10 painful lessons from being first to market
Why you shouldn’t do something no one has done before unless you have a pile of cash.
Hi, it’s Melissa, and welcome to “your founder next door”, a bi-weekly column with relatable stories of my journey bootstrapping eWebinar to $5m ARR. No BS, just straight-up truth bombs on what it’s like to build a company without an abundance of resources or friends in high places.
The Big Aha! 💡
This is the story of how I built two blue ocean startups before learning that being the “first to do something” is the worst strategy for a bootstrapper who needs revenue fast. Here’s what really happens when you think the world is your oyster…🦪
Backstory 👩🏫
“Isn’t someone else already doing that?!” Says every human with a slight look of disdain and disapproval after you share your startup idea, including VCs who should know that the pie is big enough for everyone to have a slice.
The problem is, inexperienced founders like myself 14 years ago hear that and think, “I need to do something no one else has ever done before! I need to be innovative and bleeding edge for my business to succeed – and for it to be worthy of an investment!”
I lived this, and the result was me actively looking for products that did not exist (blue ocean opportunities)…not once, but twice.
Per ChatGPT, “Blue Ocean” is a term used to describe a new market space with little or no competition. It is an uncontested market where companies can create and capture new demand, making competition irrelevant.
In my first startup, Flat World Apps, which lasted 4 years, we built interactive brochures for residential real estate development projects for the iPad (which had just come out). Instead of walking into a showroom and getting a coffee-table-book-like brochure with renderings and floorplans, we offered an iPad app alternative where media assets could be updated in real-time, which also doubled as a sales tool with inventory management for salespeople.
In my second startup, Spacio, which lasted 5 years before it was acquired, we built an open house check-in system that replaced pen and paper sign-in at open houses. (For context, an “open house” is an event set up by the seller’s real estate agent, where homebuyers can view the property for sale without an appointment. A popular concept in the US and Canada that usually happens on Saturday and Sunday. When attendees walk into the home, they’re greeted by the agent and asked to sign in on a piece of paper; Spacio was the iPad version of that, collecting leads digitally for automated follow-up.)
Both of these products were blue ocean, with little to no competition at the time we started trying to monetize; and both were excruciating uphill battles.
The first startup turned into an agency because we were bootstrapped and said yes to everyone and everything. The second startup almost bankrupted me as it took 2.5 years of iterating on the product before we made our first $10.
Why did I need to make that mistake twice? Because apparently, once wasn’t enough! It didn’t click until I got a reality check from the savviest founder I know (more on that below). 🫠
Fun fact: To this day, the real estate industry has not caught up, and is still largely paper-based.
Here are 10 painful lessons I learned around blue ocean, and why I’d never do it again…👇
10 painful lessons learned: Pitfalls of blue ocean strategy 😥
BIGGEST MISCONCEPTIONS
1. My idea is incredible because no one has done it before!
There are 8 billion people in this world. If NO ONE has ever pursued your idea before, it’s probably a red flag. Did someone try and fail? Is it not viable? Do more research first before jumping to conclusions.
2. More prospects means more customers.
Not a single company in our industry (real estate) already had the products we were selling. Companies didn’t want to be first movers and saw us as an unproven and risky investment.
3. No competition is amazing.
We were the only ones telling companies they needed our product, so prospects were dubious and waiting for us to have adoption first. Competition would’ve been GOOD to help educate the market and validate our existence. In fact, I wish we had more competition with eWebinar now for the same reason.
4. Everyone will find me since I'm the only one!
Nobody found us organically because they weren’t searching for us. Even if they were problem-aware, they weren’t solution-aware, given no one existed before us. In our case, prospects weren’t that problem-aware; unfortunately, we were vitamins and not painkillers.
5. First to market means I’ll be the industry leader.
Becoming an industry leader means having a significant user base and that takes a long time. It took almost 4 years for Spacio’s name to be recognizable, and the real estate industry is tiny in terms of number of players compared to others.
6. It's less effort.
Sales cycles were long because we had to overcome objections about why more companies hadn’t bought in yet. After we made our first $10 from a single real estate agent, it took another 9 months to get our first 10 enterprise customers (we switched to B2B pretty quickly because of deal size). Every deal was hard earned.
BIGGEST CHALLENGES
7. Every conversation started from scratch.
Since nobody knew what our product was, every person needed to be educated from the ground up. Our value prop was not immediately understood so everyone up the food chain had to be convinced.
8. There was no price comparison.
Our product was cheap relative to the amount of effort it took to build and maintain. But without competing products, were we too expensive? Too cheap? Or just right? Nobody knew, and we couldn't yet justify the cost vs. ROI (return on investment).
9. Fought hard to be in every budget.
Since our product was not budgeted for previously (something enterprises need), another line item had to be sacrificed for us to be included. Everything was “working fine” before us, so why change now? We had to find the right company at the right time that was willing to go against the grain and take a leap of faith, do a lot of favors for them, and not charge very much to get our first handful of deals.
10. Sold on emotions, not ROI.
Since we weren’t around very long and there were no others before us, we didn’t have hard ROI numbers to show. We had to sell on emotions (eg. second tier companies who want to be more innovative to compete, champions who believed in the trend we were creating…) and couldn’t demand the highest price.
Reality check from the savviest founder I know ✅
One day, shortly after Spacio was acquired in 2019, I went to see a friend of mine who wanted to tell me about the new business he was building. He was, and still is, the smartest, most creative, and savviest entrepreneur I know personally; someone I have immense respect for.
I saw him start a furniture company from scratch and take it to 8-figure revenue within a few years; from personally delivering sofas with his partners to designing and manufacturing their own brand, in their own factories.
He told me he was starting a luggage company. “Why would you start a luggage company when there are already so many out there?!” I asked with a confused look on my face.
He told me all about the current state of the luggage economy, their quality across different brands, manufacturing vs. retail costs, where brands are winning and failing, and how he believes they can compete as a bootstrapped company because of his expertise in direct to consumer marketing and lean manufacturing.
Then, he told me the thing I wish someone had told me a decade prior:
“The reason your businesses have been so hard is because you try to be first mover. When you’re first, you have to open up the market and be the first to educate. When you go into an existing market, you can learn everything from existing companies, their successes and failures, and figure out how to do better in every aspect of the business. You don’t need to figure out if your business is viable, consumers are already buying from others. They just need to buy a better product from you. It’s a lot easier to be the best second mover, and you’ll make money right away.”
And there it was, my reality check. 🤯 For the first time, I understood why both of my companies were uphill battles. I understood why it was so hard for me to sell something no one had ever bought before. In under a minute, my friend put things into perspective for me.
That was my past, but it would never again be my future.
This friend was Victor Tam, CEO & Co-Founder at Monos.com.
By the way, Victor was the person who gave eWebinar its name when I couldn’t come up with something remotely interesting. When I was conceptualizing my “webinar automation company”, I told him to let me know if he could think of a good name. A couple days later, I got a text from him that said: Buy this domain now, I already negotiated for you. Trust me, it’s cheap.
The rest is history. What a guy…🙌
What I did differently with eWebinar to make money from day one 💰
I took a different approach with my current startup, eWebinar, went purple ocean, and started generating revenue from day one. No customer interviews required, no beta needed.
Purple ocean -- Taking a proven business model (red ocean) and introducing it into an untouched vertical (blue ocean).
I wrote about the 8 reasons we went purple ocean on this LinkedIn post: https://www.linkedin.com/feed/update/urn:li:activity:7123308556900012032
You’ll find the 4 biggest misconceptions and 4 biggest benefits in the above post.
The biggest lesson I learned through all of this is:
If you’re a bootstrapper and/or need to get to profitability quickly, find a product that already exists, one with a meaningful customer base, and make it 10x better. It's much easier to be a second mover than to be first.
Reflections 🪞
Selling a product that no one has bought before is a challenge. The time and energy it takes to open up a new market makes it expensive. But the truth is, the world NEEDS blue ocean companies to progress. Think Uber, Airbnb, and Netflix – can we imagine our lives without those today? I can’t even remember how I used to get home…
We need bold entrepreneurs who are crazy enough to change the world.
The problem with my journey was that I didn’t want to change the world. I just wanted to change my world; I was building companies to live the life I wanted. I didn’t know what we were up against with being first to market and wasn’t prepared for it.
As a bootstrapped company, we needed revenue — and fast, but I chose very slow paths to get there. Eventually, we overcame those things in both companies, but neither of those businesses grew large enough to become truly exciting. That was 10 years of my life.
Maybe you are one of those bold entrepreneurs we need. 🫵
Before going blue ocean, ask yourself:
Why isn’t someone doing this right now?
How much time will it take to make the first few sales, then get to meaning revenue?
How much money will it take to sustain until then, and how do I get it?
Am I prepared for most people to reject me at first?
Do I have what it takes to change the world?
Some stuff you might find interesting 👇
LinkedIn: The 7 limitations that made my last startup a terrible business for me
LinkedIn: The biggest benefit I've gotten from hitting profitability is not money…
Latest episode of new podcast, UnicornPrn: Founder or Fraudster: Con Artists in the Boardroom
Thank you for reading!
— Melissa ✌️
Newsletters I follow (and think you should too) 🗞️
Chris Tottman: The Founders Corner - Bootstrapper friendly VCs sharing actionable advice and guidance at critical stages of growth.
Kyle Poyar: Growth Unhinged - In-depth case studies and deep dives on pricing & packaging, go-to-market strategy, SaaS metrics, and product-led growth.
Leah Tharin: ProducTea - Product-led B2B expert with 25 years of operator and executive experience, curating actionable advice for founders and CXOs who want to connect their product to revenue at scale.
Greg Head: PracticalFounders - Weekly interviews with founders who have built valuable software companies without big funding.
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