Startup Founders: Don’t Forget to Sell the Dream

I’ve been speaking with some Y Combinator hopefuls as they prepare to interview for this coming batch. As usual, there are some really enthusiastic and super smart folks working to solve really interesting and important problems.

I love taking these meetings because I get to get back to the community that has supported me plus I learn a ton in the process. For instance, it was from all these meetings last time around where I wrote my most popular post of 2012: 11 compelling startup pitch archetypes.

This post addresses a very specific piece of the startup pitch: selling the dream.

The Final 10%

The vast majority of your pitch should be around the mechanics of your business: your customers, your product, your team, your distribution strategy. This is what’s going to make you successful: competent people who really understand the needs of their users and who have the ability to create the right product to address those needs and get it into the hands of their users.

But, there is a final 10% of your pitch which should be more aspirational. It’s about the vision, the dream, the magic. It’s the answer to the question “How is this going to be a billion-dollar business?” [1]

Two of the companies that I’ve spoken to were missing that part of their pitch. They had identified a market segment which had a burning problem, and their products all that problem, and they had good specific strategies to acquire those customers. This is a great start. [2]

But they were missing that aspirational story.
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I’m Writing a Book and Alexis Finch is Illustrating It

Editor’s Note: Alexis and I ultimately didn’t work together on this book, but we’re still friends! And the book is out now: get it here!

winning_isnt_normal_cover-2Since fall of 2010, I’ve done my best to help readers kick ass and make things happen, with step-by-step guides, crazy/stupid adventures, slide decks, personal stories, reader contributions, videos and more.

This summer, I’m taking it one step further, by publishing a Kindle book.

Folks on my Insider’s List heard about it a few weeks ago, and now I’m making it official. Winning Isn’t Normal is a hand picked collection of 30 of my absolute best posts, revised and polished to perfection. Plus, I’m writing exclusive all new content that’s never been published anywhere.

You can see a table of contents here.

Introducing AgentFin

alexis finch
Now on top of all that awesomeness, I’m  excited to announce I’m collaborating with Alexis Finch, UX strategist and sketch note extraordinaire, to make Winning Isn’t Normal an illustrated book.

Yep, we’ll be making graphics/illustrations that reinforce and expand on the content. Bringing a visual element is great because not just because the book will look nicer, but because the message will go deeper. Research has shown how illustrations + captions can be even more effective at teaching concepts than verbal summaries, and so these illustrations are really going to make a difference.
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Thoughts on Competition for Early Stage Startups

Photo credit: screen grab from Nike Free Commercial

I was recently speaking with a colleague of my father who works in education and had an idea for a product in the tutoring space. He specifically wanted to know where he could find someone with technical skills to help build out a prototype.

In Silicon Valley, we often take for granted the concept of “ideas don’t matter, execution is everything” and that “your greatest enemy is not the competition, but yourself”. But I think that outside of the tech world and outside of Hacker News, there are still a lot of misconceptions that exist around startups and starting/building a new idea.

So I figured I’d share some of the things I’ve learned about competition that might be a reminder for the experienced, and new to those just getting started in startups.

1) Don’t be afraid to tell people your idea. In fact, speak liberally about it.

When I asked my father’s colleague for details about his idea to get a better sense of what he needed to have built, he hesitated for a second and then told me more about it while stating “of course that everything that I tell you is supposed to be confidential”, suggesting that he was still concerned with people “taking” his idea. While understandable, this predilection for secrecy is mistaken.

The two reasons why you should talk to people about your idea are:

First, if the only advantage that you have is about having some idea that which if communicated to a certain person would give them everything they need to execute and produce this idea, you’re already screwed. You have already lost if the “idea” is the only advantage you have. Most good startup ideas start out sounding like bad ideas so it’s unlikely you’ll even convince anyone it’s a good idea.

It’s also likely that someone has already had this idea and is currently working on it, or has tried it in the past and it didn’t work. Both things were true when it came to Ridejoy. Your idea is not new, it’s the new insight, resources and ability to execute that matters.

Second, talking to people about your idea allows you to uncover new insights and resources far faster than keeping it a secret. We thought we knew a good deal about ridesharing when we got started with Ridejoy but we’ve learned so so much more because we’ve told lots of people about our ideas and gotten interesting insights about the history of ridesharing, or approaches that other people to take into building peer-to-peer marketplaces, or just small anecdotes about their own experiences or their friends experiences with ridesharing – we never would have learned all these things if we kept Ridejoy a big secret.

2) Don’t worry about the competition. You are much more likely to be beaten by the market or your own mistakes.

When you’re trying to innovate in a space that has other players, it’s easy to get caught up in what the competition is doing. Living in Silicon Valley doesn’t help this, all your friends and the press know about the other players and they’re always asking questions like “so how are you different from X?” or “Well, I already use Y – what makes you better?”

There’s a strong desire to quickly differentiate yourself from the competitors, or obsess over their every move. But honestly, it just doesn’t matter. There’s certainly a lot of value in understanding how other players are approaching the market and their products, but it’s far more important to really focus on your own product, your own customers, and how you’re going to achieve your own goals.

When you’re doing a startup, you’re usually tackling a LARGE market, (and if you aren’t, you’d better have a really good reason not to) Large markets mean there should be plenty of new customers/users to go around. Your competition is not “stealing” customers from you. If you are having a hard time getting traction, it’s either an issue with the market (too early, too niche, hard to reach) or with your ability to penetrate this market (weak product, poor distribution). Neither of these things relate to your competition.

As for the advice that I gave my father’s colleague, it was essentially a modified version of the answer I gave on Quora to this question: I have a great idea for a business and the technical expertise to build it. Where should I start? except I skewed even more heavily to the customer development side as it would be even more expensive and time-consuming for him to get something built without a better idea of the exact product he needed and his distribution channels.

So those are my thoughts on competition, especially as it pertains to early-stage startups. I’d love to hear your thoughts on this topic in the comments!

What Helps You Grow Stronger?

Photo credit: CrossFit Huntsville

I stumbled across a question on Quora that I found pretty interesting:

What helps you grow stronger? Physically, Emotionally, Mentally or even Spiritually: What makes you a stronger being?

I felt that while many of the answers were examples of things that build strength, (“Suffering”, “Silence”, “My mother”,) I wanted to contribute a more comprehensive way to think about building strength. Here’s my answer:

Growing Stronger

I would define strength as the ability to exert or resist force.

This ability has three components – maximum load, endurance and recovery. The more you can handle (or dish out), the longer you can handle it and the faster you recover is what makes you strong in any dimension.

Since the original definition of strong comes from physical strength, I think it makes a lot of sense to start by looking at how physical strength works and then drawing parallels to other versions of it, including emotional, mental or professional strength.

Defining Physical Strength

What contributes to a person’s strength?

Of course your muscle are a primary factor – specifically the cross-sectional area of the muscles recruited. [1] The more fibers you activate, the more force you can produce. It makes sense that the bigger your muscles are, the more cross sectional area you have to recruit from.

But there’s also a neurological component – understanding how to best activate your muscles to fire both a higher percentage of your total fibers, and also the intensity of your recruitment affects the total force you can exert.

This is most surprisingly shown via mental training – where people who imagine doing ankle exercises for several weeks can produce more force in a before and after trial that was significantly higher than people who did no training, and close to people who did actual physical training. [2]

Finally you have to consider the wider environment in which the act of strength takes place. If you are well rested, hydrated and have done a solid active warmup, you are going to be a lot stronger than if you just woke up from a late night of drinking and partying.

How Strength Is Built

So how do you actually strengthen muscles?

You progressively overload muscles with increasingly more challenging exercises in volume, intensity, frequency or time, then allow the body to rest and recover, while making sure to feed it enough protein and other nutrients. [3]

Biologically, progressive overload causes tiny tears in your muscle fibers, which your body reacts to by healing with new tissue growth along with neurological reinforcement of recruiting those fibers. You don’t get strong by lifting the same weight over and over again. You have to do more, push yourself harder and constantly struggle and strain to continue seeing new strength gains.

Of course, if you try to squat 2x your body weight with no strength training of any kind, you may hurt yourself. That’s going to set you back and reduce your strength. You want to overload without injury. The key is understanding your limits and pushing hard without going too hard.

Finally, you have to do a range of exercises to strengthen different muscle groups and different types of motion. A gymnast has more explosive power but less endurance compared to a marathoner; a shot-putter will have stronger upper bodies while speed skaters will have stronger lower bodies, etc. They are all strong in different ways.

Understanding Other Dimensions of Strength

Now that we understand how strength works in the physical dimension, we can draw parallels to understand how we get stronger in other dimensions:

Mental

  • Challenge yourself with progressively more difficult exercises.
  • Force yourself to solve problems that are outside your comfort zone. Once you’ve mastered algebra, move to trigonometry and then calculus.
  • Allow yourself adequate time to rest – people who nap after lessons learn faster than those who stay awake. [4]
  • Remember that like the different types of physical strength (upper body, lower body, explosive, endurance) there are also multiple types of mental strength (verbal, quantitative, strategic, interpersonal, etc)

Emotional

  • It seems weird to force emotional challenges upon yourself, but I do think the way you react to emotional struggles that you encounter would determine whether you grow stronger from them.
  • Avoiding, ignoring or reactively dealing with emotional problems would likely result in little to no growth in strength.
  • Leaning into difficulties, embracing the struggle and finding ways to handle the situation maturely and with grace and dignity is more likely to result in greater emotional strength.

Spiritual

  • I’m personally not very spiritual, but I would imagine the analogy holds.
  • Feed yourself with the learnings from scripture, self-reflection and spiritual teachers.
  • Embrace the challenges you face along your spiritual journey
  • Constantly seek to deepen your spiritual practices of prayer, meditation, right thinking and loving kindness.

The Professional Dimension

Finally, I want to point out a dimension that wasn’t mentioned in the question – the professional dimension.

The more skill, experience and network you have, the stronger you’ll be professionally. You’ll be able to weather shocks like losing your job, and also use your strength to get projects you want, earn promotions, etc.

The progressive overload works here too: I remember listening to a talk by Drew Houston where he explained that when he started Dropbox, he was totally unprepared to run a billon dollar business. But he didn’t have to. First he just had to build a prototype, find a cofounder, get distribution, etc.

As he mastered each challenge he faced, he got better – and was faced with a bigger challenge to overcome. 5 grueling years later, he’s grown into incredibly strong business leader.

Footnotes

[1] “Peak force production is related to the physiological cross sectional area (PCSA), which estimates the sum of the cross sectional area of all the fibers.” Muscle Physiology – Introduction to Muscle
[2] “Differences in raw torque production after training in the 2 practice groups resulted in significant percentages of improvement for the physical practice group (25.28%) and the mental practice group (17.13%), but not for the control group (−1.77%).” Can Mental Practice Increase Ankle Dorsiflexor Torque?
[3] “In order to achieve more strength as opposed to maintaining the current strength capacity, the muscles (see skeletal muscles) need to be overloaded which stimulates the natural, adaptive processes of the body which develops to cope with the new demands placed on it.” Progressive overload
[4] “Those who remained awake throughout the day became worse at learning. In contrast, those who napped did markedly better and actually improved in their capacity to learn.” http://www.sciencedaily.com/releases/2010/02/100221110338.htm

Use the Wrong Reasons to Achieve the Right Goals [quote]

Heavy traffic (herding sheep)Photo credit: magical-world

With very rare exceptions, the right things are done for the wrong reasons.

It is futile to demand that men do the right thing for the right reason – this is a fight with a windmill. The organizer should know and accept that the right reason is introduced as a moral rationalization after the right end has been achieved, although it may have been achieved for the wrong reason – therefore he should search for and use the wrong reasons to achieve the right goals. He should be able , with skill and calculation, to use irrationality in his attempts to profess toward a rational world.

– Saul D Alinsky, Rules for Radicals

We live in a messy and convoluted world where people are motivated by a variety of things – things often considered to be foolish, base or irrational by idealists and purists. But I am with Alinsky in the belief that what matters most is the outcome. Let’s focus on getting everyone to do the right things first – right intentions can come later.

EDIT – July 14th, 2012

Some folks have interpreted this post to mean “the ends justify the means” which is incorrect. It’s about creating the right kind of incentives to encourage action. For instance – my startup Ridejoy helps people share car trips. This is a great way to reduce carbon emissions, which is a cause of global climate change, which leads to all kinds of bad things for human and animal life.

However, our branding is about having fun and affordable roadtrips. We don’t guilt or badger people into sharing rides to “be efficient” or “protect the planet” even when that might be one of our ultimate goals. Instead, we offer an incentive, a reason, that appeals to them, even if it’s not the “right” one.