WHY ARE STARTUPS HARD?

David Goehring

Is it because we’re trained and educated in to a different way of thinking or are they inherently hard?

This post from Derek Sivers C Dixon got me thinking. From the first day of school we are trained to think in a certain way. Essentially, we’re all managers or at least that’s what we’re expected to become.

Be a part of the machinery. Optimise it, tweak it, but don’t disrupt it! That’s what school teaches you.

But we know that entrepreneurship is different. Steve Blank, Eric Ries and the rest of the lean startup movement have taught us that a startup is a completely different beast than a company with an established business model and product.

Instead of optimising you should be experimenting.

Instead of tweaking you should be pivoting when the experiments fail.

And disruption is on top of the agenda.

With the lean startup process we now have the manual (sort of) for doing it. But it’s still so darn hard. The manager within us keeps holding us back.

So, I wonder: are startups hard because we have to fight the instinctive urges that one and a half decade of management thinking training (aka “school”) has programmed us with or are they hard because, well, it’s simply hard? What do you think?

IS THE INNER CITY SHOWROOM A SUSTAINABLE BUSINESS?

Online shopping is growing at a rapid pace here in Sweden. At the same time we’re seeing strong competiton amongst shopping malls, all fighting for the same customers. Where I live, in Malmö in southern Sweden, more than 300 new storeshave opened in about a year, with the mighty Emporia as the main growth factor.

Problem is of course that the customers are moving over to the internet. With 15-20% yearly growth of online shopping, you don’t have to gaze too far in to the future to see a major chunk of the consumer money going from the stores in the malls to the web.

So what happens to the store as we know it?

One idea I’ve been toying around with for some time is the inner city showroom. A place where you can test, touch and try things but not actually buy them. More like an exhibition than a shop. Of course there would be internet terminals in the room where you could buy, from associated online shops, but you wouldn’t be able to buy stuff over the counter.

How does this place make money? It could charge money from the online stores, either as a sort of rent for their products to be shown or as an affiliate when people buy things. It could even charge the visitors. After all, people pay to visit exhibitions. 

Don’t know if it would work but I think it’s high times for anyone working with physical stores to consider their future in a world where most of the consumers money is spent online.

What do you think? Is it a feasible idea? Perhaps it’s already been tried somewhere?

SO MANY QUESTIONS

It’s never a straight path. Get used to it.

While working in an established business certainly can be a challenge sometimes, I don’t think it compares to the constant uncertainty of a startup.

There are just so many open ended questions that keep popping up. Let’s just try and list a few from an early stage startup project.

What idea should I focus on? Can or should I do more than one startup project at once? What co-founders do I need? Should I look for outside investments? Should I take a bank loan? Should I quit my job? Should I try and do a high risk/high reward startup or a lower risk/lower reward lifestyle business (the difference can be nothing more than the amount of marketing dollar you have)? What markets should I target? Do I need a mobile app if I have a web site? Do I need a web site if I have a mobile app? How should I price my product? How should I receive payments? What cloud platform (if any) should I use? What technical platform is best suited for my product? Should I hire someone? What should I name my startup? Do I really need a .com domain?

Phew. I can go on like this for a long time. And this is just from the very beginning of the startup. No wonder so many people gets stuck and never take the plunge to get started.

WHAT IS YOUR SPEED PARADIGM?

How slow are you?

I read an article in a Swedish news paper about how the speed in which you reply to an email or SMS message is a status indicator. Slow replies means you’re more important and of a higher status. Since we once started a company focused on reach management (basically a muting service) the article caught my attention.

But as my good friend (and co-founder of the company) Nicolai pointed out, this is only true if you’re not living in a paradigm in which speed and information are of the absolute essence. If your goal is to preserve the status quo and change is rare, then yes, a slow reply means you’re keeping things as they are and protecting your status.

If, on the other hand, you’re on a trajectory of change and need to move fast, then a slow reply is counterproductive and prevents you from moving forward and acquire validated learning. 

It all boils down to if the currency of status is time or information.

Perhaps this is a good measuring stick for if you’re working in an innovative, forward leaning organisation or in a stale and static one? Are your managers fast to respond?

What are your thoughts? Do you agree?

EVERYBODY HAS A DREAM

My friend Christian once said: “entrepreneurship is about taking control of your own life”. 

Of course there are many definitions of entrepreneurship but for the individual actually doing the work, taking the step, rolling the dice – and not studying entrepreneurship on an academic level – it is close to the truth. 

I talk to a lot of people about entrepreneurship. I have started a few companies, had some minor successes and some failures, I’m not playing the big leagues in any kind of way as an entrepreneur but I have more experience in entrepreneurship than most people (even studied it on a master level). At the very least I have a strong passion for it and for what it can do to individuals and society at large (one reason we launched the Startup Dojo and why I’ve been doing various startup events).

So I often end up talking to people about their dreams.

What they really want to do if they didn’t do what they do now.

Most people have this dream of an alternative life. A different life. A better life. 

It’s almost never about money or luxury, it’s more about a different lifestyle or being able to have an income doing what your passionate about.

But it almost always remains a dream. 

This is what Christian referred to in the quote above. Taking control. Making the dream a reality. 

Here’s the thing: entrepreneurship is about introducing (making) change and that always starts with yourself.

Yes, it’s scary. Yes, it requires hard work. Yes, you may have to take a financial risk.

But the way I see it, living your entire life without trying to fulfil your dream is the biggest risk of all.

THE INCREDIBLE MOJANG AND THE ACCELERATION OF DISRUPTIVE INNOVATION

It’s not every day you see a news article in Swedish on Hacker News, but the latest profit numbers from Swedish indie game maker Mojang came in yesterday and the startup community of Hacker News jumped in to discuss them.

It’s simply amazing that a small one man company can grow so rapidly. It wouldn’t be possible without the disruptive power of the web behind it. Everyone has a global audience by their fingertips (although it’s not easy to reach it). 

If you’re working in a larger, more established business there’s an important lesson from the team at Mojang AB: your most fierce competitor may not even have moved out of the garage yet, but they can overtake your market faster than you can say “TPS report”. They can hit you where and when you least expect it. The only remedy is to embrace change and become an innovator yourself.

That’s the thing that fascinates the Hacker News community. Everyone (well, almost) in that community wants to be the one taking down a large company and disrupting their market. There are thousands of smart people out there working on something that may totally change the rules of the game YOU are playing right now. Watch out for the Mojang of your market.