Everyone loves a good success story: The tiny startup that went huge overnight, the simple idea that changed the world. These kinds of stories make it sound easy, but the road to startup success is rarely so smooth.
For most startups, in fact, success is first defined by survival, and failure is often part of the process. That was the message at our most recent FutureTalk event in our Portland, Ore., engineering headquarters. Hosted by NewTech PDX founder Tyler Phillipi, a self-described serial entrepreneur, storyteller, and community builder, the evening featured Jon Maroney and Dave Shanley offering generous answers to heartfelt questions about the highs and lows of startup life.
Having formerly developed mobile apps for big media companies including the Wall Street Journal and Reuters, Jon now leads the Oregon Angel Fund’s collaborative pre-investing activities. In the past year, OAF has invested $8 million in early stage tech companies based in Oregon. Dave, meanwhile, earned his startup stripes when he took CrowdCompass from his apartment through acquisition to IPO. His latest project is Notion, a home-monitoring app.
Learn hard, learn fast
Both panelists told fascinating stories about their failures along the way. For Jon, it was the first company he ever started, which provided photo archiving services for plastic surgeons. Just when things looked set to take off, his partner jumped ship—and then Jon ended up doing the same. “You’re going to run into lots and lots of failures,” he said. “Be open and responsive” to learning from them.
Likewise, Dave described a difficult period in the early days of CrowdCompass. Operations were ramping up, but revenue was still paper-thin. “It was a total wildcard whether we were going to be able to make payroll each month,” he said. Eventually, he had to lay people off: “the definition of failure.” But then, against all odds, the next month saw things turn around.
The takeaway? You learn from your mistakes the hard way, said Jon. But you learn fast.
Time to stop and think
Aspiring entrepreneurs are seduced by the prospect of solving a problem for everyone while solving their own problems at the same time. But that romantic notion belies the hard work of getting from zero to somewhere solid, Jon warned. Not to mention getting comfortable with the fact that there’s no pre-existing road map to guide you towards success.
In that environment, sticking to your vision is important, but so is balancing it with reality. “The more ‘new’ the thing you’re trying to do is, the greater the risk of failure,” Dave agreed. But that doesn’t mean pushing blindly ahead, hoping for the best. In fact, it means the opposite. Dave’s mantra? “The best time to stop and think is right now.”
Strategize now, optimize later
One of the biggest pitfalls for startups is focusing exclusively on product development without simultaneously working to understand and increase customer interest. “The sooner you can ship something and get feedback, the better,” advised Dave.
Premature optimization can feel like the right move, but it usually means taking on excessive technical debt—debt that you won’t be able to pay off later if no one wants your product. A wiser strategy is to find a way to deliver value incrementally along the path to realizing your vision. That, Dave added, is the true art of the startup.
Intentional tensions and competitive collaboration
How do you build the perfect startup team? That question was on the minds of several audience members. An exciting new idea, Dave said, can inspire a mad rush to put together a team. But such haste can be disastrous. Your team is the engine that moves your idea forward, so build it carefully.
For his part, Jon recommended fostering a culture of competitive collaboration. “Get really smart people, then set up intentional tensions that drive everyone to be better,’ he advised.
To hear more tips from Jon and Dave, including how to know when to bail on a project and how to deal with the fact that “you don’t know what you don’t know,” listen to the full FutureTalk in the (audio-only) video below:
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