There are tons of startup myths out there. To some extent, startups have a mystique that you don’t really understand until you work inside one. And though, as an industry, tech is so forward-thinking and social, unfortunately its echo chamber often drowns out what’s really important. Many key startup learnings simply aren’t shared. This is a short list of false beliefs that I encounter regularly:
- That you are likely to make a lot of money joining an early (seed or A) startup. Do it for the satisfaction of doing new things and to align to your passions and strengths. What do you love? In technology you will build things—that can be deeply satisfying. But going in to get rich is a bad approach. More on startup equity here. Andrew Chen even mentioned on Quibb he ranks equity last, behind salary. “Ultimately the options are so unlikely to pay out that I think the #1 consideration should be the experience and learnings, and #2 the cash comp, and equity comp should be a distant 3rd in the equation.”
- It’s a complete myth that early startups need to work with digital agencies in order to create major deals with big brands. Startups can go direct to brand managers across verticals like TV, entertainment, music, sports and retail; agencies are usually a total waste of time. I wrote this on how to approach product / marketing strategy if you want to do deals that drive awareness & exposure to new markets. That post has since garnered thousands of views, and I’ve been contacted by a dozen startups to discuss (and by agencies as well). I can’t tell you how happy this has made me. It was the sole reason I decided to write this broader ‘myths’ post. On the agency topic, note that a small handful of specialty agencies can help you be creative or scale, especially ones that have hybrid tech / product / building skills, e.g. R/GA.
- That bad investors or “dumb money” will give your startup an artificial ceiling. As long as investors don’t get in the way your success will be left largely to you and your team / product. At the end of the day, capital for hiring and growth is going to be the biggest enabler on whether you succeed, not the origins of that capital. Do you want the best investors? Yes. It is an imperative on your success? No. “Best” is also relative depending on sector / partner. Good investors help more than dumb investors hurt (as long they don’t impede you or lack integrity).
- The “stealth mode” myth (this is very nearly dispelled) which suggests you should keep your idea / product secret until you launch. The whole notion of being super proprietary with information hurts you more than others. Why? There are a lot of smart people who know more than you about different things. Not only is it a loss for you not to share and learn from these people, but also they’ll never open up to you in future if you don’t create a relationship and show your human side and vulnerabilities before you have “figured it out”. This will actually hurt your career. However, Bilaji Srinivasan made some interesting comments in one of his Stanford lectures that I agree with regarding being stealth. One audience you may want to screen your startup from is Hacker News—they are so agile and hacker minded that someone could take your idea and run (if it’s good):
“The vast majority of people are busy with their own things, or aren’t uncreative sorts who are both extremely good at execution and just waiting around to steal your idea. The one exception is Hacker News…. If you have a pure internet startup idea, you should think carefully about whether you want to promote it there before you’ve advanced it to at least a prototype stage.”
- That startup / tech people don’t evaluate you based on your brands. They do. Tech is much more of a meritocracy than other industries, and adding value is the most important thing (not where you went to school or work). However, people in tech like to pretend they are not looking at the brands on your paper resume. Give me a break. I once saw a prominent tech person tweet about how brands didn’t mean anything and then I went to the company website and they’d only hired engineers from Ivy League schools. Made me throw up. Note I am not saying you should go look for shiny objects, but at least be aware of this dual standard as you make career choices, because you will be judged on paper.
- That investors care in isolation about your traction. Momentum is actually more important than absolute traction when you are in fundraising mode at the early stages. Interestingly, this is often also the case when doing deals with partners (point #2 above). People love to make a bet on you when you’re making rapid progress.
- That the best product wins. They don’t always. There are plenty of examples of worse products coming out on top, and consumer markets are often binary. A lot of winning comes down to serendipity, and whether you market your product well. Yes, obsessively focus on your product, but not at the cost of falling down in distribution and marketing, and managing the team. One interesting side effect of the product / marketing gap is that there are a lot of insanely talented teams out there building beautiful things. This has led directly to the rapid rise of acquihires in tech, which will continue.
- That your consumer startup needs to be covered on a tech blog or have press in order to break out. Yes, this has been written about ad nauseam, and I think the myth has been dispelled. But it’s more nuanced. You need to leverage the tech crowd and press as a way to raise awareness within tech in order to hire and accomplish other goals. Good press is more likely to help you get capitalized and hire and create a halo that creates critical mindshare for your startup and paints a picture that you are breaking out. Create great relationships with journalists and use press surgically and wisely, while not expecting it to drive your user funnel.