Ah, the San Francisco Bay Area – land of the startup. I just moved here and it’s already become very clear to me that this is where people come to start businesses. Billboards promoting the newest technology line the freeways; meet-ups for entrepreneurs to pitch their ideas to investors are held every night of the week; coffee shop conversations center on development timelines and test markets.
The intense focus on tech, money and rites of startup passage here makes me wonder if the foundational elements of startups get their fair share of attention. Perhaps it would be wise to revisit some basic startup principles and reaffirm why startups succeed.
Start with purpose. Startups should be born to fill a real need – to make a dent in the universe.
Years ago, Jim Collins and Jerry Porras’s book Built to Last conveyed the prevailing aspiration in the business world to build a company for long-term success. Then the late ‘90s and ‘00s ushered in an era of unprecedented abundance of capital and an explosion of internet-related business ideas – and with them, the goal of a fast and lucrative exit. The integrity of your business concept mattered less, it seemed, than your ability to flip it.
Now the pendulum has swung back toward building sustainable businesses and the purpose that drives companies is becoming the primary platform for startups. Simon Sinek explained one reason for this in his book Start With Why: “People don’t buy WHAT you do, they buy WHY you do it.” Today, in a world where products really aren’t all that different from each other, a clear, distinctive, and purposeful mission and values can attract customers to your brand.
Plus, the impetus behind a new venture propels its leaders through the challenges and helps them navigate the choices they face.
Start with passion. Startups require some hutzpah – you have to believe you’re on a mission.
The startup failure rate, which some estimate is in the 90% range, reveals the importance of substance and authenticity when starting up. Believing in the startup isn’t as critical to its sustenance as is believing in the cause.
Jodi Goldstein, managing director of the Harvard Innovation Labs, recently said, “Authentic entrepreneurs are often what I call accidental entrepreneurs. It’s not their aspiration to be on the cover of a magazine. They see a problem in the world and they want to solve it, and entrepreneurship is just a way to get there. The ones who show up and say, ‘I want to be an entrepreneur. What do I do first? Give me the todo list,’ that’s not authentic entrepreneurship.”
Passion produces the commitment and focus to go beyond the start.
Start with people. A startup is a human enterprise, made up of people doing something for people.
No feat of technology will ever make a business without people. Assembling a team to make a breakthrough product isn’t just about acquiring skills and knowledge; it requires the ability to inspire people to do their best work. Selling that product to customers isn’t just about beating out the competition and converting awareness to purchase; it requires creating real value for people.
Om Malik, technology writer and a partner at the VC firm True Ventures, recently created a stir in Silicon Valley with these words about the empathy vacuum in the region: “It’s hard to think about the human consequences of technology as a founder of a startup racing to prove itself or as a chief executive who is worried about achieving the incessant growth that keeps investors happy.” Although he was writing about technology displacing workers, his call for empathy must inform how startups view their employees and their customers. Our common humanity cannot be forgotten.
I’m relatively new to the startup world, so these are observations I wanted to share before I get seduced by the start and blinded by the bubble. Right now, it seems the drive behind many startups is to make money, create something new and be successful. But these aren’t reasons to start a company. They’re the results – if you do it right.