12 Thoughts & Theories (Pertaining to Pervasive Problems & Pitfalls)
(Pertaining to Pervasive Problems & Pitfalls)
1) Mismatched Skill-Sets Among Founders... What are you GREAT at? Startups are difficult enough as it is, but I assure you it's much MORE difficult if you don't have GREAT people actually working on parts of the business that they're actually GREAT at! (full column soon)
2) Lack of Self-Awareness/Acceptance of Strengths & Weaknesses... (full column soon)
3a) "There's no such thing as a bad [xxxx]"...
3b) "The first step for an entrepreneur is to come up with an idea that..."
WHAT?! WHY?! This is a big reason why so many startups fail (in my opinion) - because MOST entrepreneurs think they are "an idea person" and MOST actually are NOT! You can be an entrepreneur without it being YOUR idea! (Just like you can be an entrepreneur without it being your backend code or your web design!)
4) Coming Soon: Several sports examples/analogies [Michael Jordan: Basketball v Baseball... Why Bill Belichick doesn’t throw, catch, run, block or tackle... ] (full columns soon)
5) Optimism vs. Realism - and why I think those "Never Give Up!" and "Winners Never Quit!" motivators do more harm than good! (full column soon)
6) Problems with Words & Definitions:
A)“Startup” (Ridiculously - and dangerously - broad / vague / undefined)... [Analogy: It would be ridiculous - and potentially dangerous - to constantly talk about "Water" regardless of whether you meant rain, ice, steam, puddle, or river, or ocean!] (full column soon)
B) "Entrepreneur" (There are MANY types! Entrepreneur does NOT (necessarily) mean CEO, or that the startup was your idea, or... (full column soon)
C) “Best Practices” (Dangerous when ignoring type, size, stage, etc.) (full column soon)
D) “Success" vs. "Failure" (Spoiler: It's NOT as obvious a distinction as you'd think!)
8) The problems/pitfalls of using OUTLIERS as benchmarks... (full column soon)
11a) Investors don't invest in one company; they diversify their portfolio to mitigate risk and increase chances of big wins. I believe entrepreneurs/startups can (should?) now do that too! (more soon)
11b) I believe the ideas of "you must be all-in" and "you must have one sole focus" are somewhat outdated from a time (just a few years ago!) before the cloud and AWS and WordPress and Shopify and Facebook Ad-Targeting and countless other services made it MUCH easier/faster/cheaper to launch MVPs! (more soon)
11c) Why don't more startups proactively anticipate their pivots? Why not use economies of scale and shared resources to simultaneously build/launch your next pivot (or 3!) BEFORE you're actually forced to? A-B testing is common in marketing campaigns, why not A-B test your core startup/product? (more soon)
11e) What if we start thinking of “Startups” as “Products”... and “Products” as “Content” - while continuing to think of "Content as Marketing"??? [Note: This will be a central theme of the entire "Whatever Network" master plan.]
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The Particularly-Prevalent "Puzzle Pieces" Problem:
Step 2. Read it again; use the drop-downs this time
1) IMAGINE that you have...
...the very real potential to be HUGE - and make MILLIONS of dollars!!!
2) NOW, imagine that you...
...actually take it to the next level and truly realize your (multi-million-dollar) potential!
IMPORTANT: Take a moment to notice how dramatically the situation changes with / without those drop-downs! This simple exercise not only illustrates some of the most common problems/pitfalls in the startup world, but also represents one of the biggest (simplest!) opportunities for improvement!
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12 Improvement Ideas & Initiatives...
“More than 95% of startups will FAIL”
But WHY is that accepted as
“just the way it is”?!?
12 Improvement Ideas & Initiatives:
1a) Debt? No. Equity? No. BOTH? YES!
1b) The "Magical 10% Theory"... My key premise is that adding an additional 10% on a round of funding would almost NEVER be a big deal (or a deal-breaker) to an investor at ANY funding level. (The difference between investing $200k and $220k? The difference between $2 million and $2.2 million? If you're comfortable with the investment level of the former, then the latter isn't likely to be a deal-breaker.) HOWEVER, almost magically, the dollars that comprise that "insignificant 10%" will simultaneously represent a HUGE (game-changing!) percentage of the PREVIOUS round...
I believe that investing (in Idea Stage and/or Seed Stage startups) would become SIGNIFICANTLY more appealing if investors knew that they would receive that "Magical 10%" from the NEXT round of funding (making them whole or closer to whole, while still maintaining their upside/equity). It would:
- increase the likelihood of successful investments (because, in addition to betting on the ultimate success of the company, they're also investing in the ability to simply make it to the next/larger round of funding - a much more frequently attained milestone).
- AND, it would put more money back in the pockets of seed-stage investors (much sooner), thus making more funding available to other startups!
- and I believe all of that could be accomplished with MINIMAL effect on investors of subsequent rounds...
I'm not saying it would be easy to start this movement, but IF it could somehow (magically?) become a standard practice, I truly believe the "Magical 10% Movement" could have a magical (game-changing!) effect on Startup Investing across the board!!!
1c) "Investment Dollars" vs. "Investment Hours" - In a nutshell: Many Founders spend A TON OF TIME trying to get funding. In MANY cases, that funding is needed to hire employees. I believe that SOME "entrepreneurial employees" out there would actually be interested in that equity (rather than just the dollars that the Founder is attempting to sell the equity to attain)... Instead of struggling to find X dollars in funding (to use as salary to pay employees), why not entice employees by letting them work for that equity, the same way they would work for the dollars that you're trying so hard to find. (Equity-Earning Employee-Entrepreneurs? #AlliterationAddiction) I'm not talking about traditionally insignificant amounts of equity via stock options with long vesting schedules (like startup employees are currently duped(?) into viewing as a valuable part of their compensation package). I'm talking about REAL chunks of equity - the same kind of equity you'd give up to a real investor (to get the funding necessary to higher those same employees). Every hour/day/week/month of employment would be tied to an amount of equity (based on value of the employee and valuation of the company) - just like every dollar of funding from an investor is tied to an amount of equity based on company valuation. (The primary difference is that you generally get the full round of funding at once whereas the Equity-Earning-Employees would be earning their equity one hour/day/week/month at a time, but that's just a little math/legal work to be done.) If you're a founder struggling to find funding to build your team, then what do you care if you give X shares to an investor for Y investment dollars so you can turn around and pay that Y dollars out in salary - OR - if you cut out the middle man (investor) and use that equity to pay employees instead of salary? (Note: Common response: Most people can't work for no salary. Ok, so they'll work 20 hours instead of 40, get half as much equity, keep their full time job, and either it'll take twice as long or you hire 2 of them... not ideal - and obviously this model won't work for all people/companies - but still could be an interesting alternative for startups who struggle to find funding!)... (more soon)
3) Multiple Horses in the Race (more pros than cons!)... (more soon)
4) The "CoFounderator" - a new incubator / accelerator model based on several of these "ReThinkingStartups.com Strategies"... (more soon)
5) Startups Within Startups - whether it's proactively anticipating a future pivot and starting it now or even an entirely different concept, when else can you start a startup and benefit from so many shared resources and economies of scale? (while avoiding all the traditional time-consuming parts of starting a startup - finding office space, interviewing/hiring, all the learning curves, etc. - you already did all that!)... (more soon)
6) The S.W.A.N. Startup - "Sacrificing Weekends And Nights"... (more soon)
7) Startups For Students - Spring Break Startups / Summer Startups... (more soon)
8) Severance Startups - That sucks that you got laid off. But what a fortuitous opportunity if you've ever been interested in starting (or working with) a startup but lack of couldn't afford to work without pay... No better time to start a startup then when you're working on someone else's dime!
9) Starter Startups... (more soon)
10) Startup Stupor... (more soon)
11) Pitching For Partners ... (more soon)
12) Economies of scale, shared resources, a cross-promotional network effect... THE WHATEVER NETWORK!
Background & Bio
Jeff Goldblatt is an Atlanta-based entrepreneur with ~15 years experience with various B2C startups (and an MBA from Emory University’s Goizueta Business School). As creator of The Rejection Hotline® (and numerous other viral ventures that have engaged audiences of millions!), he became a nationally-recognized authority on viral media and content creation —
[Jeff's extended bio - including 12+ years creating "Viral Whatever" - can be found at JeffGoldblatt.com]