Failure comes in many forms. Mistakes should be routine and used to build knowledge and context for your evolution. Protecting yourself from Epic Failure is too often the way people think of mistakes. In my experience, the failure to seize opportunities is the biggest tragedy. Design your start-up to have the agility, ears and the attitude to assess and seize opportunities.
You’ll look at your idea differently as you live it, you’ll add color. Chances are you’ll chop it up and reassemble it into a new shape and add real life texture. The value of an idea is only realized when it’s been applied, deconstructed and reconstructed in real life. Don’t hold onto the idea, it holds back your value creation.
My Mistakes.Some advice from a well-worn path. Startup Camp Montreal #7January 20, 2011 Perry Evans
I’m not a startup junkie. I just reject working for someone else, or working on someone else’s ideas. I could stop anytime. If only I could turn off those little voices inside my head.
I hope I can help you deal a little better with your little voices. Been where, done what?
Behind every success… I left MQ pre-IPO to do my own thing, leaving 2% unvested equity. 12 months later MQ exited to AOL for $900M, all vesting accelerated. I exchanged a 6-month old 2-person start-up for 4% of a $80M public company. I agreed to lock up my shares for 12 months: $6 > $24 > $2 I let a company shift from a product business into a services-driven business: customer driven, easy revenue Reduced exit value and narrowed choices I bought into the strategy of growth via acquisition In most cases, this is an excuse for not fixing your current business I didn’t force a shift from platform to application stack when a golden opportunity presented itself
Failure and success are intertwined. Indecision and success are incongruent.
You have to fearlessly lead the team, you are afraid to show weakness to investors, where do you turn? Build your inner circle: Mentors, Advisors, Independent Board Members
Your capital structure will determine the quality of your exit. The terms of EVERY round impact your choices on the next one. Take a moment of time to sanity test the relationship before you take money. Disconnect the capital from the person on the other side of the table. Don’t be embarrassed by what you don’t know. Don’t sign until you understand. Love your lawyer. Capital Equipment EQUIP
Your Value Navigation Dashboard NAVIGATE A large share of start-up decisions are “off map”, unintentionally Document the assumptions you’ve made that drive your value creation Build your value dashboard, record your proxies Write it on a piece of paper, and attach it to your monitor Circle the 2-3 things you (down deep) worry about the most Ruthlessly test and evaluate their achievement Connect it to your resource priorities Convert proxies to data
NAVIGATE Consumers will check-in in great numbers when the right discount offers are available. Proxies
Customers Competitors Market Actions Investors Adapting to the Swirling Elements ADAPT
ADAPT Stubbornness and passion are not the same. Proving yourself right is the enemy of value creation. Center your team on agility. Ears are the most attractive start-up body part.
Fast Failure & Pivoting ADAPT Make mistakes early, cheaply Listen very closely Absorb the input Gather as much data as you can for your value dashboard before you ask for money Don’t follow blindly, customer research is one verycritical signal, but not the only one.
ADAPT Pivoting A medicine for chest pain, sildenafil, was ineffective in treatment during the market trial, and exhibited certain side effects.
the incredible [& annoying] rightness of venture capital ADAPT Extract yourself, think for your business. As annoying as it can be: listen, learn, adjust They may not know your business, but you often ARE missing something. Usually it’s on a critical value driver
Homework? Audit yourself: Check your equipment Sketch out your value dashboard Check how well your resources and priorities map to your value drivers How well are your equipped for the journey How well have you de-risked the deal for your investors?