I admire you, founders.
I have to hand it to you. In a world full of 800-lb enterprise software gorillas and thousands of other cool startups with dreams and incredible talent, YOU decided to craft a new company.
And you aren’t out selling talking razors, better mattresses or bio-sensitive yoga pants. Let everyone else come up with some consumer product fit for pitching on Shark Tank to later end up in SkyMall.
Nope, you want to change the core. You are intent on changing how businesses work.
Hopefully, you also found a co-founder. After all, nobody wants to invest in a company without at least one co-founder, right? A sole founder might look like a megalomaniac. Let’s not get into that selection process too much as that’s not my purview here, but if you find the right one, you just know.
Having mostly failed and sometimes succeeded in the startup realm myself, I have a great appreciation for founders like you. You have a vision and put it all on the line. I salute you in your endeavor.
But I’m also here to share some tough love — and share a few common startup founder statements to reconsider in telling your own story, before you start sending out press releases and trying to brief the analyst community.
1. ”There’s no other company like us” or “We have no competition.”
This first statement is a canary in the coal mine for relevance problems. You don’t want to be totally unique, because a market with no competitive interest means there will be no active buyers looking for your product.
Try to welcome newer competition as a sign of growth and interest in your space. Celebrate the market the big established firms are building. You are standing on the shoulders of giants.
If all these players weren’t out evangelizing your category, you wouldn’t have a category to grow into. If they weren’t building products that left a gap for you to fill, you wouldn’t have much value to offer their customers.
I often wonder why founders think their ideas are so unique, as opposed to the overall customer experience their company intends to deliver. I’m pretty sure I’ve heard the ideas before in some form.
What matters is how your product creates much more customer value than products that exist today, and how your team will execute on delivering it to market.
2. “We’re 100% bootstrapped / We’ve grown 100% organically”
There is something very romantic about the idea of not having to deal with the VC community, with its clubbiness in selection preference, high equity obligations and notoriously harsh treatment some founders mention.
If you are somehow fueling your business solely on customer revenue, more power to you. But I don’t generally see this statement as a positive indicator by itself. While it is possible to build a solid, steady business without investors, I’ve seen very few startups that managed to lift to great success and get ahead of their market without any outside capital.
What’s really more important to talk about here is the quality of any investors you have on board. Do they understand your space intimately, and thus, their involvement is a meaningful endorsement? Do they roll up their sleeves with your company, and try to provide resources and connections that help you out? Do they let you do what you do best?
That said, there’s also little value in dwelling too much on having investors that also invested in Facebook or Google or something. Even the best VCs with famous home runs are doing great if 1 out of every 8 startups they fund succeed. Better to focus on your customers.
3. “We spend all our money and effort on R&D.”
It’s cool that you are engineering focused. I expect you to have smart people with real geek cred behind the technology. You can’t fake that.
Some founders like to brag they still code every day, or that they’ve only hired developers so far. Should all hands really be working on the technology, though? If you look at the track record of the companies that make it, and those that don’t, you find innovative technology in both camps.
But the companies that build audiences, and build meaningful relationships, seldom fall into the failure category.
Most often, the engineering-focused firm stays that way, because they don’t want to invest in marketing, or a strong channel. They don’t hire business people who can make deals that benefit partners, as well as themselves.
Many tech startups also arise out of services companies. These companies have a hard time fully shifting away from services revenue, saving consulting side-gigs for the overabundant engineers on staff, and in so doing, chasing away many integration partners.
Or perhaps they don’t want to sell within some other vendor’s ecosystem — because their own technology is clearly superior. Playing this zero-sum game never pays off. Co-existence and heterogeneity are good things for the customer, so they should be for the vendor.
Only companies playing in the open source movement can easily claim extreme R&D imbalance as a point of pride. After all, their channel is by nature a technical community, and they need to welcome and support developers in order to keep the software active and relevant. In these environments, the technical founder still functions as more of an evangelist anyway.
4. “My startup is way better than the last company I worked at.”
We all have past lives. Unbearable gigs we’ve survived.
However, for a founder, dealing with the sins of the father is a difficult path to startup success. By slagging your former employer, it sounds more like sour grapes than thinking of a better way.
The coolest stories in this space are the ones where the new founder is able to return to their alma mater, and help them solve unmet customer needs.
You have a natural advantage working in familiar terrain, and you already know the customers. Take advantage of it.
The Intellyx Take
“All of our customers come from word-of-mouth.”
Well, I’m sure someone said something to help you out along the way.
I’ll always enjoy hearing and retelling the stories of founders. You are courageously trying to make a difference in how the world’s businesses operate, on a grand scale.
You’re the one taking the risk. There are hundreds of books you can read on founding a company, so who am I to tell you what you don’t need to say?
It’s not me, nor any analyst, author or commentator that you should be intently listening to.
Hear and understand your customer better than anyone else, and you’ll know what to say. Success follows that script every time.
©2019 Intellyx LLC. Intellyx publishes the bi-weekly Cortex and BrainCandy newsletters, advises companies on their digital transformation initiatives, and helps vendors communicate their agility stories. Sharing or reprint of this work, edited for length with attribution is authorized, under a CC 4.0 License. At the time of this writing, none of the companies mentioned above are Intellyx customers, and it’s not about you. Image Credit: Dennis van Zuijlekom and Faunng, open source, Flickr.
