I was recently asked to give a talk at Lamba Labs on three ways to screw up your startup. But which three to choose?
It all happened rather casually: I met Bassam (a co-founder of Lamba Labs and a maker extraordinaire) at a cafe and he suggested I participate in their regular “Show and Tell” session.
When asked to come up with a topic, the first thing that came to my mind was that not enough time was spent talking about what NOT to do in a startup, as opposed to the usual “3 things to supercharge your company.”
I then added how there are so many ways to “screw it all up.”
Bassam liked the topic and booked me.
Thing is, I only had 3 minutes total, which isn’t a lot, especially given that there’s a million and one things to avoid when starting up. Life as an entrepreneur can be seen as similar to navigating a huge minefield, with each mine a potentially fatal mistake.
Still, that was the time format, and this lead me to structure the talk in a manner that focused on 3 major aspects, or “blocks of concerns,” in startup life. For each block, one major mistake will be explained.
The three aspects I focused on were the Team, the Competition, and the Market. Any entrepreneur worth his salt is constantly assessing how well their startup is doing vis-à-vis the above three. So here we go.
The Team Concern: “How tight is my crew?”
A “tight” team is a very American expression that nicely summarizes the way a great team should work.
Team dynamics is an incredibly important topic that deserves a post of its own. That being said, the short explanation is that it’s not just about each member being good at what they do. You read all the time about the importance of “only hiring A players!"
Skill does matter, for sure, but having the right attitude, a lot of drive and being conscientious matter just as much.
Most importantly, a team has to be balanced, in the sense that they are equally driven. If you have three cofounders, with two burning the midnight oil day after day, while the other one’s behaving like an employee, that startup is in trouble.
Nothing destroys morale like feeling a teammate isn’t pulling their weight. Usually the others try to compensate and fail to address the issue directly, until they can’t take it anymore. Such situations usually end with a huge argument, bad blood and an aborted project.
The Competition Concern: “What’s my edge against those doing the same thing?”
If you believe the three in the shower rule, you’re always assuming that there are at least three other teams working on the same concept as yours, right now.
Even if you can’t find them in your research, you must assume that they are out there, with evil intents, scheming away and plotting to cheat you from your destined success and millions of dollars in revenue.
Scary thought, isn’t it?
Well, such competition is an inescapable fact. Being in a startup means you’re in a race against others, with the winner being the one who launched faster, scaled better, and consistently stayed in the lead until the exit (a sale, merger or IPO).
So the big question people actively avoid asking themselves is “How is my startup better than the other ones out there?”
And by better, I mean 10 times better, not 10% better. Here are some questions you'll want to ask yourself:
- Is my team superior?
- Is my starting market the right one?
- Are the features I’m launching with the best ones for that niche market?
- Do I have a ‘secret' move, that they don't have, that will make users love my product more and leave other products for mine?
- Do I have domain expertise i.e. relevant expert knowledge that is not easy for others to get?
To give an example, Walid Singer, one of Presella.com’s cofounders, has 10 years of experience in local and regional event production. He basically knows everyone and everything going on the business. That’s a huge edge over other startups in the events and e-ticketing business!
If the others don’t have inside expertise, they need to get it, i.e. build the right connections, understand the rules, earn trust from players, and a million other things that matter immensely. All of that takes time to acquire and integrate, therefore slowing them down in the race. They will make a ton of mistakes and assumptions along the way, mistakes that Presella might be able to avoid completely.
So domain expertise is definitely a competitive advantage for Presella, among the many others that they have. What are yours?
The Market Concern: “How well synced is my product with my market?”
This is the infamous “Product/Market fit” mantra of the Lean Startup movement.
The problem with repeating the same thing over and over is that it loses meaning, and goes right out the other ear when it’s read. So an alternative way to explain it is that it’s the process of constantly calibrating what you build internally - i.e., the product - with external users - i.e., the market.
It’s very easy to lose overall perspective when deeply involved in the small details of your cherished baby, agonizing over design and development challenges (as you should be).
When you’re knee deep in product development, it becomes easy to veer wildly off course and build things nobody wants. The only way to ensure it’s still on the right track is by doing regular spot checks, or calibration exercises, if you will, where relevant external parties (early adopters or advisors or mentors) have a look at the current state of things and give feedback as to whether this is still something they feel excited about.
In conclusion, the above three are valuable questions to obsess
about. Other points I didn’t have time to mention include
mismanaging cash flow, not having an early user acquisition/launch
plan, overspending on initial legal, underestimating the value of
mentorship, and much more. We’ll get to them in good time.