One of my many favorite quotations is one from Demosthenes: “Nothing is easier than self-deceit. For what each man wishes, that he also believes to be true”. Nietzsche puts it in another way: “The visionary lies to himself, the liar only to others”.
Startup people really need to be a bit nuts in order to get anything to done. I was reminded of this today while reading this Hacker News thread. Please note that I am not writing this as criticism to this particular founder, I am certain the same criticisms apply to myself and many others.
There are a number of beliefs that are useful and false that startup people need to/tend to hold:
1. The prerequisites-will-save-me belief
You remember how going to college you were told that getting your degree will be useful in getting a job? Especially now that the economy isn’t great, I’ve seen tons of people complaining about how getting a degree did not guarantee that they got a job. Of course, that was not the actual claim – it was only implied that filling in the prerequisites would lead to success.
Starting something new, you have to believe that filling in the prerequisites for success (whatever those are: an extensive plan, a completed prototype, an encouraging response) will be sufficient for actual success. There are so many things that are out of our hands that all we can do is to do our own part and hope/believe that that will be enough, since there are many things that you cannot influence effectively. I have done the prerequisites, so I must get – nay, I deserve – funding, traction and all the other good things.
It isn’t false that doing the right prerequisites is necessary. It’s just that doing the prerequisites is not a guarantee for anything; and that knowing what is the right thing to do is hard.
2. The idea-is-important belief
I see this a lot among founders, particularly non-technical founders. It states that all you need is great idea, and everything else will fall into place. How long can it take to create and launch a product now that I have a great idea? The origin of this belief is that we tend to underestimate the amount of work and persistence needed, particularly for those things that we have little or no experience doing.
For non-technical founders, it’s the part where you take a rough idea and make it into something that actually works and is nice to use – which implies a million small details that have to be done correctly and which always takes longer than expected. For technical founders, it’s the part where you get someone to care about what you are doing: whether this is getting funding, or getting traction with partners, or getting someone to buy your product. We tend to like to think that whatever we do not understand must not be particularly hard or time-consuming.
It isn’t false that a good idea is useful; indeed, there are tons of examples of a simple, insightful idea leading to huge success. It’s just that those ideas are outliers: if they weren’t, we wouldn’t consider them so remarkable. VC’s say the invest in the team, not the idea – which probably is both true to some extent and false to some extent.
If you hold this belief strongly, then you tend to be secretive of your idea. Here is a thought experiment I came up with a while ago: Give someone the lottery numbers for next week. See if they act on it. They probably won’t. In fact, try to convince them that you have some strange scheme that allows you to know the lottery numbers. I’m not saying startups are a lottery, it’s just that you are claiming to have some extremely valuable idea based on some chain of logic. You’ll still have a hard time convincing people, let alone getting them to part with their money.
If you don’t love your idea, you won’t have the persistence to make it work. But at the same time, in retrospect, most ideas are garbage.
3. The can’t-do-it-without-money belief
This is frequently associated with potentially game changing startups (=founders believe it is potentially game changing). The assertion goes something like this: I have all the other parts, now I just need someone to add money in order to make the next big thing. This is also the reason why VC funding exists, and does make profit for some people.
This may or may not be correct; there are many companies that need funding in order to reach a sustainable size, or to capture an early market. And you might be one of those companies, which means that you need to take an extremely proactive approach to getting funding.
The problem with this belief is, however, that there are still many variations of ideas that can be done with less capital, and I do believe that you should believe enough in your company to do whatever you can whether or not someone pays you a “salary” to do something. Yes, you can do a lot more if you can focus and not worry about money, but VC’s aren’t a charity – which implies you should do what you can to achieve traction before deciding not to put in more time without funding. At the same time, you need to recognize when you have done all you can without money, and then decide whether to move on.
Of course, how much you should do before calling it quits is hard to answer – perhaps you have done everything you can to polish the concept and raise funding, and should call it quits, or perhaps funding is waiting just around the corner?
4. The persistence-is-omnipotent or I-will-make-it belief
This is the belief that iterating on a product will eventually lead to something successful. Since traction is rarely instant, it is rather useful to believe that whatever issues have come up so far can be solved in the next iteration of the product. Famously, PayPal started as a service reconciling beamed payments from Palm Pilots with email payments as a feature till they realized what they should be doing.
But despite the fact that you are smart and special, most startups statistically fail. And believing that you can make a turd work will probably just waste your time. Satisfaction with the current situation and expected progress is a prerequisite for wasting time.
“No matter how far down the wrong road you’ve traveled, always turn back.” But of course knowing whether you are on the wrong road is hard, and it just might be that keeping the idea alive for another week will result in traction. Or not. You won’t know, unless you believe that you should try.
What is interesting about these beliefs is that they are both useful and harmful: both true and false depending on what the exact situation is.
Confidence doesn’t directly influence your success rate, but it raises your attempt rate. And as Wayne Gretzky said, you miss 100% of the shots you never take.
Most people are overly preoccupied with the costs and risks of doing something. Entrepreneurs have to be optimists by nature, but try not engage in (too much) self-deceit. Edward Benson put it this way: “How desperately difficult it is to be honest with oneself. It is much easier to be honest with other people.”