The cofounder of a $1.3 billion startup says a common mistake can kill a new business
New startups are delicate things.
So it's not surprising that the path to establishing a fledgling business can sometimes feel fraught with peril.
No one appreciates this more than the founders of stock trading app Robinhood. Before they got their product off the ground, they struck out on 75 investor pitches. Nowadays, two million people use the app, which is valued at $1.3 billion.
Vlad Tenev, the app's cofounder and co-CEO, told Business Insider there's a mistake that can kill your early-stage startup: focusing on anything but the product.
One such distraction is money, said Tenev. Some founders strive to obtain funding at the expense of everything else.
"They get wrapped up in going to conferences and going to fancy mixers and giving talks," Tenev said. "They don't realize that funding is a means to an end."
Or, as Tenev has experienced firsthand with his Robinhood cofounder, Baiju Bhatt, founders can get distracted by features. He said his and Bhatt's initial mobile app was completely overloaded with features - user profiles, private messages, stock ratings, and more.
"All of that made the value proposition a little bit murky," Tenev said. "Customers were confused about what to use the app for."
The sheer number of features made it hard for their small team to ensure that every aspect was high quality, he explained. Robinhood was born when they stripped the idea down and created an easier-to-use product.
"The initial product was very simple, very understandable," Tenev said. "People got it right away. We were able to build off that as time went on."
Getting distracted by money, by features, or even by the pursuit of success can lead to anything but.
"I wouldn't focus so much on being successful in and of itself, but rather on the process of becoming better every single day," Tenev said. "Become a better planner, become a better thinker, become better at setting goals, and better at executing. And if you can do that for the next five to ten years, you'll be in good shape to create a good business."