The Rumors of Our Death Have Been Highly Exaggerated
Over the last week or so, with tremendous, and often scary turmoil, in the financial markets, we’ve seen a outpouring of both solicited and unsolicited “guidance” on how the future should be handled, specifically with regards to startups, their founders, and their prospects.
I’m writing more of a reflection on the entire mess, than to provide some tactical advice on just how to succeed. The formula for success looks the same no matter where you go: Spend less, Sell more, blah blah blah. Of course everyone knows that given precisely the same recipe, one hundred unlikely chefs will produce one hundred seemingly different dishes. In other words, use the formulations as best you can - but don’t count on them saving your ass.
Sequoia seems to have kicked off the round of reflection as its internal meeting notes were spread across the net. They outline several things that their startups should start to (channeling GigaOm here):
Cut spending. Cut fat. Preserve capital.
I use this analogy often. Your startup is like a car and it's your job to keep it running. That means you have to find the means to keep the gas tank full, you have to know when to make improvements so it performs better, and of course, you have to know not to take it off-roading when it was designed to run on the highway.I’m not worried by this guidance for one simple reason - most entrepreneurs know better. I work with startups all the time and getting them to part with a dollar is often the hardest thing in the world. In fact, they live by this creed so closely that often they make really BAD decisions as a result - penny wise, pound foolish and all.
If you’re a startup and haven’t realized the air conditioning is on and the windows are open, well, you’ll either learn that lesson very quickly or you’ll die from heat exhaustion anyway.
Throw out the models and spreadsheets, because all assumptions will be wrong.
This was probably true the moment you committed that model to a spreadsheet to begin with. Most everyone who's built something from the ground knows that your nimbleness is what gives you an edge on the entrenched players.Flexibility is and always has been an asset for the entrepreneur. The challenge, of course, is knowing when to stick to it long enough and when you have to kill your baby. As creators of things new and shiny, it’s hard to break free of the charm and dazzle our inventions provide us. Successful entrepreneurs have always had the ability to track external factors as closely as they track their own progress and evolution.
You should always assume your assumptions are wrong. You should always be working towards proving them right.
Focus on quality.
Are we building sweatshops in a third-world country? When did it ever be preferred to NOT focus on quality. There's all sorts of quality, of course. There's quality in terms of the underlying code/construction. There's quality in terms of the presentation/marketing. And then there's the only measure of quality that matters - the measure of quality from your customers' eyes.If you were building something to satisfy any other goal, you deserve to fail.Reduce risk.
I almost want to agree with this advice, really, I do. If there's anything you can assess about your business, there must be a spectrum of ideas that you've formed your hypothesis with. Some of those ideas are absolutely safe - tested and true axioms from the trenches. Some of those ideas are your core innovation. Some of those ideas are in that "what if?" or "imagine if?" category.Whenever you’re playing the “imagine if?” game, you’re embracing risk. Personally, I am not fearful of risk, per se - however, when you are playing with a smaller field, you can’t afford to hit the ball over everyone’s head. Put another way, “imagine if…” relies of too many things going right - it’s a game of fancy - and as that, should be the first thing we put into the “maybe later” pile.
Well, I am sorry if the tone is a bit excited, but I actually think this is a great time for entrepreneurship. I think that anyone who embraces this time and pushes through it will learn a tremendous amount about themselves. Heck, you might even build something great at the same time.
I won’t sit here and blow sunshine up your ass about how easy it is. It isn’t. Then again, despite our “wonderful lost times” every day has and continues to be a roller coaster ride. I don’t see that changing dramatically.
If you’d like to hear some more on this, I encourage you to read a couple of pieces by my friends: