The Hardest Types Of Startups
Source: Medium, Aaron Dinin, PhD
Photo: JESHOOTS.COM on Unsplash
“So… how are things going with your startup?” I asked. I was meeting with a group of five young entrepreneurs who, six weeks earlier, had come to me with what they believed was a brilliant idea for a new startup.
When they first pitched me their idea, I admit I was skeptical. But it’s not my job to tell people whether their startups are good or not. That’s not what good startup mentors do. Instead, I tried to steer them toward figuring out for themselves whether or not it was a viable idea by encouraging them to research the opportunity. “Research then build,” is what I often tell the entrepreneurs I advise. “It’s always better to discover there’s no market for a product before you spend any time or money building it.”
They took my advice seriously. They committed themselves to understanding their market, and they began conducting dozens of interviews with potential customers. In other words, to my knowledge, they were doing exactly the right things.
Still, something seemed unusual about the meeting. The way they requested it suggested there was some urgency. They’d asked to meet “ASAP.” And it was the first time all five team members had shown up in my office together. In the past, I’d only ever met two or three at the same time. In other words, they were either preparing to tell me something really good or really bad.
“Well,” began the student who seemed to be the de facto leader of the group, “We wanted to talk with you about our progress. It’s been more difficult than we expected.”
“That happens a lot,” I said, trying to be encouraging since she was clearly hesitating. “Startups are hard.”
“Yeah,” she said with a sigh. “So… we’ve spoken with lots of people. And they weren’t as excited about our idea as we were. I mean, they didn’t hate it, but we kind of thought they’d immediately want it. Instead, they either had lots of questions for us about how it would work, or they brought up lots of concerns.”
“That’s great!” I reminded them. “That’s exactly why we talk with potential customers before building things. So, now that you’ve talked with lots of people, how are those conversations changing what you’re building?”
She hesitated again. “Well,” she began, still looking more nervous than I’d expect considering the information she’d delivered. “Right now, things are starting to get really busy for some of us, and we were thinking about putting the project aside for a little while.”
“But just temporarily,” one of her teammates quickly added. “In a month or two, when our schedules slow down again, we’ll start working on it more,” she assured me.
“Why are you putting the project aside…” I started to ask, but before I could complete my question, the team leader spoke again.
“We haven’t fully decided yet,” she interrupted. “It’s just something we’re thinking about, so we wanted your advice on it. If you think we should keep working on it, we will.”
The relation between startups and entrepreneurship
I wanted to laugh. I decided against doing so only because it was clear how genuinely worried they were, and I didn’t want to trivialize their anxiety. Still, I thought the situation was funny. This group of young entrepreneurs was so afraid of not turning their idea into a startup that they had to convince themselves — and me — they were merely “putting the project aside” for later. They were certain they’d come back to it when they had more time.
They clearly didn’t understand or appreciate the true purpose of entrepreneurship and building startups. Real startups aren’t projects entrepreneurs come back to when they’ve got more time. They’re not like model airplanes sitting patiently in a box, waiting for someone to assemble them when they’re ready.
In other words, startups aren’t hobbies. They’re not things that entrepreneurs begin working on in their spare time for entertainment.
Instead, startups are things entrepreneurs sometimes create as a way of addressing a market opportunity that gets identified during the entrepreneurial process. Only then, once entrepreneurs have found a market opportunity and they’re certain it’s worth the effort to chase after it, should they launch a startup. By that point, the entrepreneurs should be so committed to what they’re working on that they’re going to pursue the opportunity to the end: either a successful venture or a failed company. Either way, there’s no putting it aside and coming back later.
Failed ideas are not failed startups
“No, that’s not what I meant,” I assured the group who’d thought I was telling them to keep working. “Why are you putting the project aside rather than just quitting? Why bother coming back to it?”
The entire group looked at me as though I’d grown a second head. Clearly, I’d not given them the response they were expecting, and I was pretty sure I knew why. They were concerned about disappointing me as though I was the key stakeholder in their venture rather than themselves. But, of course, that wasn’t true. It was their idea, and I was only offering advice. Unfortunately, the only person who realized that was me.
Since none of them seemed to know what to say, I responded to what I assumed was on their minds. “I’m not your boss,” I reminded them. “And I’m not your teacher or your investor or even your potential customer. And even if I were any of those things, it wouldn’t matter. It’s your idea. That means you decide when it’s not worth pursuing.”
“But how do we know when it’s not worth pursuing?” asked another team member.
“You’ve already told me it isn’t,” I suggested. “The minute you decided it wasn’t your top priority was the minute it wasn’t worth pursuing.”
“But we’re all just really busy right now,” the team leader assured me. “That’s the only reason it’s not our top priority.”
“And that’s great,”I responded. “That tells us everything we need to know about the idea.”
“It does?” she asked. “How?”
“You’ve spent the past six weeks doing research,” I pointed out. “And in that time, how many potential customers have you spoken with?”
“Almost 100,” someone else in the group chimed in.
“Almost 100!” I repeated. “And during those nearly 100 conversations, not a single person’s response made you excited enough to make this idea your priority. What does that tell you?”
The team looked at each other for a few moments before the leader responded for them. “That this isn’t a good idea,” she replied in a tone that seemed more like a question than an assertion. But that was good enough for me. They were clearly starting to see the issue.
“Exactly!” I said. “This project has had an amazing outcome. It’s been a huge success.”
“It has?” someone asked.
“It definitely has,” I replied. “Six weeks ago, you sat in this exact office sure you’d just dreamed up the next world-changing company. Do you remember what kinds of questions you were asking back then?”
“We wanted to know about incorporating,” said the team leader. “And we also wanted information about manufacturing in China.”
“And how to file for patents,” added another team member.
“Those were exactly the things you asked about,” I said. “And what did I suggest you do?”
“You told us to go interview potential customers,” said the team leader. “And that’s what we did.”
“And it was a huge success,” I added with a smile. “The things you were in my office talking about six weeks ago would have cost lots of money. Who knows how many thousands of dollars you’d have needed to spend on manufacturing. Heck, a patent alone would have cost you at least $10,000. What would have happened if you’d done those things first?”
They all looked at each other and chuckled. They were finally starting to loosen up. “We would have wasted lots of money,” said one of them.
“You would have wasted an awful lot of money,” I emphasized. “And lots of time, too. Instead, here we are, six week later, and you’re moving onto other things. That’s a great outcome.”
“But we failed,” said the team leader. “How is that great?”
“Failing isn’t inherently a bad thing,” I reminded her. “What’s bad is how you fail. Did you fail after wasting tons of time and money? That’s problematic. Did you fail because you couldn’t put the right resources together to execute? That’s not great either. Did you fail because you did something illegal and got in trouble? That’s really bad. But failing because you carefully assessed the market opportunity and quickly realized your idea wasn’t something people wanted? That’s a great way to fail. In fact, it’s the best way to fail. That’s the kind of failure we all need to celebrate.”
When not starting is harder than starting
A few minutes later, the team left my office much happier than how they’d entered. But, if I’m being honest, the conversation made me a bit sad. It reminded me of one of the biggest misconceptions about entrepreneurship. Too many people believe the purpose of entrepreneurship is to launch startups and build companies. But that’s the misguided, 21st century version of entrepreneurship that’s been hyped up by popular culture and media.
Instead, entrepreneurship is about identifying problems, determining the best way to address them, and then taking the appropriate action. True, sometimes, the best way to address a problem is to launch a startup that becomes an enormous company and turns the problem into a source of cash flow, profits, and jobs. When that’s the case, we can certainly celebrate startups that become successful companies.
Other times — in fact, lots of times — the best way to address a problem is to do nothing because the entrepreneurs researching the problem couldn’t find a viable and sustainable way to solve it. When entrepreneurs figure this out, we should celebrate them just as much as we celebrate billion dollar exits. Those kinds of entrepreneurs are just as entrepreneurial as the people who build companies.
In some ways, maybe they’re more entrepreneurial. I’d argue that entrepreneurs who believe they’ve found a great idea, research the idea, and then don’t launch are more successful than entrepreneurs who launch startups that fail. After all, doing the work to discover that your great ideas aren’t going to turn into great startups is often harder than just starting a startup without ever bothering to figure out if people will want what you’re building. In that sense, maybe the hardest types of startups are the startups you never build. They’re the startups you figure out aren’t great ideas before you actually start them.