Stop Waiting For The Magical Startup Fairy

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Stop Waiting For The Magical Startup Fairy

 

I've been in the startup business for a while and it still amazes me how many founders (including me at various points in my life) have completely irrational views on how life at a startup is going to be. 

As it turns out, lots of success requires a sprinkling of luck to work, but counting on this luck to come up at the magical times is foolish.  So, stay up late at night working on the business and improving the product for customers -- not what deciding what you're going to wear to the startup ball when the magical startup fairy comes tapping at your window.  In other words, quit running advanced spreadsheet models on how your revenues are going to grow if you can get only 1 out of 4 users to tell their friends.  (See #1 below).

Founders:  Stop Hoping for Magic and Start Working

1.  Somebody's product is going to "go viral" this year.  Someone is also going to win the lottery.  Just not you.  Don't count on virality, but add some simple elements to your product that make them easy to spread.  This will increase the probability that your product will go viral to something slightly above zero (instead of zero).

2.  Venture capitalists are not swash-buckling risk-takers that are going to fall in love with your startup at first sight -- and write you a check.  Unnecessarily daring people do not become VCs -- the industry filters most of those out.   Work at not needing the money.  If you could use the money, get multiple VCs interested. 

3.  Smart people are not going to be lining up to work for your startup, without salary, just for the sheer thrill of "the startup life" and an ability to be associated with the brilliance that is your idea.  Be reasonable about it.  Expecting team members to take some risk for some time is fine.  But, that's not a great strategy to recruit a great team.

4.  Big company executives are not going to be inviting you into their wood-panelled offices with old leather chairs offering you increasingly lucrative partnership deals just because of "synergies" they might have with you.  Big companies have teams dedicated to keep an eye on startups like yours.  Just because they spend time with you doesn't mean you're getting a deal anytime soon.  Just because you get a deal, doesn't mean it's a good one.

5.  Google, Microsoft and others are not going to be falling all over themselves trying to acquire your company.  Acquisitions are great when you can get them.  But, they're usually complicated and take time.  Get great counsel.

Now, here's the good news.  If I happen to be wrong about any of the above ones and you do indeed get lucky on one of these things, the chances that you're going to get lucky on others goes up.  So, keep crankin'.  The magical startup fair may never show up, but you're better off not waiting for her anyways.

Posted by Dharmesh Shah on Mon, Apr 21, 2008

COMMENTS

1. Virality doesn't happen. It's built or in other words, architected into a product.
2. You can't not need the money and get multiple VCs at the sametime. I'd advice to prepare and be ready to assume the case that a company is most probably never going to raise funding. If it happens, great. But if effort goes into it, meeting one or hundred, its all the same abyss.
3.So what IS the strategy? I do agree that its not THE strategy. Whats the suggestion? (Plays devil's advocate)
4. A meeting with a corporate is worth a lot. You just need to be prudent to squeeze mileage out of every traction. If they are meeting and showing interest, keep them interested enough to open doors with their competitors and make one of the deals close. They are also probably one of the best sources to give first hand feedback on what would work and how to improve before hiting a "real" customer. It's all about how little you say, how well you say it, and how you carry yourself.
5. If you don't care for it, it will happen. If you do, nobody will want you. The difference between a princess and a prostitute :)
PS: Not exactly the way to make a post in venturewoods. You should atleast put the post there so that people can atleast read, instead of using it as an excuse to divert traffic. I'd expect you to know and behave better Dharmesh. :)

posted on Monday, April 21, 2008 at 3:41 PM by Vijay


1. Lots of products are not even ready for all the attention and scrutiny virality brings. So even the timing is impt. The worst possible way to suffer is to have your servers crash due to virality and never rise up again!
3. If somebody is joining a startup for the thrill of it, he has to be the wrong pick. Initial infatuations can die out so very quickly.
I think everybody would appreciate a post on characteristics to look for while hiring people for a startup.

posted on Tuesday, April 22, 2008 at 7:23 AM by Abhishek


Patience is a big one.... I do think you can create luck (opportunity), but it takes time. Compared to that, magic is just so darn easy!

posted on Tuesday, May 06, 2008 at 8:47 PM by Adam Greene


HI, CAN ANYONE OUT THERE HELP US GET FUNDING FOR START-UP. WE HAVE LETTER OF INTENT FOR 10,000,000 DOLLARS TO MFG. MEDICAL PRODUCTS. WE CANT SEEM TO GERT PEOPLE INTERESTED IN THIS FIELD. HELP , PLEASE THANK YOU JAYME

posted on Wednesday, May 07, 2008 at 7:29 PM by JAYME D. ROSENBACH



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