This essay is written the week of SpaceX’s successful launch of its Falcon Heavy. Give Elon Musk credit for working only on the grand challenges at this stage in his career. His flagship companies SpaceX and Tesla lost a combined $1.5B or so in the latest quarter, but what’s a few bucks in the California tech world when you’ve launched an industry-changing automobile into the asteroid belt? If by some ill fate these companies eventually do not prevail, they’ll be an example of thinking big and failing big. That’s far better on your resume than thinking small and failing small. You’ve shown the ability to assemble companies at great scale with thousands of motivated employees, and you’ll get more chances to do that. Failing at a free-beer app doesn’t add to your credentials and enhance your chances of staying in the startup game.
Obviously there aren’t enough literal “shoot the moon” opportunities for all the hundreds of thousands of people working on startup ideas in the multitude of incubators, accelerators, co-working spaces, garages, dorm rooms, Starbucks, and other such locations. Few of us have the advantage of a huge win under our belt to underwrite personally the germination of the next really big thing. But, we can make choices to rise above the trivial. Here are some criteria by which I would suggest measuring what you decide to work on next:
Team: Do you have the core team in mind, including the technical founder? As I have written many times, startups are not a solo undertaking. Is your team agreed on a concept and prepared to solve a challenge that will be perceived as filling a significant need? Is it much more complicated than an app that can be written in a weekend? Will it be hard for the team in the next cube to copy? Is it a systemic approach to solving a problem and not just a single point in a process? Does the full team buy in to the idea and share enthusiasm and responsibility for its success?
Domain: Who on your team understands the domain, and I mean really understands it from the inside as a practitioner and is a known quantity among his or her peers? A good startup team can be quite versatile with respect to technologies and general business building, but you seldom get very far if you are trying to change a market as a complete outsider. Entrenched buying behavior has proven to be an insurmountable obstacle for many an eager entrepreneur. You’re far better off if you already have your nose in the tent through quality experience in your field of choice. And, you’re far more likely to attend to the innovations that really matter. That’s not to say that customer validation is any less important; sometimes practicing insiders are themselves blinded by habits years or decades in the making and will misjudge tendencies in their own areas of expertise. But, on balance, they’re going to give you a much faster start than someone new to the scene.
Following: You can’t reach farther and higher than your following will support you. If you’ve had a big exit and earned your battle ribbons by achievement in your industry and your community, you will have a posse behind you for your next venture. You can choose a glorious opportunity if you know you have financial and relationship resources that can rise to that level. On the other hand, if you are not yet seasoned in the eyes of enough influencers and backers and you can’t name 50 potential investors who will immediately respond to a contact from you, you will have to dial back your ambitions commensurately. I’ve seen founders with limited followings fall into the trap of pin balling from one long-shot funding source to the next, or one customer channel to the next, and never be able to close the deal. Followings are not transferable. Someone on your team has to be active and engaged to the extent that he or she can be responsible for delivering results. That could be a very active board member in an active chairman role, but preferably it’s a key rainmaking senior officer. Money chases those who can be held accountable as the engineers of the train. It doesn’t chase mentors, advisors and lightly engaged board members.
Scaling: Most companies require humans to scale significantly. You have to compete to win the hearts, minds and talents of the colleagues with whom you can build a great venture. It is no accident that the same universities are appearing regularly in the college football playoffs – there’s a direct correlation with the rankings of their recruiting classes. Highly prized recruiting classes are magnets for next year’s batch of the best players. The kids want to be on a winning team that, even if they face stiff competition for their position, is likely to advance them to the next level in their sports careers. If you were a young engineer, wouldn’t you like to have been one of the 6000 employees of SpaceX on the day they launched the Heavy? If you were watching their YouTube livestream, you heard the boisterous cheering in the background. I would imagine that getting hired there got even tougher after that exposure. I also imagine having that on a resume will be an eye-catcher for the rest of a career. Delivering a big win for your company is something everyone celebrates. I’ve been there. Although accounting software is not quite as exotic as rocket launches, we accomplished some feats that were important not just for us but for the evolution of the personal software industry. We made our families proud. We conquered what were some mighty challenges of that era.
Potential: Let’s be realistic. You decide that your grand challenge is curing cancer. How can you achieve that goal when cancer has so many variations and when there are 250,000 clinical trials and targeted therapies available? I’ve heard doctors say they can kill cancer cells, but they can’t figure out how to do so without killing patients. Dreaming the impossible and building a successful business toward that end are not necessarily compatible concepts. Your aim must be tempered by what the market will allow and what technology is feasible. How many customers can you serve? Who’s paying for your products? What is your fence against competition? How will you acquire customers at scale? Can you hire the necessary talent at scale? Can you translate your ambition into a realistic financial plan? Aiming high is admirable, but it must be accompanied by an aim that is feasible.
You: Are you the right person to execute the big idea you have in mind? Some introspection is appropriate before you launch headlong into a mighty quest. I, for one, could never build a rocket company. I have personally spent time with two of the twelve men who have walked on the moon, but that’s about all I can bring to the table. I am not of the right age for such a long-term undertaking, nor do I have a suitable following, or a relevant team, or enough cash to bluff my way into the serious investment rounds of the requisite magnitude. People would be laughing at me, not with me. I get that. I have no diminution of brain power over the decades beyond what is age appropriate, nor have I lost confidence in my abilities. But, I have failed a few times and have learned my limits. If were still in my teens, I would enter GA Tech as a bioengineering major and have a shot at cancer, or Alzheimer’s, or some other critical disease state. I might be able to accomplish a moon shot with that kind of start. But, do-overs are limited to casual golf and do not apply to the arc of a career. I understand my current boundaries, and I will attempt still to work on big ideas that are within my personal grasp. But, I won’t become obsessed with goals best left to succeeding generations.
You may get free beer at your local incubator. But, please don’t let that be the limit of your dreams.