The hardest part of building a startup might not be what you expect

Whenever someone asks what the hardest part of being a startup founder is, I respond with this. 

It’s deciding where to take advice from.

Founders are relentless. We seek advice from everywhere that might give us an advantage. 

From people we connect with personally as well as from people we’ll never meet. 

But the hard truth of building a startup is the quality of advice you choose to follow will determine if you succeed or fail.

Bad advice is like a bushfire for capital. It burns up runways and it kills most startups.

It’s a challenge because bad advice is hard to spot.

Advice is usually well-intentioned, which is very disarming.

Advice can look very credible, without being credible. This includes advice from very credible institutions and individuals. 

Relevant credibility is what matters. 

What’s relevant is deep startup-building experience. That is a rare commodity and there is a supply and demand crisis.

If that isn’t enough, bad advice will crowd out good advice in most startup ecosystems. 

Most startup ecosystems are not like Silicon Valley. 

Most ecosystems have more non-experts than experts, and these non-experts reinforce common myths and misconceptions. 

This might be shocking, but it should not be surprising. 

Silicon Valley took decades to earn its place.

So how do you know how to spot good startup-building advice?

Here are three questions to ask anyone you might consider taking advice from.

Question 1. How does the advice align with frameworks from globally recognised startup building experts?

There is a small number of globally recognised startup-building experts. 

It includes people like Marc Andreessen, Paul Graham, Steve Blank, and Ash Maurya. 

It’s a level of mastery that requires deep lived experience. This comes from playing a central part in building many successful startups.

These startup-building experts have identified patterns. They have codified these patterns into startup-building frameworks which they’ve shared.

They are disjointed, lack curation, and are far from comprehensive. But there are a lot of them, and they are very robust.

Good advice will generally be able to reference these frameworks.

These frameworks are available online and are accessible to anyone.

Unfortunately, there are no qualifications or accreditations of any substance in this space. 

There are no professional standards either. So these frameworks get misused.

It’s not enough to adopt these frameworks. It’s critical to know how to use them – when they are appropriate to apply and when they’re not.

So, advice that aligns these frameworks is a helpful indicator, but it isn’t foolproof.

We need to ask more questions.

Question 2. How exactly does the person offering advice define a startup?

A startup is an experiment to see if a company should exist.

A startup is an organisation optimised to grow for learning, it does not seek to grow for growth. 

Premature growth scales poor business models and usually leads to startup failure.

A startup’s goal is to confirm the founder’s business model hypothesis. 

The business model must be scalable and be able to reach Product-Market Fit.

Product-Market Fit is what creates hockey stick growth. 

This potential makes undertaking the journey a worthwhile risk. 

Reaching Product-Market Fit signals a proven business model worth scaling. 

This is the end of the startup phase and allows growing for growth.

A startup is an organisation that makes demonstrable progress towards Product-Market Fit. 

Startups do this with leading indicators, rather than lagging indicators like revenue. 

They seek to learn as much as they can, using as little time and money as possible. 

They use repeated attempts to compound their learning and converge on success. 

First to market isn’t important. 

It’s the first to Product-Market Fit that is the winner in a game where the winner takes most. 

Startups are more than a solution. Startups are about scalable business models. 

Developing marketing and sales is as important as developing the solution. 

Being a “deep tech” startup doesn’t bypass this reality. 

Being a grant-funded startup that won’t let you spend on marketing doesn’t bypass this reality. (Yes, even startup grant programs are a source of bad advice).

Startups are not small versions of an established business.

Startups are not innovation projects.

That’s a lot to process, and a necessarily valuable set of indicators.

If you’re given advice by someone who understands such a nuanced definition of a startup it’s a great sign.

But it’s still not enough. We need to ask one more question.

Question 3. What process do you use to guide startups to Product-Market Fit?

Processes make things repeatable. 

Processes get refined and improved. 

Sophisticated processes ensure the right actions happen. 

They ensure the right actions happen in the right situation and at the right time.

Engineers have clearly defined and measured processes to build bridges.

Surgeons have clearly defined and measured processes to replace hips.

Start-up building experts should have a clearly defined and measured process to help you reach Product-Market Fit.

These 3 questions will help protect you from bad advice and raise the bar for advice quality.

With 95% of startups failing for mostly avoidable reasons, it’s clear the bar needs raising.

If you’ve embarked on a startup and are not sure where to go for advice, or are worried about the advice you’re receiving, we can help.

Fill out this short questionnaire to tell us about your situation, and we’ll get in touch with your next steps.

 

Whenever you’re ready, here’s how we can help you.

If you’ve got a startup idea, or you’ve already embarked on your journey – you might be facing one or both of these situations.

  1. You’re struggling while going it alone. Worse, you’re wading in the muddy waters of some not-so-great advice.
  2. Perhaps you’re trying to raise capital for your startup and you’re hitting a dead end. Raising capital is a notoriously difficult thing to do. Globally, only 0.74% of startups manage to raise capital at Seed stage. Despite this, 16% of startups we’ve worked with were able to raise capital at Seed stage.

If you’re ready to step up and get the help you need, our Startup Builder™ program was created especially for you.

The Startup Builder™ process is specifically designed to take you all the way from idea to global success – in a way that’s simple, sustainable, and scalable.

If you’re ready to grow your revenue, profit, and social impact faster without wasting time and money on the wrong things at the wrong time, click here to request your Startup Builder™ Strategy Session.

 

Did you find this article valuable?

Go here to sign up to receive future weekly editions in your inbox.

On LinkedIn? Click here and press “follow” to get notified of the startup insights I share.

Share this article

Subscribe to our newsletter