Regardless of the approach, an entrepreneur’s initial idea is invariably incorrect.
Since the initial attempt is bound to fail, the audacious ones have the right idea to quickly release products without wasting time over-analyzing. They toss s*%@ against a wall and see if it sticks.
Chemistry ultimately determines the success or failure of a startup. Do the founder and executive team possess chutzpah and humility in equal measures? If so, the team is probably nimble enough to dispassionately recognize failure, pivot, and keep going without losing confidence. Teams lacking this alchemy will either doggedly stick with a losing proposition or cry wolf and give up.
I help teams accomplish their goals without becoming dispirited. I’m not an entrepreneur, but I advise plenty of them. I counsel many young founders who started with a “Fire, Aim, Ready” approach to retool their products for people willing to pay. A CEO recently told me, “I view you as my Eric Schmidt,” flattering both of us. It went without saying he viewed himself as the enigmatic Sergey/Larry and saw me as the boring but steady adult who ruins the fun. I give entrepreneurs enough rope to jump from the ledge and I’m there to yank them back up.
I’ve observed these 10 Sins of the Founders that often prevent success:
1. We’re building a platform
There’s nothing inherently wrong with platforms. In fact, platforms are great because they enable multi-constituent revenue streams. But in the words of a venture capitalist I spoke to recently, “You have to earn the right to build a platform.” He meant that before one attempts to build a multi-sided platform, it’s necessary to first nail the needs of at least one group of potential customers.
2. The money’s in applications, not services
Even technically-minded founders get caught in the application trap, believing a slick user interface is the key to success. This is often not the case. To illustrate: A team of data scientists builds a machine learning-based predictive algorithm that replaces a long-in-the-tooth heuristic solution. They shouldn’t waste their time building it into an application. Instead, they should write a kick-ass GraphQL interface for their APIs and sell prediction-as-a-service.
3. We’re building a better mousetrap
Buyer beware unless the preexisting mousetrap is truly ineffective. Suppose a founder has a brilliant idea about adding structure to video calls. This doesn’t mean the team should waste time recreating all the plumbing Zoom has already perfected. For one, it’s unlikely a startup will ever equal Zoom’s speed and robustness. Secondly, rock-solid performance is merely the table stakes now that everyone’s accustomed to Zoom. Better to integrate with Zoom than rebuild it.
4. We fail fast
I know, I know, we’re all tired of hearing about the Eric Ries Lean Startup concept of failing fast because it seldom happens. More commonly, failure is slow, agonizing, and difficult to recognize. A team in the throes of a death spiral should not keep their heads down and try to muscle it out. They’re better off gathering their wits and finding a new path to survival.
5. Magical Thinking
As a rule, products take longer to build than anyone anticipates and financial forecasts usually fall short. Founders who insist on making pitchbooks with fanciful product roadmaps and magical financial estimates do so at their peril.
6. Excessive hubris
A founder recently told me, “I do value diversity in the voices I ignore.” He was half kidding. Even if entrepreneurs are the smartest people in the room, they often have the least common sense. We all know the risks of following the Pied Piper.
7. Attention Deficit Disorder
I’m not talking about the occasional and necessary zig or zag. Founders who perform an about-face at the first whiff of any new idea drive themselves to distraction and their team to despair.
8. Craving popularity
Being an asshole isn’t a job requirement for an entrepreneur, but it’s not a disqualifier either. Successful founders think differently than others and may not be well-liked, nor should they care.
9. Ill-defined wheelhouse
Show me a team of data scientists building a front-end for their product and I bet they’re unversed in the Jim Collins Hedgehog Concept. Successful entrepreneurs find the intersection of what they love and what customers will buy.
10. Seduction by early customers
Early technically savvy customers are willing to suffer convoluted user experiences, bugs, and workarounds if they find value in the product. Late adopters are less forgiving of these sorts of shenanigans. Early customers validate neither a business plan nor product-market fit.
Entrepreneurship would be simple and more widespread if there were a recipe for success.
Founders must feel their way, sometimes even flirting with the aforementioned sins — like tossing in a degree of hubris, a pinch of magical thinking, and a dose of Attention Deficit Disorder.
Introspective founders recognize their deficiencies and build management teams to fill in the gaps. Moonshot thinking combined with disciplined management doesn’t guarantee success but it provides a damned good starting point.