Here’s a short list of the things I thought at one point which aren’t true.
- Startups are about high technology. False. Startups are about making things that people want that scale. Yes, technology can help you scale, but it’s not required
- Startups are all about hard work. False. Yes, startups require hard work, but there is also a luck element too (This is the main reason most of the other things I knew to be true weren’t)
- You have to have a cool idea to make a lot of money in a startup. False. “Business Porn” has been sold to me since I was a teenager. The idea that cool businesses are also are very dramatic — great idea, super-cool founders, overcoming impossible odds, having something special about them that nobody else has. Hollywood and the book industry love this stuff, and it’s ruined millions of people’s ideas of what startups and business is all about. Most all of the time, it’s just work. Sure, it’s work you love, but lose the dramatics and focus on execution. Ideas are useless. It’s all execution.
- Venture Capitalists accept plans over the net. False. Ask some VCs when the last time they took a bet on something they got over the net. Like never. If anything, they keep these web forms open as a way to figure out who to ignore. if you fill one out, they know that you have no idea how funding works, so they can permanently forget about you.
- VCs actually know what the hell they are doing. False. Stats show that your company is no more likely to be alive after five years if you take VC money or not. Sure, if you take the money you might grow. You’ll have to grow or die. Most exercises in funding are social in nature. That means you know somebody. Some professor you know refers you to a fund, or you go to Y Combinator and make the rounds. VCs make money based on what all the other VCs are thinking and doing. Raising money is a cross between a beauty and popularity contest.
- If your friends like the idea it’s pretty good. False. Your friends are your friends because they say nice things to you. This is true whether they’re hackers or not. What you need is customers, not friends. Get as close to the customers as you can. Live with them. Find out what they think.
- Facebook, Twitter, and Apple can help you grow. True and False. Yes, if you win the lottery (or spend a huge hunk of time learning how to social engineer a great product), these services will let you gain a lot more traction than just being out there on the web. But apps are a sucker’s game: for every one guy posting how he made 100K there’s a thousand guys making nothing. Even if you succeed wildly, you lose. The owner of your walled garden is just going to incorporate your app into their base product.
- Most startup founders will not tell you how they succeeded. Mixed Bag. The technology startup sector is tremendously more open than any other sector, so it’s false. Startup founders are usually more than willing to go on at length about how they did it. The crazy part is that most all of it is so unique to their particular idea, team, location, and time period. You’ll be lucky to listen to ten hours and pull 2 ideas out. Are there folks who will look at many startups and try to generalize for you? Sure! Several dozen folks. All with books, or podcasts, or seminars, or classes. There’s an entire industry out there based on you wanting to have a startup. It will bleed you dry and you’ll be no closer than when you started. Don’t be the fat guy reading Running World buying 300-dollar sneakers.
- Most successful startup founders know how they succeeded. I do not believe this to be a true statement. They know what worked at that particular time. They probably know why it worked. But once again, this is so contextual and people are so prone to overgeneralizing that the signal-to-noise ratio here is massively lower than it appears on the surface.
- The best way to vet an idea is to ask other successful startup founders. Here’s where we take what we already know — there’s a lot of luck involved, advice is highly contextual, and don’t ask your friends — and add it together. The worst thing you can do with an idea is listen to others. Take the same hour you would ask and receive advice and go ask a potential customer. Find somebody who might want what you’re making. Do they like it? Would they give you money for it? If the answer is “yes”, then it doesn’t matter what all the successful founders in the world tell you. If the answer is “no”, then ask why and get real feedback from the people you’re trying to help. People can stand around the internet water cooler all day long and speculate on what might work or not. But you’re not getting anywhere. Developing a startup is about learning from the marketplace. What are you doing to learn from where it matters?
ADD: You might think that this post is terribly pessimistic. It’s not meant to be. In fact, I think the social nature of hanging out with other founders might drive out huge benefits for the new entrepreneur. I’d just be careful confusing implicit knowledge and social contacts with explicit knowledge and tactics. We focus on the explicit, the tangible, the teachable. I don’t think that’s where the good stuff is.If you've read this far and you're interested in Agile, you should take my No-frills Agile Tune-up Email Course, and follow me on Twitter.