Sort of an Open Letter — to the Future Scientist-Entrepreneurs
You are smart, resourceful and cannot imagine working a job without science. You think you are open to the idea of starting a company to bring your discoveries and inventions towards commercialization, but you are on the fence. Even though the traditional route is a dead-end, starting a company is certainly neither conventional nor dependable. However, now that you have just received the nth rejection letter for yet another a faculty position, you are seriously considering your alternatives. Perhaps you should forgo the meager postdoc salary and live without a paycheck altogether. Would you have what it takes to create and lead a company? Tough choice.
Many startups fail. Word on the street is that for every ten startups, there is (hopefully) one unicorn. The one success will cover the losses and allow investors to re-invest. Too many experts and analysts have tried to dissect and examine all kinds of startups to identify the formula of success. But time and again, they often come up with interesting theories but never the formula. Why? Because there is no one perfect way to build companies. Building a successful company takes a village, rides on timely opportunities, and only occasionally involves the world’s best technologies.
Surely, if you do all the right things and work hard, you will be successful. That was what we were all told, wasn’t it? Frustrations are inevitable. However, frustrations will not take you to the places you want to be. You need to acknowledge the frustration, step out of the structured mindset, and channel the frustration towards something positive. Think like a scientist. Go back to the basics. Build a plan. Form a hypothesis, and investigate from there.
Start from the motivation of the research that leads to your invention. Who would need such an amazing creation to solve their problems? The key is to appropriately identify the unmet needs and match your solutions to the target users, preferably users who would pay for your solutions. Figure out how your product and business would fit into the ecosystem — in other words, build your value proposition — and profits will follow. Many successful entrepreneurs have a strong sense of purpose and have a vision of how they would change the world for the better. It would most likely take that much of conviction to overcome the challenges entrepreneurs face. If you start with aiming for the profits, I am afraid you would meet failures head on very quickly. And if you just want profits without the hardships, you would probably be better off going into investment banking, and definitely not starting a company.
As eluded earlier, technology is only part of the equation. Contrary to popular beliefs, superior technology is never a guaranteed success. Stars need to be aligned. People with different expertise need to come together to make the magic happen. One of the common mistakes of inventors or entrepreneurs is to falsely believe that if they ever tinker with the design a little more, they would produce the most superior product, and consequently the products will fly off the shelves. Years later, when they finally emerge from their workshops and unveil the most perfect products, they find themselves in their first iteration of customer discovery. Oops, the product is not what the consumers want. The idea here is the superior technology would have to meet the needs of the customers in order for the transactions to happen. Thus, instead of making the most perfect product, entrepreneurs should start with the Business Model Canvas, conduct customer discoveries, and build a compelling value proposition.
I think that portraying venture capitalists as sharks is rather misleading. Despite the misconceptions, venture capitalists need to be skilled psychologists, whether or not they are shark-like. Ultimately, they invest in people — those who have the desired entrepreneurial traits and are equipped with the right products, accompanied with an attractive business plan. In other words, investors evaluate entrepreneurs by assessing entrepreneurs’ track record, personalities and above all, qualities like tenacity and grit. As the entrepreneurs solicit investments, besides having the vision, you will need to demonstrate the right skillsets and the capability of pulling together a team of individuals to execute the business plan.
Very often, many startups fail not because of the technologies but because of people problems or that they run out of capital. Statements like “I am not capable of managing people” or “I am not a business person” are terrible excuses. Here is another thing about being an entrepreneur — you need to learn constantly. In many ways, it reminds me of a Ph.D. thesis project. If there is something that you know nothing about, great — learn, sink or swim. Leverage your technical capabilities and strengthen your weaker skills or hire somebody who can complement your skillset. Repeat the process until you get to where you want to be.
Do you have what it takes to start and run a company? Would you be able to create a job for yourself and work for yourself? If you are wondering, start now, start small, and start planning your experiments. Test your hypothesis and repeat. Do what you do best — approach it like a scientist.