Face the hard facts.
The time comes when your favorite ideas must die, to make space for fresh ones.
So imagine: top startup experts judge your every move. All eyes on you as you present your best work. Your startup, MBA, reputation and sunk costs all depend on getting it right.
When I took notes at a Lean LaunchPad session at the University of California, Berkeley, the setting struck me. Eight teams of entrepreneurs, all MBA students in the program, go out and talk to customers, potential partners and anybody else relevant to their fledgling business model. They present their findings on what seems like a performance stage. Accomplished entrepreneurs and thought leaders such as Steve Blank act as mentors in a raised back row.
They attack the teams one by one. Under fire, these brave entrepreneurs painfully learned three hard lessons:
1. You don’t know most of what you need to know.
Up on stage came the first group of entrepreneurs. Barely into their presentation, one of the mentors stopped them: "Five to ten companies show the very same slides as you."
Ouch. When people notice you have zero unique insights, trouble follows. And look: it’s okay to talk to a bunch of people and learn nothing particularly valuable. It’s entrepreneurship: some of your long shots will work; most will not.
The problem is when you pretend to know -- consciously or otherwise -- what your customers want or how your business model could work.
Instead, start from a place of objectivity. Meaning: any assumptions about your customer and business model can be false, no matter how obvious they seem now. Start from zero.
Then put yourself to a path to learn what’s actually true. And yes, that means talk to potential customers.
But on top of this, you must do the research. Start with the top five books in your industry. Find a way to connect with thought leaders. Study anything they mention. Seek out people who hold a contrarian view on a key problem your customers experience and ask them to explain their reasoning. Follow up with anyone they mention.
Because as Blank told the group:
"You need to know, at minimum, what someone else already knows."
Next lesson? Don't submit yourself to another person's tunnel vision -- say, your investor's.
2. Your investors can cripple your business.
Blank shared a piece of advice that should scare any visionary entrepreneur:
"As soon as you take investor capital, their business model becomes your business model."
Yes -- the wrong investor can sink your company.
Why? Because investors influence you. And as you expose yourself to their advice, connections and mindset, you become more like them. Their business model becomes your business model.
Sramana Mitra, founder of virtual accelerator One Million by One Million, advises you to bootstrap with your paycheck until your idea stands validated. Thus, you stay in charge. And when you do raise capital, the investors rise with you.
Focus your attention closer to home instead. Say, your domain expertise.
3. Your background can work against you.
You can possess priceless expertise and somehow still grind it out in a totally different industry.
In the middle of his talk, the mentors questioned an entrepreneur about his background. Turns out, he and his team previously worked for the Central Intelligence Agency and military intelligence.
The mentors glanced at each other with surprise. Why? Because this team worked on an app for social media. They had deep knowledge in a difficult field and yet chose an unrelated industry. Back to the drawing board.
A cautionary tale for you. Stop and reflect: do you have a background you effectively run away from? Can you find a way to change your business so you can make use of your past hard work?
The MBA students walked away from this session with a bruised spirit. But guess what? They needed a dose of stark realism -- and so do you. Exposure to unrestrained expert criticism taught these MBA entrepreneurs more in a few hours than many founders learn in six months.
When you actively seek out merciless criticism, it works in your favor. Your ideas get weighed up against the reality of the data you collected from the market — all before you spend most of your energy building stuff.
Brutal, painful and frightening...but highly effective.