Why are startups hard?

David Goehring

Is it because we’re trained and educated in to a different way of thinking or are they inherently hard?

This post from Derek Sivers C Dixon got me thinking. From the first day of school we are trained to think in a certain way. Essentially, we’re all managers or at least that’s what we’re expected to become.

Be a part of the machinery. Optimise it, tweak it, but don’t disrupt it! That’s what school teaches you.

But we know that entrepreneurship is different. Steve Blank, Eric Ries and the rest of the lean startup movement have taught us that a startup is a completely different beast than a company with an established business model and product.

Instead of optimising you should be experimenting.

Instead of tweaking you should be pivoting when the experiments fail.

And disruption is on top of the agenda.

With the lean startup process we now have the manual (sort of) for doing it. But it’s still so darn hard. The manager within us keeps holding us back.

So, I wonder: are startups hard because we have to fight the instinctive urges that one and a half decade of management thinking training (aka “school”) has programmed us with or are they hard because, well, it’s simply hard? What do you think?

Summer is coming

Even though the winter winds of February has a tight grip on the Nordics, summer is getting closer and closer. My goal is to be ready for launch with my side project before the summer. It’s frustrating not being able to work full time on it, but I don’t want to repeat the mistakes I’ve done in the past and not have enough of a buffer before starting.

I started with the #blogg100 (one blog post a day) two weeks ago and for some strange reason I actually started another project at the same time: a change of diet (low carb, high fat). These two will both run until summer, I hope.

So that’s my goals for the spring:

  • Launch my side project
  • Blog once a day
  • Lose weight by following a new diet

So far I’ve lost about 3 kg and I’m on my 15th blog post. I’m writing code for my side project almost daily so moving forward there as well. Let’s revisit this in a few weeks and see where I stand.

LinkedIn top profile

“You have one of the top 1% most viewed LinkedIn profiles for 2012. You are a unique and beautiful snowflake.”

OK, I added that last part myself. But LinkedIn sure do know how to stroke your ego. I’m sure a lot of you received a similar mail today.

Problem is, I’m just thinking how this means 99% of LinkedIn users are even more passive than me. Oh, well.

Is the inner city showroom a sustainable business?

Photo by: Håkan Dahlström

Online shopping is growing at a rapid pace here in Sweden. At the same time we’re seeing strong competiton amongst shopping malls, all fighting for the same customers. Where I live, in Malmö in southern Sweden, more than 300 new stores have opened in about a year, with the mighty Emporia as the main growth factor.

Problem is of course that the customers are moving over to the internet. With 15-20% yearly growth of online shopping, you don’t have to gaze too far in to the future to see a major chunk of the consumer money going from the stores in the malls to the web.

So what happens to the store as we know it?

One idea I’ve been toying around with for some time is the inner city showroom. A place where you can test, touch and try things but not actually buy them. More like an exhibition than a shop. Of course there would be internet terminals in the room where you could buy, from associated online shops, but you wouldn’t be able to buy stuff over the counter.

How does this place make money? It could charge money from the online stores, either as a sort of rent for their products to be shown or as an affiliate when people buy things. It could even charge the visitors. After all, people pay to visit exhibitions.

Don’t know if it would work but I think it’s high times for anyone working with physical stores to consider their future in a world where most of the consumers money is spent online.

What do you think? Is it a feasible idea? Perhaps it’s already been tried somewhere?

So many questions

Photo by: USFS Region 5

It’s never a straight path. Get used to it.

While working in an established business certainly can be a challenge sometimes, I don’t think it compares to the constant uncertainty of a startup.

There are just so many open ended questions that keep popping up. Let’s just try and list a few from an early stage startup project.

What idea should I focus on? Can or should I do more than one startup project at once? What co-founders do I need? Should I look for outside investments? Should I take a bank loan? Should I quit my job? Should I try and do a high risk/high reward startup or a lower risk/lower reward lifestyle business (the difference can be nothing more than the amount of marketing dollar you have)? What markets should I target? Do I need a mobile app if I have a web site? Do I need a web site if I have a mobile app? How should I price my product? How should I receive payments? What cloud platform (if any) should I use? What technical platform is best suited for my product? Should I hire someone? What should I name my startup? Do I really need a .com domain?

Phew. I can go on like this for a long time. And this is just from the very beginning of the startup. No wonder so many people gets stuck and never take the plunge to get started.

What phase is your company in?

The post about speed paradigm got me thinking about how a company changes over time.
Entrepreneurship research speeks of three main character types needed in different phases of a company’s life:

  • The entrepreneur.
  • The manager
  • The leader

Going through the different stages:

  • In the startup phase, the company is looking for scalable business model. This is where the entrepreneurs feel right at home.
  • Once the business model is established your focus must be: growth. You need to build a team and an organisation. In this phase the entrepreneur should phase herself out in favor of a leader. It’s actually a difficult phase because you need all three types at once, and often at a rapid pace as well. Few entrepreneurs can take this step by themselves.
  • The next phase is calmer in a way. It’s about optimising. This is where the managers come in. This phase can last for quite a while, in some companies for decades. Meanwhile the entrepreneurial spirit of the company gets weaker and weaker and the ability to handle change is diminishing. All leading to…
  • Decline and crisis. Once again it’s time for the leaders to step in. Tough decisions must be taken. Pet projects must die. Focus and profitabitity is of the essence. But the time of crisis is also a good time for new ideas.
  • If you’re lucky you’re able to restart the business and once again build something new. The entrepreneurs will do the building and the circle continues.

Looking at this: what stage is your company in? Do you have the right people at the top?

Everyblock shutting down

A little surprised to see Everyblock close the door. Everyblock was a site in the superlocal category, focused on neighborhood news. I am myself working on a side project in the same area so I’m following this with interest. Hopefully they’ll write a full post mortem.

Competitor Nextdoor is probably celebrating today but the question still remains: is superlocal news a viable business model?

About.me and Dell going solo

…well, sort of. About.me buys itself back from AOL and Dell buys itself out of the stock market. It seems being your own boss is tempting even for a large PC maker as Dell.

A trend? Not sure. But it could be that you lose agility and speed if you’re tied to a big owner or the tight rules of the stock market. Research has shown that companies get less innovative post IPO.

Disruptive innovation requires the freedom to make radical decisions. Don’t let your owner structure hold you back.

A blog post a day

Trying to keep up with posting one post a day to get the blog going and as part of the #blogg100 initiative by Fredrik Wass.

Think I’ve already missed a few days one day but it’s really good to get some tempo in the posting. Will do my best to skip as few days as possible out of the 100.

What is your speed paradigm?

Snail
How slow are you?

I read an article in a Swedish news paper about how the speed in which you reply to an email or SMS message is a status indicator. Slow replies means you’re more important and of a higher status. Since we once started a company focused on reach management (basically a muting service) the article caught my attention.

But as my good friend (and co-founder of the company) Nicolai pointed out, this is only true if you’re not living in a paradigm in which speed and information are of the absolute essence. If your goal is to preserve the status quo and change is rare, then yes, a slow reply means you’re keeping things as they are and protecting your status.

If, on the other hand, you’re on a trajectory of change and need to move fast, then a slow reply is counterproductive and prevents you from moving forward and acquire validated learning.

It all boils down to if the currency of status is time or information.

Perhaps this is a good measuring stick for if you’re working in an innovative, forward leaning organisation or in a stale and static one? Are your managers fast to respond?

What are your thoughts? Do you agree?