Some Tips for Startup Founders
I recently started to collect quotes about startups. While doing so, I realised that it would be quite fun to write down some of my own observations as well. However, it seemed a little irreverent to include my name among such well-known ones as Steve Blank and Paul Graham, so I decided to publish my thoughts separately.
Of course, these observations are drawn from my own experience, which is neither Silicon Valley nor a high-octane accelerator, but as a professor in Germany who has a small innovation consulting company, teaches entrepreneurship classes at university and occasionally coaches startups.
This post is a work in progress with no finishing deadline; I will continue to add observations as they occur to me.
Founders need to make mistakes as quickly as possible whereas bureaucrats want to avoid making even one mistake. So, when they are under pressure, startups will speed up and bureaucrats will do nothing. Therefore, founders should not allow themselves to become dependent on bureaucrats.
Lots of students seem to think that founding a startup will be like any other job: that it can be pursued half-heartedly. The opposite is true: if you are not prepared to devote as much time and energy to your project as an olympic athlete or world-class musician, then it is doomed to failure.
Events such as startup conferences and business plan competitions are held for the benefit of the hosts, not the founders. Better to ignore such distractions and spend the time making your product awesome.
The best definition of a competitor is, „Who will get our prospects‘ money if we don’t?“ Finding the right answer to this question is harder than it looks, but doing so will yield valuable insights into what your value proposition should be.
Nobody who has not themselves worked in a startup knows the first thing about them. Unfortunately, this often includes people that you need in order to get started, especially families, friends, banks, consultants, universities and the government.
Aristotle is supposed to have said, „Where your talents and the needs of the world cross, there lies your vocation.“ This is good advice for founders: Build something people want using the skills you are best at.
A bureaucrat’s job is to enforce rules, a startup’s job is to break rules. Therefore, startups and bureaucracies can never work together.
One Task Only
Your only task as an early-stage startup is to find a small network of customers who desperately need your solution and to make them insanely happy. If you can do that, then everything else will take care of itself.
Until product-market fit, the only two roles a startup needs are someone who can create an awesome product and someone who can create a delighted customer.
Two unpleasant discoveries that all startup founders have to make: Their customers are not interested in their products, and their investors are not interested in their companies.
PSF and PMF
Product Market Fit means building the product correctly.
Problem Solution Fit means building the correct product.