Writing a post-mortem when your startup reaches the end of the road is a critical way of understanding what went wrong and determining how to best adjust your strategy to prevent the same fate from occurring in your future business.
But even for the most experienced founders, it can be difficult to face the ugly truth and admit the shortcomings that ultimately caused your failure. That’s why I asked nine members from Young Entrepreneur Council (YEC) the following question:
I’m thinking of writing a post-mortem of my startup as an exercise for my team so we can anticipate and solve problems better. What should I include and why?
Their best answers are below:
1. Recurring Patterns
When you look back at what went wrong, try identifying recurring patterns that stunted growth and contributed to your downfall. Knowing where the roadblocks were and the issues that caused them will give you the perspective you need to avoid those same problems moving forward. Be brutally honest with your team and with yourself. – Danny Wong, Grapevine
2. Your Points of Highest Leverage
I wrote a post-mortem in the spring of 2014, as we’d been struggling for a few months. My goal was to look at the hard truth that we were losing money rapidly and ask, “If we could change anything today to help us survive, what would it be?” While going through the exercise revealed a lot of answers big and small, what made the biggest impact on our company were the high-leverage bets. We’ve since focused only on those activities and have yielded big results which have helped us not only survive, but thrive. – Aaron Schwartz, Modify Watches
3. All Assumptions That Were Made
The best thing to do in a post-mortem is to list all the assumptions you made when you started the company that were false. This way you can identify where the gap in your thinking was and how you can find a better solution. Most companies fail because they either did not execute on something properly or they made an assumption about the market that was not true. By looking into the assumptions you made that were false, you will be able to better address the problem and learn from these mistakes. – Randy Rayess, VenturePact
4. Solutions Versus Problems
Perform an analysis of the solutions your product or service offered, and what was the actual real-life pain point or problem they were supposed to solve. It’s a useful way of thinking about past mistakes that can train your mind for the future. A lot of the time, when you look back you’ll see that much of what you thought was a solution didn’t have an existing problem that it solved to begin with. If the solution did solve a problem, analyze why consumers couldn’t see the value. Plus, if the market ever changes and that problem actually does occur, you’ll be primed to identify it and revive the part of your business that arrived at the wrong point in time. – Jared Brown, Hubstaff
Frame the challenges that you encountered as different puzzles or “business school-esque” case studies that could be solved with many solutions. Divide your team into small groups and have them tackle the challenges as if they were in your shoes. You will not only learn how your team thinks but also discover different ways to approach similar problems in the future. – Firas Kittaneh, AstraBeds
6. Big Bets That Failed
What were the biggest bets that you made that did not work out? This is where you can find the most opportunity for learning. Assess why you thought it was a good bet in the first place. Then, describe the process for executing on that bet. Finally, analyze the reasons that it did not work out. This approach will show you whether you made mistakes either on the execution or the assessment of the opportunity, and help you focus your efforts more effectively the next time around. – Sathvik Tantry, FormSwift
7. Managerial Issues
As we have found time and time again, bad management leads to unhappy employees, which in turn leads to an unsuccessful and unhealthy work environment. When evaluating why a startup has failed, it is a must to look into managerial practices and what might have gone wrong between members of the team. If there was poor communication, micro-management, a lack of employee rewards or even empowerment, success and growth may have gone south when employees lost motivation or sight of what needed to be accomplished. These problems within management should be pointed out and discussed so that they can be solved for the future. – Miles Jennings, Recruiter.com
8. Product-Market Fit
Get down to the basics with why it didn’t work out. At the simplest form, it’s because you don’t have a market or your product isn’t the right fit for that market. So, it’s best to review your processes for arriving at your final product solution and how you came to understand your customer’s needs, or not. Next time you should start with solving a simple problem, that a certain type of person has, then build a product while getting close to and understanding this audience. – Andy Karuza, SpotSurvey
9. What You Did Well
Avoid being overly critical and give your team the credit where it is due. Post-mortem can become extremely negative and demoralize the team, so balancing it with some appreciation of the jobs well done can go a long way. Moreover, the team should know what they did right, so that they do not lose sight of the positives and continue to exhibit those behaviors. – Pratham Mittal, VenturePact
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