Over the past decade, I’ve spent most of my professional life building startup businesses. In thinking about what I’ve learned, I realized that the most valuable lessons can be boiled down to three simple lessons:
- The middle sucks.
- Your idea doesn’t matter.
- There is no secret to startup success.
The middle sucks
Most startups die before launching because they get caught in the “valley of death.” The startup “valley of death” lies in between startup success and startup failure and it’s the worst place to get stuck.
Startups get stuck here because they usually fail to raise money and exhaust their finances by spending time on useless business plans and demos.
Business plans are always wrong so stop obsessing about them! And, unless you can pitch a demo as well as Steve Jobs, you are not going to persuade anyone to invest in your startup using one.
You can only raise money by pitching the “Dream” or by selling “Traction” (post on this coming soon). So either bootstrap your startup or raise money in the early “dream” (no code, no plan, just a dream) phase or in the “traction” (the model is working) phase of your business.
Your idea doesn’t matter.
Like almost all startup founders I spend way too much time obsessing about my ideas.
Guess what? Nobody cares about my idea, and they don’t care about your idea, either. Nobody.
People are selfishly motivated first and foremost — they want to know how you are going to help them, not what you think would be cool to build. I never fully understood this until I read The Del.icio.us Lesson by my Performable co-founder, Joshua Porter. Focus all your energy on solving a critical problem. Forget your idea.
Read 3 Warning Signs that Your Product Sucks for clues on whether the problem you’re solving is critical or not.
There is no secret to startup success.
This is where I see most startup wannabes spend all their time. They are so paralyzed by the fear of failing that they spend every waking moment reading Techcrunch (don’t do it, please) and other blogs, reading countless books and attending startup events all in the quest to learn some “secret” they think is going to help them succeed.
Believe me failing sucks really bad but there are no repeatable patterns that lead to startup success. None. Stop looking for one and just f***ing do it (#JFDI).
Starting is the easy part, building a valuable business that people actually care about is really, really hard and humbling. Focus on creating a product that people truly care about and on distributing and monetizing that product.
Note: These lessons originally appeared in my Creating a Data Driven Startup presentation from September 2010.
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{ 21 comments… read them below or add one }
Very interesting analysis.
I agree with most of it.
Great tips David! I think the middle is also tough because you can get stuck in ruts where there is little to no growth, and that can be extremely discouraging.
I’ve seen this scenario so many times meeting first-time founders.
They haven’t learned how market to customers (who don’t care about their product) or generated any scalable revenue with something they built – yet they obsess over decks and pitching investors.
At startup school I met a Stanford student who said hes not interested in YC because he didn’t want to give up 6%. He had this elaborate argument against it – then he told me he had not even attempted to build a company yet, he’s still “planning it out”.
He wasted so many cycles thinking about investment for his company was non-existent.
The only ones who get by on a dream are the ones who are connected or have past experiences. Everyone else needs to first: go out and get shit done.
Great post/talk.
Drunk with startup excitement, this was a sobering read. Thank-you man.
Great article. I could not agree with you more.
Elaborating a bit on the “stuck in the middle” notion: I’d advise not making the mistake of having a business that is too “expensive” to not need capital but not sexy enough where investors are going to throw money at you. Being stuck in the middle is painful. Either design your business so you can bootstrap it — or make absolutely sure you’ll be able to raise the capital you need. (And, the only way to be absolutely sure you can raise the capital is to actually have the wire complete and see the money in your bank account).
Thank you so much for saying there are no repeatable patterns. The repeatable pattern is to break the pattern and be unique and original. This is what so many investors and MBAs and “business people” I meet fail to realize. They all live with this fantasy that somewhere, somehow, there’s this magic formula for successful new businesses. Some formula that will remove people who really know something or really create something from the equation. Like mass production for startups.
I particularly like your first point.
On the third point, here is my 2 cents. Doing is good. But how you do it is just as important. While there is no formula for success, there are surefire ways for failures and better bets for success.
Amen brother
Nicely put my friend. On #1, I thought you were going to go somewhere slightly different which is that the middle sucks because (a la Seth Godin) if you are not remarkable on any dimension, you will be condemned to dying slowly from lack of interest on the part of customers, users, investors. But your #1 makes a lot of sense as well.
And as for #2 and #3— absolutely 100% true in my 15 years of bumbling around the varied (and non repeatable) paths of the startup experience.
David, 3 awesome points; well put.
#1 sounds similar to Dave McClure’s “people can love you, or people can hate you, just don’t be irrelevant” perspective.
Regards,
DROdio
Ah!
and i’m sure my startup is not gonna fail 
(http://restaurant.welltreat.us) because i don’t fear about failing.
i agree with you
like you said, i don’t care about formal presentation, just relying on my passionate talk (wanna be steve jobs;). i’m still learning how to talk with none tech guys. how to make sense to them through relating their daily life stuffs!
let’s see how long does it take to put me up somewhere so i can write blog post like yours
best wishes from bangladesh
Actually, I disagree. I’ve been doing this start up thing for quite awhile myself and I think the most useful template for success is Geoffrey Moore’s Crossing the Chasm. It may seem dated in it’s examples, but the structure is definitely there. No, you are not unique–get over that illusion–every successful company goes through similar phases. Read it again.
Thanks for this clear overview on how to move fast from the Valley of Death. I am always thinking about what steps are made on the wrong path when trying to launch a start up, and the answers are clear: you need to do it and not spend time on planning and concepts.
The idea of selling a dream is more valuable than writing and re-writing business plans.
Thanks for the fresh air.
I don’t thing ideas were only meant for solving “critical problems”, most of the times they are just the catalyst of The über Solution. All these baby steps ideas are important by themselves and profitable for a period of time, time you can spend on envisioning The über Solution and start moving your assets in order to get there first.
But again, I might not be right on any of the above as yesterday we just ended (after one year on “remote control”) one of the startups I had more emotional attachment to, so maybe is too eary to comment. Yet…
I would love to hear your thoughts about shipping /pre valley of death: JFDI?
“valley of death” happened to me twice. You are absolutely right about raising money. Either do it in the “Dream” stage or by selling “Traction”. This is the worst scenario.
Pitch plan for 3 – 6 months while nobody works on sales
1) Have a great idea and plenty of enthusiasm
2) Bootstrap business
3) Build a pretty good product
4) Sell a few
5) Sales team loses steam
6) Panic
7) Devise business plan to try to raise money
9) Deadpool
Great blog, David, and so TRUE!
Thanks Yelena! Appreciate you stopping by.
David
Great blog, David. It is nice to see that you take an honest approach when talking about startups.
David,
I love this post. Everything you wrote is completely true.
Thanks Conrad! I dig your blog.
;dc
Spot-on with knowing the motivations of other people. That part is reminiscent of Dale Carnegie’s “How to Win Friends and Influence People” which I’m now rereading and it’s giving me a good a**-kicking.
And with the valley of death, I think it also gets lots of start-ups after the launch, when sales are slow and there’s the constant question, “Will this pick up? Or does our product suck?” That’s a really paralyzing time.
Thanks for this,
Drew