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Unconventional learnings from behind the startup

Just seven short years before Zendesk made its IPO on the New York Stock Exchange, we were three guys who had quit our sensible consulting jobs to work on what many of us initially thought was a “boring” idea from a tiny loft in Copenhagen. Rather than dreaming of fortune and success, we were making furniture from old doors to save money and wondering how we were all going to pay our mortgages if this gamble didn’t pay off.

The reality of a startup is rarely as glamorous as it seems. The typical startup success story tends to centre around young engineers in Silicon Valley working on a sexy new idea backed by VC funding. This couldn’t be further from the truth for us!

There are things you learn only in the trenches, unconventional advice that most business books won’t tell you. Here are five learnings that I’ve picked up along my own journey from startup to global company:

1) There’s no formula for success

I am allergic to bland business advice and get-rich-quick books that aim to give some formula for success. I have learned there is no formula for success; the world moves too fast for any formula to last, and people are far too creative – always iterating and finding a better way. A better mousetrap is always possible. 

2) Boring is beautiful

Early on I always got the same reaction when I spoke about the idea for Zendesk: Boring. But while help desk and customer service software might not have seemed the hottest of pursuits, helping build relationships with customers was a big opportunity. Does file sharing and FTP really excite you? Nevertheless, companies like Dropbox and Box suddenly made those mundane tasks very easy, social, interesting, and sexy. And I doubt that it was super sexy selling books to nerds online when Jeff Bezos and Amazon started their adventure back in 1994. But that “bookstore” is currently changing the world of commerce.                                                                                              

3) It’s possible to ask your friends for money—and stay friends

The first rule of asking your friends for money is never to ask your friends for money. But if you really are so desperate that you need to raise money from friends and family, make it clear that they will never get it back. Set expectations low. Make it like a lottery ticket—something that is fun, but most likely just a waste of money. And don’t give any influence in return. Most people are unsophisticated in this area. They don’t know how to run a business, invest aggressively, or take risks.

You must also prepare yourself mentally for disappointing a lot of people. Even though they believe they can afford to lose the money when they invest, their financial situation may be very different 12 or 24-months out. You may ruin a lot of friendships so don’t do it if you cannot live with that.

4) The best product doesn’t always win

Entrepreneurs often think only the best product will let them succeed. But sometimes ‘best’ isn’t what your customers really want. In the early days of Zendesk, our young (and sometimes naive) idealism that the ‘best product’ would always win took a bit of a beating. I came to realise it was also about the total execution, and that there seemed to be no wrong tactic when it comes to winning the customer. Ultimately it’s all about winning the order and closing the deal. It’s about the money.

5) Treat customers with love and respect

In some ways, the customer relationship is just like any other relationship. You have to consistently put in effort and not rely on the past. The moment you take anything for granted and stop investing in the relationship is the moment you start messing things up.

For many startups, building customer loyalty means creating loyalty programs that reward repeat behaviour: buy our coffee ten times and your eleventh cup is free. But are your customers loyal because they want that free cup of Joe, or are they loyal because they truly enjoy your product and their interactions with you?

Startups need to face the new realities of the customer economy. Customer relationships matter more than ever, because your future revenue depends on those relationships lasting well beyond a single transaction. It’s like the difference between putting cut flowers in a vase and growing your own flower garden. The cut flowers, although beautiful for a short time, can quickly wilt (a one-time transaction–something beautiful for a special occasion that disappears); but the flower garden’s payoff is a thing of beauty for a long time.

The journey from idea to startup to successful business can be long and hard, but many times I am reminded that there is nowhere else I’d like to be, and nothing else I’d rather be doing. I hope that what we have learned may help you on your own path, or at the very least encourage you to think differently from the standard business-as-usual practices.

Mikkel Svane is the founder and CEO of cloud-based customer service software company Zendesk. He is also the recently published author of Startupland, a book providing a personal account of his and his fellow founders’ journey from a loft in Copenhagen to running a billion dollar organisation headquartered in Silicon Valley and going public on the New York Stock Exchange.

Featured image: Mikkel Svane. Source: Provided. Credit: Dario Cantatore.





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