As Osmo Systems CEO and cofounder, I have learned a lot over the 2.5. Many of the lessons have been broad and relate to most entrepreneurial endeavors, but some are very specific to our hydroponic/aquaculture/hardware niche. Today, I'm taking a break to write some of that down. If you are interested in entrepreneurship or in the hydroponics, aquaponics, aquaculture, vertical farming, IoT, or hardware startups, click to read the stories of how I discovered some of my hard-fought lessons.
- Zach Stein
1. Knowledge is the Opposite of Learning
What I did not see then, was that an effective leader does not need to have the right answers, but must know the right questions. At one point early on in our endeavor building OsmoBot, I spilled out my fears and frustrations to my dad. He's always one for a choice piece of wisdom and he listened patiently, and at the end said, "Zach, there's a phrase I learned recently and I think it applies here. It goes: 'knowledge is the opposite of learning'". In other words, when you think you know something, you stop listening and lose your capacity to learn more.
I needed a major overhaul on my approach to how I was running this fledgling startup. I wasn't learning from customers about what they wanted in a hydroponic/aquaculture monitor and I was limited the collaboration potential with my business partner, Paul. So I decided to shut-up and listen. Every inbound inquiry we got to our website I wrote back enthusiastically and asked to schedule a phone call. My basic question was: "what would your dream monitoring system look like?" I stopped selling potential customers on what I thought they should like about our product, and instead started asking them about their problems with monitoring and how they envisioned a system like ours solving it. This gave me a lot of key insight into the market and was crucial in our early product design decisions.
This does not mean, as the leader you should not have an opinion. If you have no opinion and no ability to make a decision, then you are not leading, you're just facilitating a meeting. The key I've learned is that before you make a decision, first create a space for those involved to share their thoughts. Try on each, push back (gently), and only then make a final decision. This will allow you to gather as much data as possible before moving forward.
In hindsight, my lack of experience compared to our customers was actually a gift. It allowed me to always assume that the customer knows their own problems better than I do, and that during the stage of customer discovery and validation my job was to ask that right question and then listen. "Knowledge is the opposite of learning." Try it on, you'll be surprised how much you come to learn.
2. Crowdfund Early
Why? We got to talk to actual paying customers for our hypothetical product. A lot of them. Before Kickstarter and Indiegogo, there was really no other place where new companies could find potential customers willing to pay in advance for a half-finished product and give the company feedback as if it were compelted. Sure, you can find hypothetical customers and ask them about what they would want, but there's a difference when someone "puts their money where their mouth is." Despite not hitting our financial goals, the campaign itself was a huge success. We learned a lot about what was attractive about our product and how much further we needed to take it to be successful.
If you're in hardware, crowdfund early; not for your bank account, but for the feedback. There is not better customer validation.
3. Free Help is Almost Never Free
4. Nights and Weekends Won't Cut It
2.5 years later, Paul quit his day job to work on OsmoBot full time. The project was moving too slowly. Hardware is like that because, in essence, you are building both a hardware and a software company, so there is a lot to do from the engineering side. Luckily, in this one month of working full-time, Paul has accomplished more than he had in the past year. It's been a huge boost.
In hindsight, it would have taken us at least another year of nights and weekends to get to where we are today - on the verge of launching our beta test. I don't know if either of us could have waited that long without questioning the whole project. If you are building hardware and are still at your day job, start planning now for that quit date. Save as much as possible, maybe line up a night job that can get you a little cash on the side (I still tutor a few nights a week), and give your two-weeks ASAP. You'll be happy you did.
5. You Should be Embarrassed by Your First Website
In hindsight, he was right. My first website was pretty crappy. It suffered heavily from tl;dr (too long; didn't read), was full of very cheesy images, and tried to pack 10 different messages onto one page about why the product we were building was awesome. And yet, I'm so glad I posted it when I did. Despite all of the site's shortcomings, just having an online presence changed us as an organization. We started interacting with interested customers, learning, and setting up phone interviews to find out even more. It allowed us to work on how we explained what we're doing to the world and we got to start testing which features of the product resonated most strongly.
So while I still cringe when thinking back to that first site, I realize my friend was right. Your first website will not be that great, but it needs to exist. The only way to make it better is to publish it, sit back, and keep learning. The latest iteration of our site is much better, but I know we still have a ways to go.
6. Be Wary of Investors Who Cold-Call
We learned the hard way that serious investors have far more people that want to talk to them than they have time to talk to. So unless you are on the brink of being the next Google, it is very unlikely that the type of investor you want investing in your company is going to approach you out of the blue, especially during your seed round. The opposite is usually true and it's on you to make the meeting happen.
This is not a hard and fast rule, so definitely respond to the cold-email of an investor asking for a conversation, but do your due diligence ahead of time. Learn as much about his/her background as possible, find out what other companies he/she invested in, and if something feels off, definitely ask for references from past companies the investor has put money into.