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🚀 Starting a startup
The starting point is not solving a problem, developing a product or even having customers
Full disclosure, English is not my first language, you will likely experience my thick Brazilian accent and fair share of grammar errors below. I hope that it does not discourage you from exploring the main idea of this post.
Avoiding “game over”
We know startups are a risky business, where few make it and even fewer make it big. I will spare you the statistics, what matters is to understand why they usually fail (or succeed) and what we can do to avoid “game over”. Before we even talk about burn rate, capital preservation, product-market fit (PMF), customer acquisition cost (CAC), customer lifetime value (LTV), etc, we need to talk about starting your startup on the right foot.
The challenges in a startup come in different shapes, sizes and timings, creating a complex environment where one big mistake or compounded small mistakes could ultimately lead to “game over”.
It is not fun when your startup fails and the game is over. It stings. It is not fun at all, it sucks badly! It can be a very traumatic experience. And yes, we must do all we can to continue to be “in the game”, as for being in the game is the only way to potentially win it.
Having said that, keep in mind that you, my friend, will make mistakes, not one or two, you will make lots of them. There is no shame in that, on the contrary, own your mistakes, because that is the only way to learn from them. If you are not making mistakes you are simply not exploring enough, not being curious enough…
Also, before we go any further, do yourself a huge favor: ✋🏽STOP✋🏽 comparing yourself, your startup’s journey with the social media postings and skilled public relationship (PR) pieces of other founders, VCs, influencers, etc… Nobody is crushing it! Everybody is afraid and a bit unsure, it is just that a few are brave enough to admit it, and most think it is a dick measuring contest.
A startup is not a school. Not a single serious investor will ever ask you what was your GPA. Grades don’t matter anymore, a startup is not a freaking school test, a startup is about learning and adjusting, and being fast matters a lot.
There is no learning without trying and making mistakes and doing it over but it is better because now you know something you did not know before, you learned something. You will fail my friend, be ready, expect it, welcome it, you will fail time and again. The secret is not “not failing” (sorry for the double negative) the secret is not losing all your chips.
To continue to be in the game do this: do not lose all your chips. The sure way to be kicked out of Monopoly is to go bankrupt, to have no more chips to play… We need to try our best not to run out of our chips! Now see that chips, in this context, are not only a reference to money, dindin, mula! We have other equally or maybe even more critical chips: we need to keep our energy and emotional chips, we need to keep our relationships (relation”chips” - sorry, a dad’s joke).
A startup requires all these chips: capital, social capital, and emotional capital. When we are faced with the inevitable ups and downs in our journey we will need to tap into those chips. Cultivate them dearly every day and help others around you to understand that from day one. Make this one of the pillars of the culture you are building: preserve your chips!
Over the next many posts I will cover common mistakes, as well as common best practices, that will improve our chances to keep our various types of chips and stay in the game and have a fair chance to win, making a difference, making work we are proud of, and offering others a better future.
👉🏼 First things first, let’s start from… well, the start. For this first post, I want to talk about this one challenge that is more often than not completely overlooked, a challenge that precedes all others: knowing the first step when starting a startup.
Problem-solving comes after problem-identifying
Starting on the right foot is a good way to start preserving and increasing your chips. It took me a few do-overs (= experience) to realize that I made the same initial mistake in my first few startups: I started them by solving a problem. You might be thinking “but aren’t we in business to solve problems?” This might sound a bit counterintuitive, but humor me for a minute. Yes, indeed being in business is all about solving problems, but there is a critical step that comes before problem-solving.
My first mistake in those initial startup experiences was not to recognize that “problem-solving” comes only after “problem-identifying”
The reality is that not all problems are created equally and identifying problems worth your emotional labor, energy, and money is a critical step that precedes the “solving” step.
I know I am not alone in making this mistake. Many startup founders fall for it by jumping straight into building solutions, solving “the problem” through product development, or customer development, etc, completely skipping the proper identification of the problem.
Once you see it you cannot unsee it
If nothing else, after reading this post I want you to leave with this idea: the best problems live in the future. Go there, in the future, live there for a while and only then come back to solve it. It might require many trips, it might require you to bring some key members of your team with you so they can see it too.
When I say that the best problems live in the future, what I mean is that you will not be able to identify them with today’s eyes. We need to visit the future, we need to see with new eyes, we need to unlearn to see the present and learn to see the future.
To do that we need to believe that the future is accessible, and it is accessible because it can simply be created. That is how we access the future: by imagining it and then creating it. Like in building, before there is a building, there is a blue map. You imagine first and then you build it.
You must do the hard emotional labor of imagining a better future. Don’t be shy, think hard and big, the future is not meant to be a slightly better version of today.
Let’s go for an example, but not an obvious one. I could easily use examples like Uber, Airbnb, Netflix, etc, to talk about how some entrepreneurs imagined the future and built their businesses around it, but in these postings, I will try to go for the less famous examples.
Here is the example: close your eyes for a minute and try to imagine a better world for patients with chronic disease. That requires empathy, lots of empathy. There are many things you can imagine that would make their world better. How about if they don’t run out of their medicine? How about if they don’t forget to take it, and as a matter of fact take it at the right time each and every time? That is a better world indeed, particularly if you are a patient that suffers from chronic disease(s) or has a loved one with that condition.
That was the better future imagined by the folks at PillPack, the online pharmacy founded in 2013 and acquired by Amazon reportedly for $1 billion a mere five years later.
Once they imagined the future they could create it in the present by working to solve all the many problems that prevented that better future from being present. That is how the future is created.
I give you that I am oversimplifying things a bit here (hey, this post is not a Ph.D. thesis) but the point I am trying to get across is that this little trip into the future exercise is not intended to solve a problem, but rather to give you an insight, an insight that comes in the form of imagining a better world, a better future. Having this insight makes it so much easier to actually identify which problem(s) are required to be solved. The insight gives you clarity and precision. Having this insight means better risk management, preserving your chips because your startup is now less risky, having this insight means you have increased your chances of success by a lot.
Empathy coins buy your ticket to the future
A word of caution: the ticket to that trip into the future can only be bought with empathy coins. You can only see a better future with sincere empathy. Empathy, my friend, is very hard. Empathy is more than the proverbial “being in someone’s shoes”, it is truly understanding one’s world view, one’s story, seeing what they see. Empathy is rarely a finished job, but one that is not only worth your while, but it is also absolutely required.
As the ever generous Seth Godin teaches: once you see it you cannot unsee it. That is the real power of insight. Once you see a better future you cannot unsee it, seeing a better future helps you to have clarity around the problem(s) that need to be solved to create that future.
I will stop here for this post and in the next ones, I will write about how to evaluate the better future you imagined if the insight you gained is a good candidate for problem-solving. Remember, not all problems are created equal.
Call for Action, because we learn by doing
Read a book about riding a bike and that will help you almost nothing. It might inspire you, but it will not teach you much. Go ride the bike, experiment falling, learning to balance, doing it over, and then suddenly learning it for life. We learn by doing things.
I want to help you to get it done, to make it happen. So here is some homework, and forget about it, don’t even try chasing your dog, he ain’t going to eat it! Here is a two-part assignment.
Assignment Part 1: take the time to make a few quick trips to the future, to imagine a better future in a particular aspect. Come back and write it down: what is it that you were able to see now that you cannot unsee anymore? What would you tell others about the better future you see?
Don’t write an essay, something around 200 to 300 words should do it. This is a hard assignment. It will take a few trips, a few notes for you to feel you are into something.
Assignment Part 2: share your notes with your network, people you trust professionally, asking them to tell you without hesitation how did they feel about your vision for a better future. At this point you are not looking for feedback in the form of pros & cons, you are looking for an emotional response. You do not want to have a discussion of why it would be or not be possible, etc. You are only interested in how they felt.
Write down in an organized way what you heard. Is it aligned with what you had in mind, with your own feelings for this better version of the future?
There is no right or wrong answers, this is the first step, there will be changes, adaptations, and a lot more fine-tuning. There is, however, one sure way to fail: by not doing it.
I will be glad to share my 2 cents as well, feel free to drop me a note at email@example.com (confidentiality always included 👊🏼)
Mike Maples Jr. (Floodgate Venture Capital) is a generous and very experienced thinker, his podcast Starting Greatness is a great resource. Mike has contributed as a guest in many podcasts, always with clarity and generosity. Below is a quick link to three podcasts where Mike articulates his views on the topic of gaining/having an insight.