Entrepreneurs Listen Up! These 3 Assumptions Fail Tech Startups
Oct 12, 2024
Sometimes, the most innovative ideas fall short. Mona Sabet, a seasoned entrepreneur, shares the story of her failed tech startup, Viblio, and the valuable lessons she learned along the way.
Viblio aimed to revolutionize personal video management using artificial intelligence (AI). The idea was simple: automatically tag, categorize, and search home videos, making cherished memories easily accessible.
Despite initial success – a functional app, a growing team, and user interest – Viblio ultimately shut down in 2016. The reason? Three critical assumptions that led the company astray.
- Feedback Isn't Enough: Beyond "Cool" - Viblio relied heavily on user feedback during development. People were impressed with the technology, but liking something doesn't translate to paying for it. Sabet realized a crucial flaw: they needed to assess buyer commitment. Setting up a pre-sale campaign, where users pay upfront for a future product, would have provided a clearer picture of true market demand.
- Features Don't Equal Engagement: Solving the Right Problem - Viblio adopted a "freemium" model, offering free basic features with the intention of attracting users and later charging for advanced features. However, users weren't sticking around. Adding more features, like automated highlight reels, failed to improve engagement. The problem? They were focusing on the wrong thing. Viblio hadn't yet achieved product-market fit – a product that truly solved a core user need.
- Money Can't Buy Everything: Building the Right Team - Viblio's focus on AI talent proved challenging. They lacked the connections and resources to recruit top talent in a competitive field. Sabet learned that passion and existing connections within the target market are crucial. Simply throwing money at the problem wouldn't guarantee success. Recruiting the right team often requires being embedded within the relevant ecosystem.
Finding Passion Beyond the Bottom Line
Viblio eventually identified two potential niche markets: professional sports and adult film. While financially viable, these weren't markets Sabet was passionate about.
This experience led Sabet to a key conclusion: product-market fit alone isn't enough. Building a successful startup requires genuine passion for the market you serve – in addition to understanding its dynamics and having access to a relevant network.
Failure as a Stepping Stone
While Viblio shut down, the journey wasn't a waste. Sabet gained invaluable experience, far surpassing what years in a corporate role could offer.
Looking back, she emphasizes three key lessons:
- Do More With Less: Viblio built a functional AI platform on a tight budget, proving resourcefulness is a valuable skill for scaling companies.
- Ruthless Prioritization: Focus on what truly matters. Not every seemingly "cool" idea deserves resources – cut what doesn't contribute to growth.
- Fall in Love With the Problem: Don't be blinded by your solution. Identify a genuine user need and build a product that truly addresses it.
Sabet's story serves as a valuable reminder for aspiring entrepreneurs: embrace challenges, learn from mistakes, and most importantly, find a problem you're passionate about solving.
If you've found value in these insights, I invite you to dive deeper into the world of business growth by subscribing to the Candy Valentino Show on Apple Podcast.
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