Founders looking for guidance are faced with too much information. Google any startup related question and open up a few links, it’s quite likely that you’ll find conflicting advice. Similarly, there’s a good chance that if you go out and ask people yourself you’ll hear opposing thoughts.
To add to the confusion, two contradictory approaches can both seem sound and come from reputable sources.
What should founders do? Who should they listen to? Let’s look at a few examples.
Following customers vs. following a vision
“If I had asked people what they wanted, they would have said faster horses.” –Henry Ford
This quote is often used to argue that customers don’t really know what they want and asking them about it is pointless.
Henry Ford isn’t alone in such thinking. In his 2018 letter to shareholders, Jeff Bezos wrote,
“Market research doesn’t help. If you had gone to a customer in 2013 and said, ‘Would you like a black, always-on cylinder in your kitchen about the size of a Pringles can that you could talk to and ask questions, that also turns on your lights and plays music?’ I guarantee you they’d have looked at you strangely and said, ‘No, thank you.'”
On the other hand, the Lean Startup methodology, which is by far the most popular framework for starting companies, takes a seemingly opposite approach in which customer feedback is the main driver of your product and, in many ways, your entire business.
Should you follow your heart or give customers what they ask for? Do customers even know what they want?
While it would be ridiculous to not listen to the people that give you money, don’t take everything that customers tell you as gospel. “The customer is not always right, but she is always the customer,” says Revett Eldred, a multi-exited founder from BC.
It’s important to realize that what customers say may be totally different from what customers do. Customers are people and people can say weird things—some will tell you they want a horse but then go out and buy a car, and vice versa.
So take everything that customers say with a grain of salt. What matters much more is what customers do, especially with their wallets. If people back in Henry Ford’s time said they wanted faster horses, their wallets certainly said otherwise.
Weathering a storm vs. beating a dead horse
“I’m convinced that about half of what separates the successful entrepreneurs from the non-successful ones is pure perseverance.” –Steve Jobs
Perseverance, grit, and tenacity are some of the most important traits of successful entrepreneurs.
At the same time, having enough self-awareness to say “no” or “enough” is just as crucial.
Where is the line between perseverance and chasing a lost cause? How do you know when to throw in the towel?
As paradoxical as this may sound, having a “never quit” attitude certainly doesn’t mean that you should never quit. Quitting is important. It allows you to direct your limited time and resources to other, better things.
“You could easily be so focused on being perseverant on something that you’re never gonna get and therefore, you’re just wasting months or years of time,” says Chris Barton, founder of Shazam. “I think, ultimately it’s just a judgment issue. It’s a judgment where you’re basically deciding: ‘Is your goal achievable?’ and also, ‘is that goal mission-critical for where you’re trying to go?'”
Impact vs. effort matrix
Unfortunately, there is no universal list of things that are or are not worth chasing. It’s a call that founders have to make, usually relying on two things:
- Effort: How difficult is it to achieve a certain goal?
- Impact: How mission critical is the goal?
While this approach is sound, it’s not always easy to follow because quitting can be perceived as failure, and nobody likes to fail. So it’s important to keep the big picture in mind. To win a war, you may need to lose a battle. Quitting something may be a necessary sacrifice in order to achieve a greater goal.
Innovating vs. imitating
“Good artists copy, great artists steal.” –Pablo Picasso
To outsiders, Silicon Valley is synonymous with innovation. Startup founders are seen as contrarian geniuses who create unique solutions and first-of-a-kind products.
But in reality, the world of tech is full of copycats. For example Instagram Stories and Snapchat, Uber and Lyft, Apple and Xiaomi, Indiegogo and Kickstarter, etc.
Should you take the lead or follow others?
Ideally, do both. Your product should be familiar, but different.
Copying (or “being inspired” as my brother calls it) is one of those things that everybody does, but not many are willing to admit. It’s a safe and remarkably effective strategy. A study of hundreds of companies over 50 years found that 98% of innovation value goes to imitators.
But unless you’re launching a copycat product in a new market, such as the “Uber of China” DiDi or the “Facebook of Russia” VK, usually you can’t just clone a competitor tit-for-tat and expect to take off.
After all, the goal of startups is to figure out how to solve a specific problem in a much better way. That’s the part of your product that should be unique and innovative. Everything else can and should be imitated. Don’t fix what isn’t broken.
Also keep in mind that if you create a better solution and it works, expect to get copied soon.
Too early vs. too late
“Timing is that element of your startup growth mix which is not under your control. You know the ‘how’, but it is the ‘when’ that deludes you.” —Bill Gross
For startups, timing is critical. It may be the single biggest factor, accounting for as much as 42% of the final outcome.
A guaranteed way of not being too late is to be the first. In Zero to One, one of the most popular book on startups, Peter Thiel argues that founders should not enter markets where competitors already exist.
On another hand, the advantages of being first may not justify the risk. For example, Apple is known for rarely being first, and they’re certainly not struggling.
When is the right time to build your startup?
Timing is tricky. The line between being too early and too late is very fine.
Being first can carry a lot of risks. While you may benefit from the first mover’s advantage, you will inevitably make a lot of mistakes that those that come after you can avoid (imitation is highly effective, remember?).
You also run the risk of being too early. The idea for Instagram is obviously very valid, but if it launched five years earlier than it did, it probably wouldn’t have taken off on flip phones. You don’t want to be too late either. An oversaturated market may leave no more room for new players.
Perfect timing, if it even exists, is when the market is small, so it’s easier to dominate due to lack of competitors, but is expected to grow rapidly, which gives dominant players the ability for large scale.
These “ideal” conditions usually occur during major paradigm shifts such as the invention of PCs, the internet, and smartphones. No wonder that every single tech behemoth, without exception, was created during such paradigm shifts.
Unfortunately, the window of opportunity between too early and too late is often narrow and usually only obvious in retrospect, so don’t sweat it too much.
Failure as motivation vs. fear of failure
“Remembering that you are going to die is the best way I know to avoid the trap of thinking you have something to lose. You are already naked. There is no reason not to follow your heart.” –Steve Jobs
Everybody is afraid to fail. This fear can be a strong motivator that can push you to go above and beyond and to be irrationally persistent. At the same time, such fear can be crippling.
Should you be scared to fail?
Think of startup failure like death. The vast majority of startups are walking corpses—dead before they even know it. Everybody knows how ridiculously low the odds for success are, so as weird as it may sound failure is somewhat expected.
If failure is the default outcome, you have nothing to fear. You’ll either become a success and pleasantly surprise everyone, or fail as expected.
That’s not to say that startup failure is a positive event, because it’s not. For most people, it’s a very stressful thing to live through. Since people naturally want to avoid bad and stressful events, such as startup failure, this should be a motivator to give it everything you’ve got. Not only does this decrease the chances of failure, but it also reduces potential future guilt in the case that it does happen.
If you fail, embrace it and move on. For many, failure is an important part of success. Founders of failed startups have a 20% higher chance to succeed in their next venture. So dive headfirst and don’t look back.
People who offer advice are rarely right all the time, and rarely wrong all the time. So take any advice you can get, but filter it through what you know and what you already believe. Just because somebody else did it their way, doesn’t mean that is necessarily the best way for you. But it might be. And even if it’s not it might trigger ideas that you haven’t considered.