Over the last few days, I’ve started to think about writing a book for entrepreneurs – a proper, meaty, practical book that helps you see through the fog of the business world around you (and believe me, there’s a whole lot of fog out there). It’s early days just yet, so we’ll all have to see how (or indeed if) this book takes shape. (As with all such projects, the only sure thing is that holding your breath waiting for it would be A Very Bad Idea Indeed.)
All the same, big books need to address big questions: and hence the big question I’ve been banging my head against is… why is it that nearly all startups fail? Or rather, what’s the big problem with starting up? It struck me that if I were to assemble, arrange & present all my thoughts in such a way as to answer that near-universal question in a pragmatic & accessible way, I’d have a book that would literally be worth its weight in gold (at today’s gold price, errrm, round about £15K for the weight of a 250 page softback).
Now, even though the following is only a part of a much larger picture, I think it’s fair to say that one of the biggest curses that plague entrepreneurs is overprediction – that is, not only predicting how people (whom you haven’t met or fully researched) currently behave, but also predicting how ecstatically & differently (in your favour) they’ll respond when presented with your game-changing Android-powered CyberFruitBowl 3000. Oh, and predicting how potential funders will evaluate what you’re doing, too.
You think that’s a reasonable ask? Oh, come off it! The world is a complicated place, and people have wildly varied & complex reactions to even simple things (yes, even to your lovely CyberFruitBowl 3000). Yet at the same time, there is an enormous pressure on entrepreneurs to present what they do with utter certainty (and using TechCrunch-style hyperbole), not only when pitching to angels but also when talking to everybody else.
In just about every useful sense, this yields an abysmal disparity – the ever-widening gap between (a) the way the world really works and (b) the overwhelming social compulsion to misrepresent that in order to paint a picture of your company as a credible tech startup. Being brutally realistic, this disparity will either crush your moral spirit in the short term or come back to financially bite your hairy yellow arse in the medium term (startups don’t do long term, of course).
Regardless, this means that what entrepreneurs pretty much have to do is to overpredict how things will work out for their development & product/service rollout, to a degree that wouldn’t even be realistic for a company that was already a market leader. If Apple / Samsung / Vodafone / Virgin wouldn’t put it on a slide, why would you?
In a way, the one good thing about the kind of discourse espoused by Lean Startup evangelists is that it focuses on genuinely not knowing anything (which is true for most entrepreneurs), rather than pretending to know everything. Of course, reality always lies squarely between these two extrema: but what would a Streaky Startup – i.e. neither excessively Lean nor foolishly Fatty – business plan look like?