Hi Andrey! What's your background, and what are you currently working on?

Hey Failory!

Thanks for sitting down with me to do this interview. It’s great to have an opportunity to do a post-mortem on a failed business attempt and to share my experiences with other entrepreneurs. You are doing a great service to the startup community because it seems that talking about this subject in business is largely taboo.

It seems like there’s a lot of lip service being paid to accepting failure, but in reality, we only tend to tolerate it from people who have already become successful at what they do, and now tell us their war stories. Where does that leave the rest of us who are still trying to find traction?

There’s a martial arts maxim that goes “we either win, or we learn”. I feel that the business world could greatly benefit from adopting that some of that mindset.

A few words about me: My name is Andrey Norin, I am a 35-year-old technologist and budding entrepreneur living in Queens, NY. I work as a senior enterprise technology consultant primarily in the financial services space. Currently, I am regrouping and getting ready to jump into another venture.

About a year ago, I felt the urge to start working on creating my first legit startup. I have read somewhere that it takes an average of 6 business attempts or pivots to hit pay dirt, so I felt like it was my time to get in the game and start paying my dues.

This is where ExploreVR.net comes into the picture. Last summer, I became quite interested in emerging technologies. At the time it seemed like Virtual Reality (VR) was finally getting ready for primetime. That made me want to explore various low-cost business models that I could potentially get into.

Initially, I thought about starting a VR equipment rentals business. VR hardware is prohibitively expensive for the casual user (between $1,500 and $2,000), so I thought about purchasing some headsets and accessories that I could lease out in the short term.

However, after having done the math, I realized that the business model I initially chose was very unattractive. Research showed that margins would be low, the risk of losing the initial investment was high, and the amount of manual labor around inventory management and customer service was unacceptable to me.

So that led me to (what I thought was) a “genius idea”. I understood that not everyone would be as diligent as me in terms of doing the hard numbers in advance and appreciating the risks involved. There would be an emerging ecosystem of small Virtual Reality based businesses such as rentals, arcades, event providers and content creators.

My goal would be to create a specialty directory site, not dissimilar to something like TripAdvisor, but focused 100% on Virtual Reality. Businesses would be able to list themselves for free, and users would go on the site, find the type of VR business they were interested in, leave reviews and book appointments directly from my site. As the site would get more users on it, I would create a paid membership tier that would allow businesses to highlight themselves in search, publish a larger number of events, etc.…

Thus ExploreVR.net was born. I was the founder, the guy responsible for all the successes and the failures of the project.

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What motivated you to start ExploreVR?

My primary motivation to start ExploreVR.net was to create a highly profitable online business. Inspired by the successes of sites like Airbnb, Yelp, and TripAdvisor, I became very keen on the idea of User Generated Content (such as product reviews) as a source of providing value to customers. I thought that if I married some basic information about VR businesses with some user generated content, I couldn’t help but win.

I believe that people appreciate having a central “hub” location where there is a lot of user content on a specific topic along the lines of old-school messaging boards and sites like Reddit. My initial hope was that my topic was niche and timely enough to not have any well-established players already in it.

In early 2017 I volunteered on a grassroots political campaign as a member of their technology team. These guys were doing something I thought was pretty neat. They were using WordPress with a few customizations to create a full-featured online app.

So that got me thinking – I have a core business idea for a product, and a low-cost means of creating that product, possibly all by myself. I made the connection between those two things in my mind and got to work. I didn’t have any previous WordPress experience, but I thought – “this can’t be that hard”. And it wasn’t that hard. Just time-consuming. So, I went for it.

I knew right out of the gate that my chances of success as a first-time entrepreneur were against me, so I decided to do it part-time while keeping my day job. That was a good decision. My standard of living (financially) didn’t suffer, and I got to follow my dream at the same time. That was great.

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How did you build it?

ExploreVR.net was built in WordPress. I started out with a super basic list of requirements. I was going to have a spreadsheet where I would keep all the data about the businesses, and then I would figure out a way to present that data through WordPress as a website. Each row in the spreadsheet would a separate entry on the website. Those were my Version 1.0 requirements.

Later on, I would add forms to the site where users could go to list their business, as well as adding a bunch of other functionality.

Initially, I build the site using a listing engine called Connections Pro. At the time, my knowledge of the WordPress eco-system was very poor, so I kind of went with the first thing that sort of fit the description. Unfortunately, my initial choice of the listing engine couldn’t do about half the things that I later discovered were necessary, so after investing 2-3 months of work into Connections Pro, I had to switch to another engine.

It was really hard to walk away from a site that I’d been pouring my all into, but I realized that it was necessary, so I ended up re-doing the site in much more modern listing engine called Listify. It was totally worth it because this engine could do things like logins with social network accounts, it was fully responsive and mobile-first, and in general, it was a big step up.

The one thing that I did correctly at the outset of the project was to settle on a building methodology. I knew that my set of requirements was fuzzy, so I decided to go with something called the Agile approach. Basically what that means is that I would start with version 1.0 that was super-bare bones, and I would work in small increments to improve it and add features.

Doing it this way would allow me to always have a ready (although imperfect) product on hand that I could show to people. Going with this approach helped me avoid the trap of waiting forever to release a product. A little company called Microsoft is famous for utilizing this approach. It’s basically the process of incremental product improvement over time.

Besides myself, I did have a co-contributor who helped me with working on the site. I partnered up with a designer who helped me with creating graphics such as the logo and helping with some appearance tweaks, like deciding on the right typology, color palette, etc.

Later in the project when I had the need to populate the site, I hired a contractor through Upwork.com to do it. This person did some manual content scraping for me, as well as created many listings. That also helped a lot.

One of my cardinal mistakes (due to inexperience) was grossly underestimating how long it would take to get to an MVP (Minimal Viable Product) that was ready for public use. I was stumbling upon one hidden requirement after another. And it took a lot of time and effort to figure out certain technical issues.

One of my major frustrations with the business is that it forced me into the trap of being a webmaster. That part I legitimately hated because I felt like it was cutting into the time that I should have been spending on marketing and promoting my product.

Ascertaining the technical difficulty of getting something done is hugely important. But…it was a lesson that had to be learned the hard way, I guess.

All told, I kept the costs of the project very low. Because it was a self-financed operation and because I did most of the development myself using off-the-shelf components, I only spent around $5,000-6,000 on the project.

Interestingly enough, the bulk of that budget was spent on food. Yep, because I wanted to spend every waking minute working on my business, my takeout bill went through the roof. Other than that, I did spend a portion of the money on software licenses and business incorporation. But nothing too bad.

Which were the causes of ExploreVR failure?

Me. I was the cause of failure. Or more precisely my lack of experience in creating a business from scratch. Life in the corporate world doesn’t prepare you for that.

I was overwhelmed by the number of new and unfamiliar activities, and I also lacked many critical skills. Learning the required skills while the project was already in-flight proved fatal to its success. While I did end up learning the skills in the process of doing, it messed with the correct sequencing of major phases of business creation. What I mean by that is researching the market should come prior to product creation. In my case, it was the other way around.  It’s embarrassing, but what can you do ;)

Drilling further into the cause of failure of ExploreVR.net, I can attribute it to several major reasons.

Reason 1 – I completely lacked any understanding of how to carry out market research. I simply didn’t have the skills or the requisite background of facts to figure out the supply-demand equation, and whether a business with a compelling enough USP can be created in this niche.

In addition to that, the concept of business positioning was completely alien to me. In essence, I created a business that competed head-on for the same customers as Yelp and Google. That reason alone is enough to sink most startups.

Reason 2 – I had no business promotion skills. When I started the project, I literally had no idea about the strategies and techniques that can be employed to help customers find you.

My marketing game was a fail. Prior to the start of the project, I had heard of SEO and things like keyword research, but I had no idea how to put together a cohesive strategy to attract customers. I am embarrassed to say this, but I attempted to “retrofit” marketing to an existing product. Oyyyyyy vey… (face palm).

Reason 3 – Underestimating the technical difficulty of the project. As I mentioned earlier, I do have a tech background, so I thought I could produce a top-notch WordPress based app within a reasonable amount of time. Well, right now I can, but back then I couldn’t.

Reason 4 – Having an extreme product-focus. Because I was so in the technical weeds of the project it put my focus basically 100% on the product instead of the customer. Major fail.

I had built a site that I wanted to see, without giving much thought or evidence if it’s something my potential clients even wanted. It turns out, they didn’t. But I didn’t have the skills or the insight to find that out in advance of building the product.

Reason 5 – Not talking to prospective customers early enough. This ties in very closely with the other reasons I listed. Had I actually tuned into the customer conversations earlier in the process, I probably would not have ever built ExploreVR.net.

I didn’t spend enough time identifying the problem areas that were pertinent in this niche. Nor did I have a good enough of a gauge to figure out the extent of the pain, and the customer’s willingness to solve that set of problems.

The realization that the project was doomed came on gradually.  As I started to educate myself on marketing and digital service creation, the dots started to connect. It was not an overnight realization, but more of a slow coming to terms.

As a business owner, one of the hardest things to do is to maintain an objective outlook. Passion for your product is actually a detriment in some sense because it blinds you and causes a distorted perception of reality. Once objectivity set in I realized that success was not in the cards because my business was built around a faulty premise.

The problem with my site was that users simply didn’t care to be on it. The few visitors that I had only stayed briefly, and most never came back. I did get some people to sign up for the free tier, but they found the site of limited utility, so the decision to abandon the project was kind of obvious.

By the time I was finished with getting the site to work and look in the way intended it to, I realized that there is no need to continue. The thing was dead on arrival.

I did everything I could and learned a ton in the process, so moving on was easy.

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Which were your biggest mistakes and challenges you had to overcome?

One challenge that I had run into that I didn’t previously consider is platform loyalty. It’s a royal pain in the ass to get people off the platform that they are already using and to get them to start using something else.

There are a number of reasons why that is the case, but the most important one is that you are going directly against the platform’s investment of keeping their users right where they are. The Facebooks of the world invest hundreds of millions to make people stay in-app for as long as possible and actively work to discourage switching to a direct competitor or the use of alternatives.

Another factor that made ExploreVR.net an impossible business was timing. Bill Gross says that timing is the single most important factor in the success or failure of a company. When I started ExploreVR.net I felt that the timing was spot on, but the more I got into the project the more I realized that I was about 2 years too late.

Later on, I learned about the Technology Hype Cycle model (which I highly recommend that anyone working with emerging technologies studies) and it just crystalized exactly how late I was to the party. My gut tells me that if I built the same exact site two years prior, it would have been successful even in spite of every mistake I committed. That’s right, a better timing would have changed everything. Jumping in the same exact niche earlier would have given me the time to correct my mistakes.

Very often it’s far more important to be first, to define the category. Two years ago, I would have had a shot at becoming the biggest site of its kind and delivering value to the users. But I entered the market too late, and as such couldn’t put together a compelling value proposition. As a wet behind the ears startup founder, I was out of touch with the element of timing.

Finally, I’d like to point out one supposedly critical thing that was not a factor – money. I made a decision to be self-financed. To this day I firmly hold the belief that having or not having money doesn’t solve the fundamental business problems. Problems like, you know, your customers not wanting your product….

Would Plankton’s Chum Bucket be a big hit with Bikini Bottom residents if he had 10 branches and a $50 million dollars operating budget?  No, because he didn't sell Krabby Patties.

Also, as the Founder and CEO, you need to be ready to handle money.  This is especially true if we are talking about outside capital.  What assurances do your investors have that you won’t just squander the cash on stupid stuff?

Go and learn with your own money. The magnitude of the lessons learned when playing with your own cash on the line will make you into a stronger business person. You will learn just how irrational you can behave when there is skin in the game. Raising money when you have a solid product that customers want, and a management team that knows what they are doing is not a problem.

Which were your expenses? Did you achieve some revenue? In the end, how much money did you lose?

As I’ve stated before, my total expenses were somewhere in the neighborhood of $6,000. I kept the project costs low because I did most of the work myself. Project duration was about 6 to 8 months, from inception to until I realized that shutting it down was the only way to go.

If you had to start over, what would you do differently?

To be entirely honest with you Rich, I would not change a thing. You need a foundation of experiences, plain and simple. Starting and failing with ExploreVR.net was just how I paid my entrepreneurial dues.

Having said that, if I were to do it over I would:

1. Spend as much time on market research as I did on product creation. Spending 3 months on niche research and testing, doing customer conversations, figuring out how to build a product that customers want and need. Had I done that market research properly I would have never built ExploreVR.net.
2. Come up with a better name! ExploreVR.net was a horrible name for many reasons. For one thing, it’s difficult to remember and easy to forget. There is no embedded benefit in the company name. And under no circumstances should a product that you build end in anything other than a .com, especially if there is already another site with that name. Naming is so very important.
3. Spend much less time trying to be a webmaster. In the future, if I decide to do a similar project I will focus on the marketing research, and then once I’ve nailed that down I will raise the money to hire developers. Or maybe bring on-board a more technical co-founder. Product creation is difficult and time consuming. It cuts into the time you have for important business activities.

During the time that I was engrossed in the project, I was quite worried about having to admit failure to my family. It was a totally irrational thing, as I am a fairly successful guy. But there I was, feeling anxiety about telling them that I am entered a new business, and then having to tell them a few months later that it went belly up.

Sometimes you just gotta learn what not to do.

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Which are your favorite entrepreneurial resources?

I read a ton and I always try to seek out information that would make me better in areas that are critical to entrepreneurs, specifically marketing, selling, product creation, consumer psychology, team management, and negotiations.

Currently, I am exploring the angle of business literature that treats people as emotional and irrational actors. Right now, I am reading “Never Split The Difference: How To Negotiate As If Your Life Depends On It” by Chris Voss. It’s a very cool book written by a former FBI hostage negotiator and it’s full of little tactical gambits that you can bring with you into any area of business to raise up your emotional intelligence.

I read tons of (good) books, take lots of courses, and follow many blogs and podcasts. Actually, I maintain an updated list of all that stuff on my personal blog site.

If you are interested go and check it out at AndreyNorin.com!

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Where can we go to learn more?

Check out my personal blog!

If you are reading this, and something I had said has resonated with you, make sure you leave a comment or drop me a note.