steps you take) to summoning a car from where you are, locating the waiting car and paying for the journey is exceptional. Everything Uber does is built around optimising this flow. Everything AirBnB does is built around helping you book the right place to stay. Great technology does a narrow set of things exceptionally well.
As my comfort level as a Product Manager grew, I began to suggest features or tweaks that I had felt would be beneficial for the product as a whole. I won’t go into the litany of (relatively) useless features I developed but needless to say the app wasn’t as focused as it should have been. At the same time my engineering understanding was not yet at a level where I aware of the implications of building these features. This issue was compounded by the fact that my team were working with the legacy codebase making things more even complicated for them to unpick. More features mean more things to go wrong, more adaptations to the existing features and more things to test.
If I had worked with a user research professional throughout the process I would have built a much cheaper, more focused and more auditable set of features which would have made it easier to know if I was correctly solving the problem that had initially driven me to start the business in the first place.
Copy to clipboardMistake 3: Trying to build a marketplace app
Unlike the previous two mistakes this is more of a commercial blind-spot that I hadn’t quite appreciated when founding Hawkker. Nonetheless this is a biggy and if you want to start a marketplace business keep reading!
So I’ve mentioned Uber, AirBnB and Deliveroo already. These are all exceptional bits of software and hugely valuable companies. ChatGPT (reliably) informs me their market caps are $170bn, $90bn and $2.1bn respectively at the time of writing. So even allowing for some LLM hallucination you get the idea.
What’s the common theme across all of these businesses? They are marketplace platforms, they create markets of buyers and sellers, Uber creates a market where transporters sell their transport, AirBnB creates a market for home owners to rent accommodation to holidaymakers, Deliveroo connects restaurants with hungry people. They cleverly don’t own any of the things they sell or even the means of producing them, they are just the middlemen and therefore they can scale ludicrously and their balance sheets don’t keep them awake at night.
My startup idea was similar, I was specifically trying to connect small restaurants and street food businesses with customers. I wanted to aggregate a disparate, fragmented market and make it easier for customers to discover new food from the smallest of businesses.
Marketplaces can become incredibly valuable as we saw above, this is largely driven by their network effects. Network effects occur when a product or service becomes more valuable as more people use it. More users attract complementary participants (e.g., Uber: more riders → more drivers → better service). This creates a growth loop—higher engagement brings in more users, reducing acquisition costs and strengthening platform dominance.
Marketplaces also are harder for competitors to enter, if Lyft or some new AirBnB wants to break into the market they not only have to compete for more riders or renters they have to compete for more drivers and home owners at the same time. Once you have built a running marketplace you’re in a really strong defensible position.
However, building a marketplace from scratch is a nightmare, so painful in fact that I need to use bullet points to help me stomach reliving the trauma of learning these hard truths on the job:
- You have to build two (or more) separate technology products, both for the supply side and for the demand side. Often more than twice as expensive as either one alone. Deliveroo has one app for restaurants, one for customers (and indeed a third for the delivery riders).
- You have to pursue two entirely separate but entirely related marketing campaigns B2C for the demand-side acquisition (think hungry customers) and B2B for the supple side (restaurants).
- You usually have to grow both sides of your market in the same geographical location at the same time, there is no point onboarding restaurants in London if you’re are trying to increase customer acquisition in Scotland.
- You face the chicken-and-egg problem. Which side of the platform do you grow first to convince the other side to join? Uber cannot convince drivers to sign up to supply their transport if there are no riders requesting them. However as a rider if you open Uber and there are no drivers you’ll uninstall the app pretty quickly.
When starting Hawkker I had no idea how complex, expensive, slow and soul-destroying starting a marketplace from scratch would be. Added to this I had no real marketing experience, either B2B or B2C, I was really setting myself up for failure.
One of the key challenges is solving the chicken-and-egg problem. After much reading I eventually developed strategies to do address this, which primarily focused on creating “single-player value”. This means giving one side of the marketplace value without the other side yet being significant enough for transactions to take off. A good example of this is OpenTable: before they had lots of customers booking restaurants, they offered restaurants a standalone piece of software which helped them manage their bookings coming in from existing platforms, like telephone and email bookings. They created one-player value, onboarded a bunch of restaurants before growing the restaurant patron side of the platform. Once they had enough restaurants using their booking management system, they opened up a patron facing product which allowed customers to directly book with restaurants through OpenTable. Customers using OpenTable had plenty of options in terms of restaurants (the supply side was already there) and restaurants actually didn’t need to do much as they already had a great booking platform that they were familiar with.
I tried to do something similar to this, but despite experimenting with a few features, I found no one-player offerings that were of sufficient value to small restaurants or street food vendors. We built menu analytics software, supported their marketing, provided resources to help them run their businesses. None of this was compelling enough to onboard them in enough numbers to really solve the chicken-and-egg problem.
Copy to clipboardA Final Mistake: Knowing when to call it a day
You have possibly been reading for a while now and your time is precious. So I will be brief: the final mistake I made was not being sufficiently ruthless with myself and the business. I carried on for too long without sufficient traction and convinced myself that some killer-feature, some high performing bit of social media content or some thing or other would light the fire in the rocket.
I should have really have had a key value metric or heuristic (some businesses call them North Star Metrics) and given myself a maximum amount of time and money that I would spend to get the business to that metric. A certain level of ruthlessness would have then been applied: if I didn’t make it to the target metric in time then I would just pull the plug. Some places have described this failure to be ruthless as Death by A Thousand Cuts.
So, all of the other mistakes I’ve mentioned can be mitigated, to a degree, with the prescriptive advice I’ve tried to share above and with the vast troves of advice out there online (see some at the end of this article). However, the problem of knowing if and when to quit is super hard to be definitive with. You will hear lots of stories of founders who were just about to quit and then were showered with success. You will hear just as many stories of people who flogged a dead horse for too long and it cost them time, money and their sanity.
From a personal point of view I know how hard it is to eventually call it quits on something that you have invested passion, money and your reputation on and I can completely sympathise with any founder who is struggled with this right now.
Copy to clipboardConclusion
Thank you for taking the time to read this article if you’ve got this far I hope you’ve found a kernel or two of useful stuff. If I could sum up my advice to anybody starting a technology company: learn a bit of engineering, understand what the key challenges are to entering your market and most of all try and surround yourself with experience, be that from co-workers, investors, mentors or anybody with a background in some or all of the areas you are attacking. Also make sure you work hard, are in the right place at the right time and are somebody who is blessed with being frequently lucky.
Copy to clipboardResources
Below are some resources in this area that I’ve come across that relate to the above article and might be useful
Copy to clipboardOn the various roles involved in product design
https://en.wikipedia.org/wiki/User_experience_design
https://www.atlassian.com/agile/product-management/product-manager
https://www.toptal.com/product-managers/digital/how-to-write-a-user-story
https://www.toptal.com/cto/engineering-manager-role-explained
Copy to clipboardOn the challenges of starting marketplaces
https://a16z.com/books/the-cold-start-problem/
https://www.lennysnewsletter.com/p/how-to-kickstart-and-scale-a-marketplace
https://www.growthmentor.com/glossary/chicken-and-egg-problem/
Copy to clipboardOn knowing when to call it a day with a project
https://www.ycombinator.com/library/3S-when-to-shut-down-a-startup