Waterloo is a great place to launch a startup (particularly a tech startup), and one of the many reasons is the people that live or frequent the community. Yesterday I had lunch with Albert Lai and the conversation turned to the young entrepreneurs starting their first businesses; the consensus was that they were far too bothered with the efforts to build a VC-funded business, and weren’t spending enough time just building a successful businesses. My gut reaction, though, is that this is our fault. By virtue of how we’ve taught them and spoken with them, they have become way too risk adverse and way too dependent on outside money.
Fear & Dislike of Failure
We have trained students and young adults to fear and loathe the word “Failure”. Missing revenue targets, missing user expectations, missing profitability goals – those are all misses not failures. Missing is part of learning and training any skill. Ask any professional athlete and they’ll agree – they missed their goals far more often than then hit them. Missing is part of the expected learning process in sports. However, in the land of business, we seem to have forgotten that. By placing so much emphasis on the exit rather than the journey we have minimized the efforts required to be a success, and we have reinforced the many ways to mitigate your risk. These days, a student is led to believe that if they only take one more course, run one more survey, or talk to one more user than can come up with a risk-free formula for success. That’s not going to happen; no such formula exists. Instead, here are a few points and tips for other young entrepreneurs:
- Miss fast and often (I’m sure you’ve heard this one before)
- Start now, before you have too many responsilities (like a house or family)
- People won’t invest in your idea if you haven’t invested in it
- Try early, while you’re young enough to get away with “young and learning”
- Find a mentor, and share your misses with them: they can help you learn from the misses more quickly
Too much emphasis on VC
My second thought is that we spend too much energy trying to “capitalize”, “commercialize” and “monetize” ideas. These verbs innevitably end with a 10-slide powerpoint presentation that gets shopped around to the usual suspects. Like above – part of the problem is us! There are so many VC bloggers out there, and so many people out there writing posts about “How to pitch VC” that it’s all a young startup will find. Rather, your first bet shoud be bootstrapping. When you bootstrap your venture, you keep your equity, you can get started more quickly, and you carry a lot less risk and fewer expectations. If it’s your first business, it can also be a brutally rutheless teacher, and you will grow from it. So, to celebrate that, here is a list of posts reinforcing the bootstrapped startup:
- Power Equations
- Stop Pitching and Focus on Building
- Walk This Way: Lessons in the Fine Art of Bootstrapping
- Forget VC Money, Fund Yourself
- 2009 Will Be The Year Of The Startup
If you know of any posts I should add to the list above, just let me know.