Hand-sewn panties and ping-pong tables: How to fail your startup business
I’ll never forget the first time I got laid off.
I was working for a startup that once had intensive prowess. We’d been through a coveted accelerator; we’d raised an excellent amount of working capital; we had a kickass board of directors. Yet I found myself on a couch in mid November, watching the snowfall as I drank morning beers that I’d bought with a microscopic severance check, trying to piece together where we’d lost the music.
Over the past 10 months, we’d committed a cardinal sin of entrepreneurship: forgetting to build the business. Our passionate founder had built out the next ten years of products in his mind, constantly dreaming up new ways for us to expand our current offerings, while at the same time, the product we currently had on the market wasn’t selling, or even fully defined. We hadn’t raised a dime since February, yet worked out of a beautiful office in downtown Boulder. Perhaps the biggest mistake we’d made was hiring an arrogant and green 22 year old to design our product—an insult I don’t take lightly, as I was the very 22 year old in question.
It’s easy for founders and their initial teams to get lost in the early buzz of a new company. Once the idea has been validated by the right minds and a few products have moved off a shelf, a company can get so fixated on solving issues like defining culture or planning a product expansion 2 years down the road that they forget to keep track of the basics: What’s wrong with our current offering, and how can we fix it while still maintaining sales? How much money do we need to bring in to keep the lights on this month? Even this week?
What a young company or even a foundling idea needs is a plan of how to construct a functional business, not just how to put a product on the market. I’m not even talking about the robust business developed by MBA’s of decades past, but something dictating current offerings, how they’ll generate cash flow, and where responsibilities lie along the way. Before you buy the ping-pong table and keg that will create the sickest work culture ever, ask yourself: what the fuck are we actually selling, and to whom?
“They’re basically panties with words hand-sewn onto the crotch.”
I’m sitting across the table from a lovely woman on a first date, tacos strewn amongst empty margarita glasses as she describes to me her current business, my mouth slightly agape as I try to pretend I didn’t hear her.
Who in their right mind, I think, would ever buy something so unbelievably stupid?
This brings me to the second cardinal rule of startups: build something people want.
Although this seems like a comment easily digested and understood, it’s unbelievable the amount of businesses founded off an idea that will never become a household, or even a specialty product, simply because it’s hugely undesirable.
People will often tell you the most passionate founders build the best businesses. The problem with this is that people become passionately attached to awful ideas, like plant based yogurt alternatives that taste like the inside of a Tauntaun on Hoth or a competitor to Patagonia down jackets that costs more and carries an inkling of the prestige.
Your own mother will probably tell you that the ability to create something doesn’t justify its existence. Before even delving into customer discovery or product testing, the best thing you can do is sit down with a friend, a roommate, a lover, or even a mirror, and ask: is this pointless?
Entrepreneurship is a fantastic force. A thriving startup ecosystem can fundamentally change a city, creating jobs and growth. The ability to evolve good ideas into better companies is a fantastic display of what we’re capable of as humans. Yet it can also be a fantastic display of our incompetencies; of our poor planning, our rash decision making, the egos that keep us from admitting when we’ve steered off course.
I’ve had the pleasure of seeing the absolute brilliance a town like Boulder produces. More unicorn companies will be built here over the next decade than the vast majority of other cities around the country and even the world. Just anticipate having to sort through the pile to find something worth taking a closer look at.