I recently had conversations with a couple founders who had to make the hard decision to shut down their business. This is never easy, but here were a couple of the reflections I heard on what they learned in the process.
Make people pay early vs. giving away for free
One founder was describing how they had a free version of the product to get users and obtain feedback. While that did bring some people onto the platform, very few of those users truly engaged with the product. They didn’t convert to paid, they didn’t provide meaningful feedback, and it was mostly just playing around versus a real use case.
Push yourself on getting early sales
It is really easy for technical founders to always want to build. But they should push themselves out of their comfort zone to try and get early sales. There are so many learnings in the early sales process. Even if someone says no, you can learn why. You also learn that sales are possible, and start figuring out the go-to-market process. Then when you bring on a sales team, you already have a playbook you know works.
Be wary of one large enterprise customer
Another topic was an early reliance on one big enterprise customer. This customer would require a lot of custom work, was slow to move, and represented a meaningful part of company revenue. Then when things change in the large corporation (i.e. budget tightens, different priorities, champion leaves), your business can crater with little diversity in customers or alternative paths forward.