You’re quickly discovering that many people are coming along with you for the startup ride: your friends, family, business partners, investors, cofounders, employees, and more. And they’ve all got something to say.
Who should you listen to? How much of what they’re saying is true? What does it all mean?
Three years after starting my first company and two years into my current startup, Wanderfly, I’m still trying to make sense of everything, but there are 10 questions and statements that just seem to come up over and over again. Let me provide a bit of a reality check and decipher what it all actually means to you.
Your MBA friend will say: “I hope you’ve written a serious business plan. You HAVE done that, right?”
Actually: It’s a delicate balance here. On one hand, your b-school friend is right in that not every idea is gold; what YOU think is a problem that needs fixing might not actually be a problem for the vast majority of people. Or, a gazillion startups have already done what you want to do and you’re about half a decade too late (oh, you haven’t heard about this company called Facebook?). Or, your amazing concept is going to require a budget only Bruce Wayne could finance and, to boot, it’s not going to make back any money in your lifetime.
Whoops. If only you had taken the time to do a proper SWOT and financial model.
Conversely, one of our investors, Jason Calacanis, is famously against business plans. He’s got a point. Thinking about it means not doing it. Words can’t compare to a real product. No amount of analysis will prepare you for the real world. And your brilliant idea will change three times. At least. So, why are you wasting your time predicting the unpredictable?!
My advice: Do something in the middle. Talk to everyone you know and make them grill you until you have answers for every major section a business plan covers–product, market, distribution, competition, revenue, etc. But don’t spend an extra second making it pretty and fussing over whether it should be written “We” or “The Company.” Write it in bullets if you want. If your idea still looks good in that format, get moving: The quicker you execute on it, the better.
You’re probably wondering what we did for Wanderfly. On a whim, we entered a business plan competition and wrote a beautiful novel that took a week of three people’s time. About half of it is relevant today. Looking back, we could have spent most of those 200 hours discussing instead of writing.
Your parents will say: “If you’re itching for a change, have you considered grad school?”
Actually: Okay, this is a sticky one that not everyone will appreciate, but here goes: You will learn more in a startup than you will ever learn in a classroom. You’ll learn through doing, through figuring out something by yourself because nobody is there to hold your hand and through being the company’s salesperson, programmer, designer, accountant, and lawyer–all at once. Even if it ultimately doesn’t work out, you’ll come away with an experience unlike any other and more skills in your back pocket than your fellow grad student (and, if you do decide to go back to a corporate job, you may find out that you’re more marketable than ever).
Some caveats. Go to grad school if you’re switching careers entirely and need the fundamentals. Go to grad school if you just love to learn in a structured environment. Go to grad school if you mean medical school. Please.
Don’t go just because you don’t know what else to do. There are other ways to find out, without the $100,000 price tag.
Your ex-colleague will say: “You’re so lucky to be your own boss!”
Actually: It’s not all it’s cracked up to be. You often feel stressed. Tired. Insecure. Disappointed. Anxious. Panicked. Confused. The lows are as violent as the highs and if something fails, who else do you have to blame? Responsibility is a double-edged sword.
What’s more, all the high-level whiteboard strategery you did in your fancy Aeron chair at your last corporate job hardly applies now. You will be doing junior-level work. You will be mopping your office floor. You will be working longer hours. You will feel bad for taking vacation (and so you might not take it even if you started a travel company, ahem).
But maybe that’s partly why you do it–because there are no rules or glass ceiling. Nobody there to tell you what you can or can’t do, and nobody there to take the credit when you do make it.
Your engineer friend will say: “Marketing is a crock. If you build it, they will come.”
Actually: Well, no. They may not come because they have nowhere to find you. Think about it: There are 40,000 products in the typical supermarket; 150,000 new URLs are registered each day. Whether you’re launching a new granola bar or a website, there are hundreds, if not thousands of similar companies all up in your space. Your new company–NO MATTER how awesome it is–starts out as a needle in the haystack.
It’s up to you to help people find you. Marketing is not all subliminal messaging or selling newborns candy and ciggies. Marketing is market-ing: bringing your product to market. You market yourself when you tell someone about your company; when you strike up a distribution partnership with another company; when you invite beta testers to try your product; when you email people to announce news; when you give people incentives to tell other people about you.
Great companies have marketing intentionally built into the DNA of their products. YouTube’s video sharing, Groupon’s group buying, Method’s stunning packaging, Dropbox’s shared folders, Kickstarter’s crowd-funding. Maybe you didn’t realize it, but just by using them you’re part of their marketing team. Clever.
Your wantrepreneur friend will say: “Reporters and venture capitalists are sacred. It’s a real privilege to get their ear, so make sure it counts if you’re so lucky to get the opportunity.”
Actually: It’s not a privilege, provided you have a good story (which of course you do!). It’s much more of a two-way street: You need them and they need you. Reporters need new stories to write, or else they’re regurgitating the same boring stuff. Investors need companies to fund, or else they’re just sitting on cash.
A couple months before we launched Wanderfly, some PR folks advised me to dress in my finest and prepare a gift bag for my meeting with Well Known Writer from Well Known Magazine. Nervous as hell with branded mugs and T-shirts in hand, I arrived on the 40th floor only to find her sitting in a small cubicle strewn with papers and empty cups of coffee because she was cramming for a deadline. It dawned on me: Well Known Writer was just a normal person. We had a normal conversation. I didn’t even leave behind the gift bag.
Same goes for investors. The ones who act like they’re doing you a favor by gracing you with their holier-than-thou presence are not doing you a favor at all; they’re wasting your time.
Your prospective investor will say: “Another startup is already doing something like that. And what about [insert Fortune 500 company here], who launched your entire idea as just a small, little feature within their much larger site last year?”
Actually: Being first-to-market RARELY matters. Facebook crushed Friendster. Apple copied Xerox’s graphical interface. Remember Lycos? Oh yeah, Google launched years after them.
In my industry (online travel) alone, you might know Expedia, Travelocity, Orbitz, Priceline, CheapTickets, Hotwire…the list of seemingly similar companies goes on and on. Who knows who was first-to-market, but moreover, who cares? They all seem to do just fine.
Instead, one thing really matters: the market opportunity and your execution against it. Is there a problem that remains largely unsolved, despite all the incumbent players? How well does your solution work? Is the user experience more seamless than others out there? Is it more enjoyable to use? (And, of course, will someone somewhere in the mix pay for your solution?)
When we came up with the idea for Wanderfly, many told us one-of-the-aforementioned-large-companies would eat our lunch because they already had a similar travel inspiration tool as a tab on their site. We still went ahead because we knew we could design something that would simply be better and we could innovate light years faster. Now, we are rarely compared to this giant, and when we are, it’s because someone is saying we’re doing a better job. Our execution is so different that it, in and of itself, is reason enough for people to turn to us.
Your prospective partner will say: “This sounds interesting, but we’re a bit slammed right now with our annual planning cycle. Maybe we should reconnect in six months.”
Actually: Kind of like dating, “maybe” usually means “no.” Hate to say it, but someone–whether a potential partner, investor, or hire–who doesn’t want to move forward quickly probably isn’t going to move forward period. Or at least not in the compressed amount of time you have as a startup.
Not much more to say except, move on to the next.
You and your cofounders pre-launch will say: “Google will TOTALLY buy us this time next year.”
Actually: Acquired in one year? Pshaw. Maybe you’re dreaming of a scenario like AOL buying About.me four days after it launched. Continue dreaming. Truth is, you’re not them and you probably won’t be able to pull that off.
Even if Google calls you up in your first year, it’s likely more to say hi and start getting to know you. It’s not to hand over a giant Publishers Clearing House check on first meeting.
Value takes time to develop. If you create your startup with the intention to sell it off immediately, it’ll probably show. It’s not attractive to your customers and not to some potential acquirers either, who are really looking for a sustainable business with a strong team behind it. So, build the most valuable business you can–a business that scales with your customers’ wants.
You and your cofounders post-launch will say: “CRAP. Look at what they’re doing! Look at how fast they’re moving! Look at their amazing press!”
Actually: This one is true. You will find yourself saying/thinking this a lot. It’s mostly unhealthy and you might want to keep it in check while you can.
“Good artists copy; great artists steal,” said Picasso. Or was it T.S. Eliot? Or Steve Jobs? Either way, you can only do this if you keep your finger on the competitive pulse. As a result, you might develop some Entrepreneur Envy in the process. A small dose of EE is good. A large dose of EE is self-destructive and will pull you and your teammates down, setting you all up for a fun bi-weekly emotional breakdown.
“They” will always be up to something. As will you. And you know what? They, too, are flipping out about all the new and shiny things you’re doing and they too are having a self-doubt mini crisis reading about all the accolades you carefully fed to the press. Worry too much about what everyone else is doing and you’ve now wasted time on what you are going to do to make it better. Refer to my earlier points. (Why hello, Competitor X reading this article. Check me out on Fast Company!)
Your impatience will say: “Let’s hire that rockstar coder. I heard he’s an ass, but we need to get the job done.”
Actually: Nothing matters more than the people you work with. Please refer to this piece by one of my partners in crime.
There you have it. Whether this has been frightening or comforting for you, I have no idea, but I hope it prepares you for what to expect. Now, if you’ve learned anything at all from this piece, stop reading and get on with your idea.
Author Christy Liu is the cofounder and director of marketing at Wanderfly.
[Image: Flickr user Tayrawr Fortune]