Startup Hack! The one trick they don’t teach you in founder bootcamp

The secret Silicon Valley doesn’t want you to know

Ryder Kessler
Nov 4 · 4 min read
The Fall 2017 Ignite Class

I was recently privileged to speak to a classroom full of newly minted startup founders, spearheading their projects as part of the Ignite Alpha program at the NYU Entrepreneurship Institute.

Their ideas were incisive and inspiring — ranging from facilitating employment for the formerly incarcerated to driving sustainability by recycling otherwise wasted coffee grounds — and their questions were sharp:

  • When’s the right time to set up legal infrastructure, like incorporation and IP protection?
  • What’s the best way to map out product development—soliciting feedback from prospective customers, building a beta version of your solution, and knowing when you can try to go full scale?
  • How do you find the right cofounder, and how do you know when to start paying full-time employees — including yourself?

They’d heard a bit of my story launching DipJar: scraping together a beta version of the hardware, software, and payments system to test at a handful of New York retail and nonprofit locations; joining a hardware startup incubator to build a scalable version of the product; convincing my cofounder to join me as a full-time partner; raising a larger-scale financing and building out a team. And so I had a little credibility in being able to answer their questions.

They were encouraged that it could be done. With the right supporters and team, an idea can be taken from the back of a napkin to a national footprint. But they wanted to know: How had I known how to sequence each step? How had I gotten the early investor buy-in I needed to prove out the concept and scale up?

The answer to all of their questions, of course, had a crucial common thread: money. And, more specifically, the challenge of needing it before you can get it.

  • An investor will want to invest an incorporated company with protectable IP — but both cost a lot to achieve.
  • An investor will want to see feedback from the market — but beta-testing requires significant spending up front.
  • An investor will want to see a talented team — but an employee or cofounder will want to join a company that can pay them.

That paradox is why it’s so hard to jump onto the VC-backed-startup hamster wheel. (That’s a separate paradox, of course: venture investors will want growth that then necessitates and encourages even larger-scale investment.)

And so I shared my true startup hack — the one they don’t teach you at founder bootcamp. The secret to getting a startup off the ground? Economic privilege.

We like to tell an entrepreneurship story in which anyone can launch something new. Have a great idea and enough grit, and you can join the pantheon of the self-made.

We saw this assumption in full force after the Deadspin author walkout, with entrepreneur and investor Jason Calacanis wondering aloud on Twitter:

I just don’t understand these @deadspin writers, if they are so offended by the owner’s plan why don’t they start their own publication?

So much theatrics, so little entrepreneurship

If you know better, go buy a $10 domain, get a @squarespace site & get to work!

But entrepreneurship, of course, requires more than $10 and a dream. What about surviving until you can draw a salary? What about childcare and mortgages and healthcare?

I had to come clean to the NYU Ignite Alpha founders: the way I was able to short-circuit launching my startup was having privilege many founders just don’t share.

As a PhD student, I had a job that provided benefits and time flexibility.

More than that, I had real resources to draw from: a small five-figure loan from my parents covered the initial pilot product development to get DipJar into a dozen or so outlets. That pilot test garnered national press, generated encouraging early data, and secured our invitation to a startup incubator—where we then got access to more investors and more development resources.

Most of all, I had a favorable personal risk profile: I could start a company, fail, and know that I’d still have a roof over my head. Many prospective entrepreneurs out there are surely smarter, grittier, and more energetic than I am — but taking the plunge requires the context to know that you can fail safely. Plenty of people can’t, and that doesn’t make them any less worthy of having their ideas fostered and their innovation respected.

Presidential candidate Andrew Yang wrote about this back in 2016: “The only startup founders who can embrace failure are the ones privileged enough to survive it.” His piece cites the statistic that 80% of startups are self-funded, and that most founders are white men (like me) with a lot of other privilege to draw on.

So, unfortunately, my startup hack wasn’t one the Ignite Alpha cohort could replicate at will. Still, they appreciated an acknowledgement of the tough reality facing them.

We have to see the situation clearly if we want to make it better. The best way to encourage the entrepreneurs of the future is to face up to the secret startup hack many founders have used to get ahead, and then to work to offer the same support system to those who might not have it at hand.

What we shouldn’t do is armchair-advise prospective founders to simply hustle harder. That’s a hack that only hacks think will work for everyone.

Urbane Sprawl

The disorganized spread of culture and cultivation

Ryder Kessler

Written by

Progressive political strategist and manager • Social impact technology entrepreneur • New Yorker

Urbane Sprawl

The disorganized spread of culture and cultivation

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