I chatted with a young guy last night about his new startup idea. He's got a vision for a social commerce app with a few cool spins on it. As I listened to him, I was thinking about how I had heard this exact pitch half a dozen times before. I also knew I had a lot to offer him in terms of help. I have a good friend that ran an almost identical company and failed. I've worked in social commerce, and I know a lot of the players. I have a lot of opinions about this space. He then asked me that one question that all entrepreneurs with some scribblings on a napkin always seem to ask:
Do you think it's a good idea?
This is the question he had been so excited to ask. He's just looking for some validation, someone else that believes in his idea. And I gave him the same response I give to every entrepreneur with a new, unproven vision of the future:
I have no fucking idea.
When a new entrepreneur comes to you for advice, remember this little tidbit. And no matter how wise/experienced/successful you become, don't forget it. Your ability to predict the future is no better than his.
Don't give bullshit advice. Don't tell an entrepreneur whether you think his idea will work. You don't know. You have absolutely no idea. Entrepreneurs have to see around several corners. They have visions for a future that doesn't currently exist. That vision currently doesn't exist because the product hasn't been made in just the right form and/or because the world is just not ready for it. Yet. And you can't predict how or when the world will change. You may have decent product intuition, but the great achievements in innovation are so massive precisely because everyone else got it wrong at the time. Don't be that guy.
The danger of providing concept feedback goes even deeper. With any new concept, the degree of innovation will likely correlate with the odds of failure. Really big swings, the kind that produce booming grand slams, have to defeat all kinds of odds. How could you possibly know whether this is one of those times?
One of my favorite investors once explained how he looks for the next big thing. He drew this venn diagram:
The big ideas, the ones that change the world, they have the potential for strong business fundamentals AND they are unfairly unpopular. The left side is what most junior associates at VC firms focus on exclusively. They desperately want to know things like cost of customer acquisition, total addressable market, lifetime value of a user, etc. It's all useful analysis into the business model of a startup. The right side is where the real disruption hides. That's where you find the next uber-innovation. When a concept is unfairly unpopular, everyone is missing something. And the entrepreneur that figures it out has a massive headstart on the rest of the industry.
When you tell an entrepreneur that you don't think his idea will work, there's a good chance you're right. Given that almost all startups fail, I'd be willing to bet tht you're right. Congrats Mr. Brilliant. Go pat yourself on the back. You also could be telling Mark Zuckerberg that social networking died with Friendster. Instead, keep your mouth shut about the feasibility of the concept and find others ways to help.
A few ways you can help an entrepreneur:
There's often a few core hypotheses baked into an entrepreneur's vision. Sometimes they're hidden amongst dozens of other feature ideas. I like to help expose them so that the entrepreneur can focus on attacking those key challenges first. With my bud's social commerce app, we talked a lot about his user acquisition strategy. If he is building a business model based around viral user acquisition, then testing that hypothesis is one of the keys to building his business. Tackle that first before obsessing about how you're going to scale.
Advise on Process
Clarifying hypotheses is really just providing insight into a process for thinking about product development. I try to spend most of my time with entrepreneurs checking to see that they're up-to-date on lean, agile development, and customer development. Usually people have heard the buzz words, but they often need to talk through how to actually implement a good process that will work for them.
Entrepreneurs usually need 3 types of introductions: to other entrepreneurs, to potential customers, and to investors. I consider my network of relationships to be one of my most valuable assets. I'll always try to connect people with the entrepreneurs and potential customers that either are most likely to help them or are most likely to give them quality feedback. And I'll happily make introductions to investors when if I myself would invest.
The world is changed by determined people who foolishly plow forward, despite perfectly good reasons to quit. I like to support that foolishness. I usually just tell them about how many times I've screwed things up...it's helpful to know you're not alone. And in all seriousness, the road is really, really long. Having a heart to heart about all the ups and downs can be incredible helpful.
If you're an industry expert, this post is especially for you. You have the most help to provide in terms of introductions and clarifying hypotheses. And you are the absolute worst person to provide concept advice. I refer you to Arthur C. Clarke's Three Laws of Prediction:
- When a distinguished but elderly scientist states that something is possible, he is almost certainly right. When he states that something is impossible, he is very probably wrong.
- The only way of discovering the limits of the possible is to venture a little way past them into the impossible.
- Any sufficiently advanced technology is indistinguishable from magic.
And finally a caveat. There are an incredibly small number of people on this earth who do seem to be able to see around 2 corners repeatedly. You should go to them for concept advice as much as you possibly can. Paul Graham of Y Combinator is certainly one of them.
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