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Micah June 8th

Three Rules For Startup Success

There are no hard and fast rules for startup success. There I said it.

Over the past week, I have been spending more and more time at the Techstars “Bunker.” A garden level office space in a hidden spot in Boulder where ten teams of startup hopefuls have gathered to learn from startup veterans.

I have met with 3-4 of the teams in different capacities. Sometimes its a formal meeting, sometimes it was a quick connect in a hallway.

When I go to Techstars, I sit and I listen. I hear conversations that I have now heard dozens of times in different formats and in different places.

When I go to Techstars, I sit and observe. I see who is working with movement, and who is working to keep busy. Its always easy to pick out the real from the fake, the wheat from the chaff, the cream from the milk.

I have read some great accounts by previous teams. Their insights are key to understanding their potential. Their thoughts reveal their focus.

I have watched teams continue to grow past Techstars. I have listened to the roar of accomplishment by some, the pomp without the circumstance by others. I have seen the teams that have been so laser focused on succeeding, regardless of the challenge, that they appear to disappear from the public eye.

I have seen the teams where personal ego has destroyed collective success. Where talking about what they would like to be seems to never match what they are. The teams that spend time most of their time waving their hands and imploring you to not look at the Man Behind the Curtain until the time is right, and once the Man Behind the Curtain is revealed, the world realized not only is he just a man, but he is a man that we have all seen a hundred times before.

I have been asked if Techstars is different than the natural process of other startups. Does the cauldron that all Techstars teams are thrown in, accelerate the success or failure of the startup?

The short answer is no; all startups have a natural life. Some live forever and some are killed in their cribs.

I have been asked, what makes for startup success? Startup success revolves around the process not the product, and for true startup success, there are three simple rules:

1) Listen and absorb.

Spend time each day asking someone a question you would like the answer to. Dont always ask the same person. But do ask the same question to multiple people.

Absorb their answers. Dont run off and do them. You are not asking to be dictated to, you are asking for an opinion. An educated guess. A knowledgeable response. Absorb and classify answers as such.

2) Make Decisions. Live With the Consequences.

Dont take forever to make a decision, but dont make it too fast. Be knowledgeable. Be decisive. The difficulty is not making a decision, its living with the consequences. The first decision we all make, each day, is “should I get out of bed?” The real question is “Can I live with the consequences today will bring?”

Revel in the consequences. It is there that success and failure live, not in the decisions we make.

3) Move Through Failure.

Failure is a process. Every day, fail. Fail again. Learn. Then fail again. That process will lead you towards success more quickly than anything else. Mistakes are never bad. Repeating mistakes is the worst thing you could ever do.

As an added bonus, here is the best question you could ever ask a mentor or someone you are hoping to learn from: “What do you suck at?”

Take a moment to enjoy the process, the cadence, the rhythm of startups. Its a unique experience that only a few truly understand and appreciate.

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  • I'll like to add some pointers for start-ups.

    1. Create Your Unique Selling Propositions (At Least 3-5)
    - What makes your business unique. Why should people buy from you. How do you differentiate with your competitors.

    2. Positioning
    - How do you want people to see you. No.1, No.2 or just a Me Too Company?

    3. Who Are Your Customers
    - Clearly define your customer demographics.

    4. Where Are Your Customers
    Need to know where to get them.

    5. Who Has Got Your Customers
    Try to work with Alumnis, Trade Associations before you're big enough to work with the Credit Card companies with tons of database.
  • Nice tips as well. I like the point of Where Are Your Customers.
  • Good points on listening. Successful entrepreneurs should listen 90% of the time and only do 10% of the talking.
  • Yes, sometimes it's more important to understand what your customer needs. Listening helps.
  • Nice post, I think couching them as "three rules for startup success" is overstating it a bit, but they do represent some good general advice. As always, all startup advice is a lie. (google that phrase, there's a pretty good post by Tony Wright I particularly like) :)

    I would modify the second one a little though. You state "Dont take forever to make a decision, but dont make it too fast.", that's somewhat contradictory advice and it makes it seem like there's some magical criteria, a Goldilocks moment, to make a decision . My feeling is that you should make a decision as soon as possible, accept it's going to be an imperfect decision. Obviously you don't want to make random choices, but as soon as you have any reasonable rationale for a particular path you should go with it (especially if you have a gut feeling one way or another).

    I think this is what you were saying, but I feel like that one sentence kind of takes some of the wind out of the point. The sooner you make a decision, the sooner you'll actually get the data that you need to evaluate that decision. I agree that the problem most people have is that they think of decisions as "the end", hard forks, that once chosen will inexorably affect their destiny forever. That kind of moral weight can be paralyzing. The truth is, decision making is a process, one that does *not* end once you start down a path. There should be a continuous feedback loop evaluating, modifying and refining the choices that you make based on new information.


    On the plains of hesitation lie the blackened bones of countless millions who at the dawn of victory lay down to rest, and in resting died.

    - Adlai E. Stevenson
  • Well, as I conclude, those three rules won't ensure your startups success, but rather putting yourself in the best position to allow your startup to succeed (basically not make you, the founder, the reason the startup failed)

    Regarding decision making. I do think there is a "right moment" in which a decision should be made. Make it too quick and it invites catastrophic failure, wait too long and it invites catastropic failure.

    When is that moment? For me, it has always been when I had enough information to understand most if not all of the consequences and I was willing to live with them all. And once that moment was reached, I don't hesitate to make the decision. I think the emphasis on quick decision making removes the ability to truly understand the decision being made. Plus, I assume all my decisions are imperfect by definition, and go with it.

    I am a big fan of Tony's blog. In fact, when I helped Guy Kawasaki build the startup section of alltop, I made sure it was there. Great content for sure!

    Guess the only quote I can use was a favorite from playing dominoes and spades at UCDavis - "study long; study wrong"

    :)
  • I still think we're saying mostly the same thing, I just worry that by saying "not too fast and not too slow" and saying there is a definitive "right" time to make a decision you're shifting the anxiety of prospective founders to knowing *when* is the right time to make a decision. I guess we disagree in that I don't think there is a right time. My feeling is that it's a very fuzzy continuum. I'm not suggesting you make random choices with no thinking or information, but you have to accept that you're always going to have to act on imperfect data. I argue that the sooner you make the choice, the sooner you "start the experiment" and can start getting feedback that helps you evaluate the decision and adjust.

    I could be extra sensitive though, I worked in a big company for many years, and the most painful thing was the analysis-paralysis that used to set in. Research, committee's, design boards, and thrashing that all went into a seemingly endless process to make product decisions. I used to joke that in the time it took to make the decision between two options, we could have actually tried both and still taken less time.
  • I used to work at universities as a fund raiser, and I left because it took 9 months to make basic decisions. At the same time, there are situations where I just made a decision and "went with it." Each way is not ideal, but there is a moment that I think great CEOs know its time to act.

    Its similar to playing sports. The great ones just know when to take it to the hoop.
  • Excellent post. These concepts apply to almost any endevour in life. For me I think #3 is the hardest. It's easier to go off and do something safe and live with the myth of infallability than to try and have the myth wiped away. Thanks for the great thoughts.
  • Its funny. I find #3 the easiest. Takes the fear out of trying.
  • Good points. The sad part tho is that most people who really need to read it and hear what you're saying would probably never really hear it.
  • you mean they will never listen? LOL. I am actually glad its that way. Makes it easier for the real startup guys (and gals) to succeed. We just keep on keeping on while all the idiots do retarded things and end up as afterthoughts and never wases.
  • Nice list...

    how about a follow up on team dynamics and revenue models?
  • Sure. Can you put it in the skribit widget on the right sidebar so I
    can remember?
  • Great list. Thanks for sharing.
  • gregory
    re your first sentence .... the reason is that there is no such thing as an individual person, ideas come from the group mind, pass through karmic collections of seeming individuals, and make their way into manifestation for a brief time, to be replaced by something new ... this is the working with movement process you refer to ....

    none of it is personal, is the takeaway, and that is totally liberating to understand ....

    only then can you fly, and be of use to the world flow, not taking, not giving, simply allowing ...
  • Fantastic post. I like #3 the best, although it's sometimes hard to admit to yourself that mistakes are not bad. I do however, agree that repeating them is the worst thing you could do. So Micah, what do you suck at? ;)
  • Me? What do I suck? Right now its losing weight. I think the one thing
    I have the most trouble with is finishing thing. I tend to like the
    beginning of things, and the end of things are pretty fun, but the
    middle is not my bag. So often, when things start to get into the
    middle, I tend to bail out, which rarely leads to enjoying the end of
    things...
  • Micah:

    Good stuff for those of us who are learning about making little startups into bigger ones! The tip on listening (hearing?) really struck a chord with me. I've often thought that people who are of the entrepreneurial mind don't have all the answers, even if they think they do, and would be well served by taking in expertise/thoughts from people who might hold some bit of useful knowledge. Looking forward to more of your posts!
  • Thanks Anthony. I think that the art of listening without judgement is
    a difficult one for people to embrace, but at the same time its the
    downfall of many a startup...
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