Over the past year and a half, I took a series of notes on my practice. I gathered those in various documents, shuffled them around, and merged in older thoughts and reflections. Lockdown #6 was an opportunity to bring all this to shape. I am now sharing those thoughts as a series, forming a sort of mosaic on my work, and what has been driving it.
Start-ups typically fail. That’s entrepreneurship 101. Yet founders are typically deluded about the chances of their start-up failing. Worse, success may well depend in part on their delusion, their capacity to convince others, and to keep going against the odds.
When a founder presents their project, particularly when they want something from you, they will probably tread a fine line between honesty, and distortion of reality. Never believe that ‘90% done’ means what it sounds like – it’s often a polite expression for ‘we’ve kind of spoken about it once’.
I’m trusting by nature, and by choice. Working around innovation circles, I often hung out with founders – and learned some wisdom through naivety. From first and second-hand experience, I identified four areas where early stage start-ups are likely to fail, and founders to present a distorted image. I’m sharing those few notes here, in hope that they will be useful for others intending to join an emerging project.
Funding. Building a new venture requires competent people devoting long periods of concentrated time to a project. Those people will probably want some income to pay their bills – not to mention, pay for co-working space, materials, or other business expenses. Start-ups are typically money-poor, yet founders usually confident that the money will come. So, make sure you check how dependent progress is on funding, how much is in the bank right now, and how advanced discussions are with potential backers.
Technology. Founders often have a distorted relationship to time. Present and future are not clearly distinct. Ideas are presented as complete plans; blueprints as tested prototypes. This confidence extends beyond the realm of the venture. Experimental prototypes from other companies are often identified and presented as available technology. So, whenever someone tells you they’re building a complex AI system, or whatever new piece of hardware or software – check the details of where exactly they’re at, especially if you’re not a tech person. Is there a prototype? Has it been tested? In what setting exactly? And what are the results?
Team. Start-ups attract exceptional talent, high achievers and award winners. You see those names and titles on pitch decks and investment documents. If they believe in the project, then surely, so should I? Except those names on file are likely not full-time workers, or even working at all. ‘Advisory board member’ might mean ‘pops a message once every six months‘. And all credentials are, most likely, inflated – or at least presented from the best angle. So, use the same wisdom you would on a dating app. Are those people actually in? Do they have other commitments? How accurate are their profiles?
Culture. Start-up life promises a certain form of freedom and excitement. There is often much talk about culture, working to your strengths, and supporting a great team to do their best. This, however, is likely to clash with the founders’ narcissism, quirks, or simple human limitations. So, check in very carefully before committing. How exactly will you be valued? Will you be listened to? Will your needs actually be met? Importantly – try raising the question of power. When push comes to shove, who makes final decisions, and if there is conflict, how will it be solved?
If the founder refuses to give you details on any of those matters – take it as a warning. Yet, remember – they’re more invested than you are, and their delusion is a condition of success, so don’t be too harsh. Risky as it may be – betting on founders may still be the best option we have. Hey – did I mention I’ve been a founder myself?