9 truths no one will tell about startups.
and that I am telling because no one knows where my Mum lives…
1- Big Corporations love startups and will do everything they can to make sure that those startups in their field shall remain small, cute and harmless forever.
There are only a few thing that make me lose it as much as the hypocrisy of old businesses that while under the spotlight launch innovation programs offering mentoring/acceleration/co-working/free beer, but, at the same time, behind the scenes, lobby hard to prevent any new player access to its market, with politicians’ complicity. Everybody wants to innovate in traditional big business, but no one seems to admit publicly that the very objective of a truly ambitious startup is to eat your cake, not help you make it fancier. Hilton could never have collaborated with Airbnb, taxis with Uber or NBC with Facebook. Traditional business is caught in the fear of missing out on the trendy digital innovation just as long as its own bottom line is not affected. Financing co-working spaces, incubators and hackathons is nice. Lobbying to prohibit Whatsapp, prevent fintechs entering your field or creating a special tax for new services like Netflix, way less nice…
CEOs love the “garage startup”, but when a gigantic transformer robot comes out of the garage, that start stealing customers, they run towards politicians to beg for regulation. Every startup founder should keep that in mind from the start and focus on building the robot.
2 — Expeditions to Silicon Valley is tourism, plain and simple .
Innovation is born out of a company culture that allows members to express loud the crazy ideas freely, and gives him or her freedom to experiment without risk losing the job. Tesla’s factory is beautiful, but never turned anyone into Elon Musk.
Thinking that visiting Silicon Valley will make you innovate is the same as visiting a gorilla in the zoo and hoping it will help stop you going bald.
3 — The majority of mentors for “startups” and “innovation” have never had experience with neither startups nor innovation.
Those who know do. They also generally have an idea that, as Confucio said, “Experience is a lantern hanging on your back. It only sheds light on the path you already took.” The most experienced people usually give you advice in the most humble and cautious manner. The ones which are the most confident in their own advice, with no perception of the fact that every situation is different usually never created anything close to what you’re building.
The ones daring to call themselves “innovation mentors” usually aren’t, and those who are would never dare calling themselves that.
4 — Startup Business Plans of more than 12 months are just BS.
By definition, a startup is born without a business model. What you need to plan are costs to survive the first year. Enough time to assess if 1/some users got interested and 2/ there is a way to turn this interest into revenue in a scalable way.
If a potential investor asks you about the cash flow hypothesis in the fourth year’s third quarter, run.
5 — Design Thinking is cool, but Product Coding is cooler.
If the founding team of startup is really good at design brainstorming sessions but needs help setting up a landing page, I recommend you jump off… In the valley, the joke goes: “to value an early stage startup with just a team, you add $300K for every programmer in the team… and take off $500K for every MBA.”.
At early stage, every single founder must be focused on user experience, either helping build the product or getting feedback to prototype the next feature. The rest is just a waste of time.
6 — One“ serial entrepreneur VC” is worth Ten “McKinsey VC”.
Ex-McKinsey are always very smart and articulate minds, but in most cases the only experience they have is of designing established players’ strategies in big old markets. When the time comes to convince the crucial CTO to join a team of two founders, close a deal at any cost or pivot your business model, always look for the intuitive gut feeling of someone that already did the trick, with the humility proportionate to all the scars that came with it. But I don’t want to trash talk McKinsey, at the end of the day One “McKinsey VC” is still worth Ten “Banker VCs”.
A VC that came from the experience track of entrepreneurship knows how hard it is first hand. And just that is worth gold.
7 — If you keep your startup project a secret, you’re going nowhere… fast.
When a startup founder explains to me that he can’t reveal the idea because “it’s not ready”, I think “poor guy”. First because if he has to wait for the thing to be ready, he’s never going to launch. But most importantly, because the most crucial thing you need at first is gathering feedbacks about the problem you try to solve, about your pitch and the appeal of your solution, way before it is even ready. Keeping it to yourself is just nonsense. And if the idea is really worth it, chances are you already have ten competitors working on the very same thing and the race will be won by those able to build the best dialog with potential users. So I recommend you talk about your idea to every f**ing single person you engage a conversation with.
And if your grandmother didn’t get what your startup does, you have a pitch problem, not her.
8 — Birth stories of famous startups are all storytelling to create fairy tales.
Don’t believe the official history, even Mark Zuckerberg, far from the confidence of his character in the Hollywood movie, had to be convinced by a friend to open a bank account for (the)facebook because he was not sure it would get anywhere. Ebay was not created to complete the founder’s girlfriend’s Pez dispenser collection… Apple wasn’t even born in a garage!
“History is a set of lies that we decide to agree upon.” Napoleon Bonaparte. Don’t waste your time mimicking fake fairy tales.
9 — If your only objective is to get rich, choose another career, seriously.
Gathering a team to create a startup is extremely difficult, convincing a first customer is extremely difficult, raising funds is extremely difficult, growing 3 digits per quarter is extremely difficult, finding a business model is extremely difficult, and reaching a point where an exit opportunity to sell your company for a good price is the hardest of all. So if you’re in all of that for the $, enroll in a trainee program in a Bank because your chances are way higher. Or join a startup that seems to be on track to something great. At Facebook’s IPO, more than 1000 employees became millionaires overnight. And the 1000th employee at facebook made more money there than 90% of Silicon Valley startup founders who managed to have an “exit”.
Startup is an adventure, but probably the hardest and least guaranteed path to a retire rich.
My name is Mathieu Le Roux, cofounder of Le Wagon Latam, a coding bootcamp for entrepreneur. I have been a VC, a reporter, cashier in a supermarket, startup executive, bellboy in a Parisian palace, entrepreneur and Tennis teacher, but not in that order.
Translated with the help of
.
