Conclusion: A Tale of Two Founders
I’d like to share with you two separate mentoring conversations I’ve had recently.
Actually, these are anonymized composites of conversations. I don’t want to call anyone out in a way that would identify them. I’ve don’t my best, however, to make these composites an accurate reflection of the two styles of conversation I typically have with a founder.
As I go through these points with you, I’d like you to take what you’ve learned through this text and think about what it means to be fragile to something. See if you can identify whether you see fragile (prediction reliance) or antifragile (Darwinian) elements in the two stories I’m about to tell. And don’t necessarily try to predict which of these companies might end up being the most successful. Rather, just ask yourself what you would say about how these two founders are positioned.
Founder Conversation #1:
Mentee number one is creating a quasi-social media platform. That’s not how they introduced it to me, but that’s what that was.
This founder did not have previous experience in small businesses or entrepreneurship. The business would have multiple market segments that they need to attract (i.e., make happy): influencers, core users, and advertisers. The value proposition was conceived with advertisers in mind, but not necessarily the large user base it would take to attract those advertisers.
In order to be appealing to users and gain traction, their platform would depend on having an abundance of user-generated content (you may spot here a chicken-or-the-egg contradiction). There was no clear differentiator for the core segment, the end users.
The minimum viable product was complex, very slow to develop, and needed to be almost fully featured to be worthwhile. their CTO was working free, which means that they were working occasionally. There were no plans to show a non-functional mock-up to potential advertisers first, for feedback.
And this is my absolute favorite: Their promotion plan was “Something, Something, Instagram.”
Those are not the words they used, of course. That’s my term for a business that simply assumes its own virality. If you ask a founder about their marketing plan, and you get an answer that is some variant of, “I will promote it on Instagram,” it’s a safe bet that they have not thought matters through.
Worse, if they answer with, “I know an influencer,” run.
Founder Conversation #2:
By contrast, this conversation took place with a founder who had past experience with freelancing and small business operations and knew the ins and outs of it. This new entrepreneurial endeavor would be self-funded from her other ventures.
For some time, she had been helping people navigate certain facets of the U.S. healthcare system pro bono. So, she already had a refined business process that helped people, and therefore had validated both the market need as well as her differentiator. Her venture was to be merely a productization of this existing process.
She had paid her developer rather than asking a friend to accept a nominal title and develop her platform for free. This meant that she could hold the developer accountable to deadlines and, when the initial work was substandard, could exercise the option of switching developers.
She had the access to a pilot segment and influencers from her other work as a freelancer, giving her an unusually intimate knowledge of her audience because she happened to know so many of them personally.
My favorite part of this conversation: She had gotten a physical meeting of about six influencers in the space (whom she likewise knew personally). She was going to share the business idea with them to see if they would join a beta group, and potentially help her promote. When she pitched them the business, their first reaction was to offer her investment capital right then and there.
And she turned them down.
Why did you turn them down? Because you don’t want to take an investment that you don’t need. But man, talk about validating your proposition with your core audience!
Her promotion plan was very, very specific. She, again, she knew enough influencers in the space to get some initial traction, but she was realistic about the limits of this. She had a smart advertising plan that would target the continuing education programs that all of her target market segment had go through as part of their professional development.
What The Tale of Two Founders Teaches Us About Our Businesses
I don’t know, and neither do you, which of these startups is going to fail and which is going to succeed.
We occupy a domain where these things are impossible to predict, but you can tease out from these descriptions — can’t you? —who is better positioned, who is fragile to what, who may have little nascent forms of antifragility starting, and who generally is in a more agile place; a place where they have more options.
So, as I leave you, I ask you to think about the things to which you and your startup might be especially fragile. Then I want you to think about what things in your company—product, marketing, training, partnerships, etc.—should be subject to the kind of evolutionary processes that will make them stronger through experience.
How can you turn this kind of testing, discarding and retesting into a central focus of your business, so that you never reach a steady, stagnant state but are always growing straight into the teeth of your headwinds?
Good luck, and may your setbacks fuel you forward.