Startups are based in faith, and the ones that succeed have no fear.

This morning, I read three separate lists of the rules of successful startups. I contemplated creating my own list, but among those 30 items, there are definitely some gems, so I kept reading. Fred Wilson linked to an article about Rick Rubin. The quote in the article that really got my juices flowing was:

To the right of Barnett’s large desk, above the framed Johnny Cash portrait, is a sign that reads, “Your Faith Needs to Be Greater Than Your Fear.” “I have always believed that,” Barnett told me in mid-August, “but it seems particularly relevant at the moment.”

At this moment in the startup world, this seems as relevant as it does in the music business. There are hundreds of startups showing up daily. Most are “Web 2.0″ or “social networks” or “the new new…”

With the success of a few like Photobucket, Fotolog, FeedBurner, there is much talk about a Bubble 2.0. And certainly, as it seems to happen in every industry, there will be a few winners and a ton of losers.

So, what does it take to be a winner? More than anything the startups that I have been around that have been successful have all shared the same thing. Faith that far outstripped their fear.

The first startup I worked for was Kozmo.com. We raised more than $250 million dollars in financing, with $60 million coming from Amazon. It was started in 1998, and I joined the company in late 1999 as the marketing manager in San Diego. I was hired to develop local business relationships and drive local marketing. By mid 2000, the company was dying, and I bailed out and moved to MyPersonal.com (now Synacor after a merger) in the SF Bay Area. Talk about walking into a town just to watch everyone leave…FuckedCompany was the most read website (mostly to see if your company appeared on it.)

MyPersonal raised around $6 million, and by the end of 2001 was dying and so merged with another company that was stumbling in the dot com bust. Like two drunks stumbling out of a bar, MyPersonal and Chek became a marriage of convenience/necessity and became Synacor. (True story, when the merger was happening, there was a three day meeting about the new name, among the discarded names was Current Wisdom, which I bought the next day, and used as a consultant and later as my search engine marketing company.)

After MyPersonal, I consulted with a few startups, and after making the move to Colorado joined ServiceMagic. ServiceMagic raised around $35 million (Including Tango and Mobius Ventures, where I met Seth Levine organizing a search marketing conference for portfolio companies), and was acquired in September 2004 by InterActive Corp for an undisclosed amount (guessing it was around a couple hundred million.)

At ServiceMagic, I was responsible for the early development of their search engine marketing strategy, which has certainly served them well. I left ServiceMagic in mid 2004 to start Current Wisdom, a full service search engine marketing company, which I sold to the Indigio Group in early 2007, making the missing out on the ServiceMagic acquisition a bit easier to swallow.

Since then, I have advised several startups in multiple stages, and have begun to make small angel type investments in early stage companies trying to get a clear understanding of the difference between startup success and failure.

It was the quote from the Rick Rubin article that finally brought it all together for me. Looking at each of the startups that I have worked with for a period of time:

Kozmo

Faith: There was definitely a faith that no one could do what we did better. Joe Park was looked at as a someone who could take Kozmo to the promised land.

Fear: From the beginning, Kozmo feared everyone. First there was UrbanFetch, which was seen a serious competitor. For those that know the story, the rumor was that UrbanFetch was started by a couple of hedge fund guys that Joe pitched Kozmo, and launched as a high end competitor. Every marketing decision was based in the fear that someone would beat us to the punch; that if we didnt pay Starbucks $150 million to put drop boxes in their stores, we would lose. Once the market began to dip and layoffs started, everyone became fearful of their jobs. In the end, Kozmo was killed by a fear of being copied and done better, the faith in the idea had died.

MyPersonal

Faith: When I joined MyPersonal I knew it had a difficult road to climb. They were basically offering a MyYahoo experience for Colleges and University for Free. My faith was, and still is, in the MyPersonal management team (they have since left the company).

Fear: We feared everyone. zUniversity was a major competitor, there were university sports sites, the Internet Association Corporation and some of the alumni directories, such as Harris Publishing.

The interesting with the fear factor at MyPersonal, the employees began to not care about whether the company “made it” or not. In fact, we still busted our asses, just with a sense of impending doom, and given the market conditions, the longer we could hold onto our jobs the better. In the fourth round of layoffs, I was cut after being asked to sell a previously free product to our clients. Needless to say, it was not easy or very successful. No MyPersonal people are left, and the Emeryville office has been closed for quite awhile.

In a strange turn of events, Synacor recently filed for an IPO.

ServiceMagic

Faith: The was the first time that I saw faith overcome fear. We had faith in our management team. Co-CEOs, Michael Beaudion and Rodney Rice are two of the most intelligent, savvy, ruthless driven people I have ever met. Founded in 1998, I joined in 2002, after ServiceMagic had weathered the dot com storm. The feeling among those that were still there, that the experience made them stronger, more resolute and laser sighted on the future. When I was there, we launched real estate and lending lead generation services, and a few months after I left, the sale to IAC was complete. There was never a doubt that a liquidity event would occur.

Even, when I put on the day long seminar for Mobius portfolio companies, ServiceMagic was looked at as a clear winner. We had become the beast everyone feared.

Fear: The fear that had crippled both Kozmo and MyPersonal did not exist at ServiceMagic. The only real fear I felt was a clear understanding that as soon as I stopped showing value, I would be fired. For me, it was the best kind of fear to have. For many others, it was seen as draconian.

Here’s an example. When I started at ServiceMagic, there was a sales rep class of thirty every week. I would do part of the training every Thursday. For eight potential sales reps.

It has changed drastically since then, but the concept of value hasnt.

The startups that I speak to now have a mixture of faith and fear. Since many are early in their life cycle, fear dominates. The couple that have really impressed me have ultimate faith in themselves and their idea. They are easy to spot. There is little talk of their competitors; they dont talk about creating a market, or operating in a niche; they are the first or second comment on TechCrunch when they or a competitor are mentioned.

Mostly, they are calm and operate as if there is urgency without emergency. These are the hallmarks of a successful startup, where their faith is greater than their fear.