I’m an avid reader of GigaOm and the excellent articles they publish on all things related to startups, being an entrepreneur, funding, investors and more. What’s more the team behind it know their stuff having been there and done it themselves countless times. So the advice is as real as it gets.
In their latest post Michael Fisher and Marty Abbot talk about the Myths of startups vs the realities and I can relate to all of them. The comments following the article are just as insightful and prove that each of us experience a different ride when we step on the rollercoaster.
Some people will hate it, throwup and get off the ride as soon as possible, others will love every minute – the exhilaration and the gut wrenching twists and turns. Either way you’re in for one helluva ride so you might as well make the most out of your unique experience and go for the thrills! Here’s the article almost verbatim:
Myth #1: Hire Smart People and Let Them Do Their Magic
Truth: Hire Stars and Let Them Do Their Magic
Intelligence is important, but only insofar as it helps with performance and execution. As Malcolm Gladwell points out in “Outliers,” while some minimum level of intelligence might be necessary for superior performance, in many jobs it’s not in and of itself enough to ensure it. You need people willing and able to work as part of a team, and sometimes superior individual contributors can negatively affect team performance by creating affective or role-based conflict (for more on those, see Myth #3 below). As Reed Hastings puts it, you should eliminate all brilliant jerks from your team.
The fact that intelligence alone is not sufficient is especially true for leaders. Emotional and social intelligence, sometimes referred to collectively as EQ, are much more highly correlated to successful leadership and change than IQ. Consider reading Richard Boyatzis’ books “Primal Leadership” and “Resonant Leadership” to understand how critically important being “mindful” or socially and emotionally intelligent are. Interestingly, Thomas Stanley, a PhD who studies rich people, has identified the most highly correlated characteristic to wealth as integrity.
Myth #2: It’s About Your Great Idea
Truth: It’s About Your Customer
Many aspiring entrepreneurs are waiting to come up with the killer idea that will rocket them into fame and fortune. The reality is that ideas are a dime a dozen and even the best ones must be launched at the right time. Too early and there is no demand for your product, too late and you’ve missed the market. It’s much easier to fulfill an existing need with your product than it is to convince people they need it in the first place.
In other words, it’s about your customer. Start by A/B testing your products to get real user feedback on different features and designs. Adaptive experimentation, defined by the American Marketing Association as “continuous experimentation to establish empirically the market response functions,” has been shown (PDF) to be critical when it comes to successfully creating viral growth.
Myth #3: Conflict Is Bad
Truth: Affective Conflict Is Bad; Cognitive Conflict Is Good
Research shows us that some conflict is good and some conflict is bad. Cognitive, or good conflict, helps companies eliminate groupthink and open up strategic possibilities. That’s because cognitive conflict is characterized by healthy debates about “what” to do and “why” to do it; it thus generates multiple strategic choices and allows us to weigh options. It also helps us think more clearly and broadly about our competition. And from a biological standpoint, it stimulates the parasympathetic nervous system, creating a positive emotional state which in turn supercharges our brains. Indeed, cognitive conflict has been shown to increase firm performance and shareholder wealth.
Bad conflict is sometimes termed “affective conflict” and is usually role-based, as it consists of heated arguments about “how” to do something or “who” should be in control of doing it. Unlike good conflict, it’s been found to destroy morale and decrease firm performance. Not only does it stimulate your sympathetic nervous system, kicking off the “fight or flight” syndrome, the chemicals released by your body in the process limit your thought processes, so focus is put on the conflict rather than the opportunity.
Myth #4: It’s About Hard Work; Don’t Expect to Have a Life
Truth: It’s About Results and You Need a Life
Some companies have an unfortunate culture that mandates relentlessly hard work. When things get tough, people work harder. When things are good, people work harder still to try to keep the “good times rolling.” But this cycle of doom will ultimately fail as people burn out, get sick or simply quit.
As Reed Hastings outlines, and as we discussed in Myth #1 above, what’s more important is employee effectiveness. Certainly you want people who are intelligent enough to get the job done and who will work hard enough to accomplish the mission. But effectiveness, not hard work or intelligence, ultimately drives firm performance and shareholder value. This ability to start a company and have a life isn’t just for lifestyle businesses.
Myth #5: It’s an Uphill Battle Until One Day, When It All Comes Together
Truth: It’s a Rollercoaster Ride
Many aspiring entrepreneurs have been led to believe that the trajectory of a startup involves working really hard until they land one big customer or release one perfect product and after that, it’s easy street. The reality is that it’s a rollercoaster ride, with ups and downs that rarely let up. On Monday your company is sure to be worth $1 billion but by Wednesday you think you’ll run out of cash next quarter even though by Friday you’re positive your company’s next product idea will do nothing short of revolutionizing the industry. As Paul Graham notes, “In a startup, things seem great one moment and hopeless the next. And by next, I mean a couple hours later.”
Myth #6: No-one else knows what you’re going through
Truth: We’re all in this together
This one was put in there by me! I love networking and believe it’s so important for entrepreneurs to get together regularly and recognise we’re all going through the same thing in one way or another. So if you’re in Vancouver get along to VEF Momentum’s first event of 2010 - exactly one week before the 2010 Winter Olympics arrive on Friday, February 5th.
VEF Momentum: Higher, Faster, Stronger will feature Mark Williams, Co-Founder of Elastic Path Software, a local success story that has created an e-commerce platform used by everyone from Sony Ericsson to the Vancouver Olympic Committee. Get tickets here!
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