Corporations are dead. No change wished. Some are like zombies. People hate each other. Desperate to retire. BUT is startup life better?
Remembering that you are going to die is the best way I know to avoid the trap of thinking you have something to lose. You are already naked. There is no reason not to follow your heart.
― Steve Jobs
Corporations are dead. Some are like zombies. People hate each other. Work against each other. No change wished. Desperate to retire.
The corporate promise — that you will be relatively wealthy and secure if you get a Uni degree — has crumbled away.
On the other hand, starting a startup seems sexy — because startup CEO’s are celebrated like rockstars or brilliant actors!
Everyone tells you that it’s easier, and it can be done faster than ever before. To pursue your idea that you seemingly burn for so much, meet a lot of amazing people, change the face of the world and make tons of money along the way!
It’s understandable that making startups your career choice number one seems like the most intelligent thing. BUT let’s be realistic. Doesn’t that sound too good to be true — just like the Facebook movie?
Before you commit yourself to joining the startup world, you should be aware of what it means to be a startup founder or startup team member.
Be aware of the startup life: The scary truth no one tells you about at the beginning …
- Startups will take over your life.
- There will be hard and depressing times (independently of your role).
- Startups are chaos and toxic.
- Startups are counterintuitive.
- Making a startup successful is not about ‘Hacks’.
- Getting customers is harder than you think!
- You probably don’t know your customer as well as you think you do.
- Pivot early, pivot hard.
- Not giving up can get you surprisingly far.
- Deals tend to break. Don’t ever depend on them!
- Startups take time.
Let’s explore them!
—P.S.: You are reading part one of a three-part Startup Life series from StartupGeist…
- Startup Life: The Scary Truth No One Tells you
- Startup Motivation: 5 Bad and 5 Good Motives to Start a Startup
- Startup Life: How to Prepare for the Rollercoaster
Startups will take over your life
I’m not saying can, but will. Most startups are a race against time. At some point, you will probably run out of money. Your stress level goes up.
There is a constant flow of large and small tasks to be done… That email from your most important customer must be answered; that marketing campaign must be set up because your company needs traction, that a load of tax papers must be filled out.
And worst of all: you don’t have a f*cking clue how to do it right. You will be most likely poking around in the dark. You simply don’t know what to do.
One mentor tells you x. The other one y.
#WTF … what shall I do? No one knows.
You will be working tremendous hours. I don’t imply a lack of ‘free time’ — but rather an enormous burden for your private life, health, and fitness. It feels like you won’t have time for anything.
This constant rush will make you feel crazy from time to time.
If your friends, families and partners haven’t experienced the startup world themselves, chances are high that they won’t understand what you’re doing and why you’re doing it.
Too many business and private relationships break up because startup founders or team members don’t have enough time to nurture them or are unable to set their minds on anything else than the pressing problems they face at work.
Don’t think that it will be over when you are successful.
Paul Graham makes a point:
Even though the most successful founders like Larry Page (CEO of Google) seem to have an amazing life and tons of cash, they’re all but free.
Running a super successful company means dealing with an unimaginable load of hard problems every day which means running your life in pace that won’t allow you to catch your breath ever.
Better think twice before you go on vacation because you don’t want this load to pile up for a week…
This also applies to startup team members, although in an eased manner. You will be working long hours for a bad salary and a small chance to make an even smaller fortune than the founders do.
Sure, there might be a super tiny chance that you will find a position that allows you to work 9-5 (even this I doubt), but you definitely won’t make anything that can be called a “career” then.
—Conclusion: Are you determined enough to make all of these sacrifices?
There will be hard and depressing times
Startups never run smoothly.
What I now say applies to each and every one of them, no matter how great the idea or how experienced the founders are. There are always bad times — that are not only hard but can turn into a fully-fledged nightmare for you.
These time are often referred to as an ‘emotional roller-coaster’:
Startups can take you extremely high, but also unimaginably down. There will be times that Ben Horowitz — one of the most famous Silicon Valley investors — calls “the Struggle”.
The Struggle is when you wonder why you started the company in the first place.The Struggle is when people ask you why you don’t quit and you don’t know the answer. The Struggle is when your employees think you are lying and you think they may be right. The Struggle is when food loses its taste. …
Read ‘the Struggle’ — now. It’s great!
Nobody seemingly cares about the great things you are doing.
Your enormous efforts to push the company forward don’t seem to make any difference. According to Ben, most people are not strong enough to take it…
Do you have to the persistence and willpower to handle such times?
Busted! I know you thought yes or maybe. But the truth is, you can’t know until you started a startup and went through the darkest times.
You can’t intellectually think about situations — you must experience them. Only then, you know that you made it. Ever thought about running a marathon? Yes. Only if you have ever run one, you know or even worth experienced what it feels like to ‘hit the wall’.
Have ever you been punched in the face? No. You will never know what it feels like if you haven’t experienced it!
Same holds true for startups!
Be aware that you will be putting your health at risk. You will most likely push yourself beyond your limits in a physical as well as an emotional sense for a long time.
There are numerous stories about startup founders who put on 15 kilos or lost them, got stomach sick or were unable to sleep properly for weeks. Joshua Steimle, for example, draws a dark picture of his startup time:
By early 2007 I was miserable. I have taken on almost $500,000 in business debt. I was broke, hopeless, and depressed. I was a wreck physically after years of little to no exercise, insufficient sleep, and a steady diet of fast food.
—Conclusion: One of my goals with StartupGeist is to help you successfully build a startup in a focused, productive and mindful way. Check out my productivity system as the first step to sanity.
Startups are chaos
Startups are ‘speedboats’, whereas corporations are compared to a ‘big cruiser’.
Startups can react and change their course much quicker than corporations, and they must do so to survive.
Speedboats are cool, aren’t they? But what about the comfort of big cruisers?
In most instances, you can predict the course of cruisers fairly well and prepare for what will happen next. On the contrary, a speedboat might have changed it’s direction by 180 degrees while you lean over the rail to puke for a few minutes.
Speedboats also don’t have all this fancy sonar gear and not enough armor to ignore all the smaller ledges. If you’re going on a long and dangerous journey, a speedboat is going to be more stressful than a cruiser.
Steve Blank says:
If you can’t manage chaos and uncertainty, if you can’t bias yourself for action and if you wait around for someone else to tell you what to do, then your investors and competitors will make your decisions for you and you will run out of money and your company will die.
To be successful, you will need a huge number of quick trials & errors of how you work until you figure out what works.
—Conclusion: You shouldn’t start or join a startup if a constant number of quick and chaotic changes dazzles you. You will not be happy!
Startups are counterintuitive
So, you’re at the door of your life’s biggest adventure right now. Are you determined to make your dream come true and start a startup?
Or, maybe you just started a side project which received so much traction that you can see it turning into a startup?
Even if you think you know how to build a company, it’s never as simple as you expect. As Paul Graham outlines, you can’t simply trust your experience here because startups are quite counterintuitive!
Practically that means that many things that sound great will turn out bad in the end and vice versa.
Keep that in mind when you receive feedback from others. According to Paul, too many young founders don’t listen to advice that doesn’t sound valid to them.
Batch after batch, the YC partners warn founders about mistakes they’re about to make, and the founders ignore them, and then come back a year later and say ‘I wish we’d listened.
—Conclusion: If in doubt, follow Paul Graham’s advice …
Making a startup successful is not about ‘hacks’
Paul Graham thinks that our education system makes us too much focussed on ‘gaming the system’. Because most tasks are artificial, we come up with strategies about how to get good grades and references with the smallest amount of work possible.
BUT Paul emphasizes that there is no ‘magic hack’ for making startups successful — even though most startup founders search for it:
Since fundraising appears to be the measure of success for startups (another classic mistake), they always want to know what the tricks are for convincing investors. We tell them the best way to convince investors is to make a startup that’s actually doing well, meaning growing fast, and then simply tell investors so. Then they want to know what the tricks are for growing fast. And we have to tell them the best way to do that is simply to make something people want’
You might well be able to ‘hack’ a university exam and get a good grade if you only know half of the things you are supposed to know. But you won’t be able to ‘hack’ your growth in a sustainable way if your product is crappy!
Also, you won’t be able to ‘hack’ investors, more than fooling them into one funding round. However, if your product is crappy investors money won’t bring you anywhere.
The point I want to make (— even though I am aware that I am just repeating Paul. Don’t we all want to come across smart?):
For startup success, you will actually have to do your homework. First and foremost, this homework is to build a product that people actually want. If you manage that, you can start thinking about how to get users and investors; if you don’t manage it, no ‘hack’ will save your sorry butt.
Getting customers is harder than you think!
Whenever I talk to startup founders about their problems and ask them what the hardest step was so far, they usually answer: “everything” or “getting the first customers”.
One of the worst mistakes first-time startup founders make is to think that really good products simply ‘sell themselves’ — without noticeable sales and marketing efforts. It’s so-called ‘build it and they will come’-fallacy.
Every successful startup founder or startup expert will tell you how important customer acquisition is.
Dave Cummings — both successful serial entrepreneur and angel investor — defines this as one of his most important lessons learned:
Even great products need marketing!
If you have problems with that, feel free to check out my guide on starting a startup: the YC way!
You probably don’t know your customer as well as you think you do
The key to startup success? Sounds simple. Intellectually too simple. But extremely hard to follow and impossible to achieve — only a few do:
Make something people want. — Y Combinator mantra
You might think that people MUST want your product because it is SO extremely great…
Even the smartest people fall in love with their ideas and fail to see that no one wants their seemingly amazing thing. Trust assured; it happens all the time.
Much better, but not safe either.
There are examples of people who did all validation steps properly and still failed, like Dan Norris and his app Informly. He did promising interviews, created targeted surveys and built pre-sign up landing pages and still didn’t get paying customers in the end. Why?
You can’t fully rely on what customers tell you. Pre-signing up for something doesn’t mean that people will download it.
If people say they ‘like’ or even ‘love’ your product, it doesn’t mean that they’ll buy it either.
Most of the guys you ask are either too nice to be honest or simply don’t know it better themselves.
This is somehow in line with Henry Ford’s famous quote:
If I had asked people what they wanted, they would have said faster horses.
That’s why there is this myth about Apple and Steve Jobs that they have never done market research for building the iPhone and iPad. Of course, they did. But they didn’t just listen to the customer. It’s an Art — not Science to understand people’s needs and desires. I won’t go into detail, read more here.
Just let me add this: There is a broad consensus in psychology that asking people about hypothetical situations doesn’t yield valid results, and yet this is what many entrepreneurs do.
Pivot early, pivot quickly
Yes, pivoting is more common than most first-time startup founders think. Startup Genome revealed that more successful startups pivot one time. Chances of success significantly decrease if you don’t pivot at all or too often.
There is a popular image about a successful startup founder as someone who continues despite all setbacks — that is essentially right. However, it doesn’t mean that you should continue to market an unsuccessful product as Paul Graham advises:
The stick-to-your-vision approach works for something like winning an Olympic gold medal, where the problem is well-defined. Startups are more like science, where you need to follow the trail wherever it leads.
So don’t get too attached to your original plan, because it’s probably wrong. Most successful startups end up doing something different than they originally intended—often so different that it doesn’t even seem like the same company.”
You will have to find the right mix between perseverance and pivoting — that is hard — like everything in the startup world is.
It’s hard to keep financial discipline
Startup spendings are a strange thing.
Please meet Peter. His startup raised $100,000 and aimed to provide the world with an amazing nearby party notification app. Let’s say this money will last for nine months until he runs out of cash.
Now, please meet his competitor, James, who wants to do the same thing, but raised $200,000.
What’s the point, Danny? I don’t get.
Hold on. I was just about to make it.
You might think that James’ 200k startup lasted longer than Peter’s 100k startup — probably not twice as long, but many more months, right?
Wrong! I have seen a few contrary examples and am now convinced that startups adapt to the amount of money they have in the bank and then burn through it — whether it’s $50,000 or $200,000. It doesn’t matter.
First-time startup founders are not financially disciplined and tend to overspend.
Of course, you might say that this is just normal because the idea of fundraising is to invest money to create growth (a.k.a. revenue and profits). If a startup founder has more money, he will spend more.
But here’s the point that’s interesting: according to my observation, startups with much more money in the bank do not simply scale more successfully. Many of them do very inefficient things like buying nice chairs, renting fancy loft offices or hiring people they don’t need.
Startup Genome calls this Premature Scaling — the number one reason for startup failure.
Curiously, investors often play a part in it, too!
Once you take several million dollars of my money, the clock is ticking. If VCs fund you, they’re not going to let you just put the money in the bank and keep operating as two guys living on ramen. They want that money to go to work.
If ‘going to work’ means to create visible results like fancy hires or big marketing campaigns, it’s likely that you’ll do things you don’t need, isn’t it?
—So beware: Don’t give into the temptations that big money will create big results — often the complete opposite is the case.
Not giving up can get you surprisingly far
Startups are a beast that let you experience an emotional rollercoaster.
Contradicting pivoting (one of the points above), giving up is not always necessary! It might sound surprising for you, but just going on can get you surprisingly far.
Ben Horowitz notes:
In the technology game, tomorrow looks nothing like today. If you survive long enough to see tomorrow, it may bring you the answer that seems so impossible today.
And Paul Graham believes:
Sheer effort is usually enough, so long as you keep morphing your idea.
Therefore, you shouldn’t give up on your idea too early if you believe in it. Keep trying to figure out how you can improve and adapt.
Deals tend to break. Never depend on only ONE!
Here’s another very sad, but brutal truth.
When you’re building a company, there will most likely be at least one investment or M&A deal that breaks.
And by ‘breaking’, I don’t mean that it won’t work out after some positive conversations. It’s going to be canceled at the LAST MOMENT!
Deals fall through. — YC mantra
You might wonder why?
Mostly because a) the guys on the other table are only human too and b) deals are business and business is nasty.
Think, for instance, about the position investors are constantly in.
Because startups are extremely uncertain and counterintuitive, these guys can never be sure of what they’re doing. Yes, they might have become experienced by investing in many companies, but they still won’t have more than some questionable proxies to judge each investment deal.
So even if you’re sure about what you’re doing, investors will never be. Additionally, making an investment is always a big deal for these guys because they will invest into your company that won’t seem small to them.
Startups take time
Startups seem to be all about speed… Moving fast, evolving fast, scaling fast. Still, you shouldn’t succumb to the idea that you can create a ‘quick flip’ that will be acquired after a few years.
Creating a successful startup takes time. Plan at least 5 years, if not 7!
Don’t expect to become rich and successful quickly.
Don’t work on something you wouldn’t like to work on for several years.
—Never forget: ANY journey should be FUN!
What’s the point of doing something — if you don’t enjoy it!
ALWAYS AIM AT HAVING FUN, and LEARNING A TONS …
What’s the point otherwise?
- Paul Graham: Before the Startup
- Paul Graham: A Fundraising Survival Guide
- Paul Graham: Startups are ‘Emotional Roller-Coaster’
- Ben Horowitz: The Struggle
- Steve Blank: Founders and dysfunctional families
- David Cummings: Start With What You Know – 7 Entrepreneur Lessons Learned