Startup Survival Guide: The Perils of Misjudging Customer Commitment

An old proverb states, “It’s wise to learn from your own mistakes, but it’s wiser to learn from the mistakes of others.”

This wisdom rings particularly true in the startup world, where mistakes are plentiful. With this in mind, I’m launching a series of ‘startup survival’ case studies to identify common pitfalls and offer practical advice on how to avoid them.

In this first case study, we’ll look at a company I will call “Praxis.” I will let the CEO tell the story himself.

Hi, my name is Keith, I am a first time CEO and this is my story… I started my company a year ago with two co-founders. We started Praxis with a vague concept about helping businesses process orders faster by filling gaps in their existing ERP systems. We lined up two ‘customers’ and secured basic funding to tide us over through the first year of operations. We hired a few developers and set up shop in a local temporary office space.

We were confident we were on the right path because we had solid customer validation and a preliminary thumbs up on our product direction. We took those inputs and spent the next nine months developing our MVP (minimally viable product).

The MVP launch was our first big company milestone. We assumed we would install the MVP with…