In total I witnessed 83 pitches at SXSW, and 82 of them mentioned blockchain. I guess that was a minimum criterion for a successful presentation at that event. There’s one such dominating trend like that every year at SXSW, and there’s always a replacement the next year. Relative to the bigger picture, I am often asked how one measures success in a startup, an incubator, or a startup ecosystem. I see frequent threads on that topic on Facebook and Twitter. I have reported before that one prominent professor believes incubators and accelerators will soon outnumber startups in the US. What then should we all be measuring? I submit here some benchmarks for your consideration.
My personal disposition on this topic is to measure for the long view. A great example is jobs versus careers. Startups can flourish, create a lot of jobs, and then wane. Jobs as a single measure of success are far less important than careers launched. I am now reporting to a young man to whom I gave his first job out of college, and he made a very fine career from that beginning point. I am finding that many of the movers and shakers in Atlanta’s technology world were once employed by one of my ventures. They’re in high-level positions with the big companies in town, or they’ve gone on to create startups on their own. Others have risen to prominence in fields such as education. The diaspora of talent from the best startups over time multiples many times over the value one might attribute to the original headcount. Some companies eventually create an industry in their home town; MSA would be a shining example of that with respect to software in Atlanta. Politicians will talk jobs all day long; their goals are based on relatively short-term election cycles. Company builders can take great satisfaction in the exponential benefits of launching careers.
A second metric is the impact of any given startup. Does its product or service have a long half-life and deliver a must-have benefit to a significant number of customers? To me a shining counter example of that is the YO app. I recall when it came out a few years ago, and I personally thought it was a handy novelty. If I wanted to ping you to call me, I’d just shoot you a “YO” to prompt you to respond to me. It’s still around, apparently funded by patrons (42 so far), but you’d be hard pressed to find a YO receiver for any message you wish to send. No offense intended to the YO proprietors, but that one probably didn’t move the needle with regards to world issues. It’s just as easy to spend your time building something of consequence as it is to create an evanescent plaything. You decide to do that by choosing a challenging problem to solve, one that can have far-ranging usefulness, and one that is likely to stand the test of time. Peachtree Software is ancient history, but there are still millions of businesses using it for their accounting. For its era – the dawn of micro-computing — it presented a grand challenge with a very high degree of difficulty.
A third measure is advancement of technology. You might have pursued a startup that didn’t work as planned but did create a technology achievement which became the foundation for many subsequent successes. Or you may have been successful on your own but have touched far more than your original imagination. Think of my U Texas colleague Bob Metcalfe, who invented Ethernet, and whose seminal work led to all the world’s Wi-Fi. He sometimes muses about getting a royalty on every byte passing across his framework, but he certainly did well enough. The work my 80’s company Comsell did in adding color images to personal computing is in the dustbin of history now, but we did advance the ball and bring that power to the travel industry. Imagery that we all take for granted was another example of high difficultly for its day. We did OK, but our role was in ways falling on the barbed wire to allow the next wave of soldiers to advance. All of us in the technology business help each other move forward in increments. The iPhone is not the result of a virgin birth. All of us have the power to contribute to the forward momentum if we decide to work on the grand challenges. YO?
Speed is my fourth important metric. Doing things fast and doing them well are not antithetical. Even the March 17 NY Times reports on research that suggests ADHD is not such a bad trait in this era of turbulence and change. (Of course if you have ADHD you probably haven’t read this far and are missing out.) With any worthy startup, you only have a limited amount of time to get the job done. There are competitors with the same idea. You only have so much financial runway. Your target market is not sitting still waiting on you to deliver; moods, attitudes, buying behaviors, and preferences are constantly evolving. You don’t have time to overthink every aspect of your model; sometimes you have to roll the dice on instinct and hope you are a bit lucky. If you drag out your startup over a long period of time, you become old news. Your employees become weary. Worse yet, your personal opportunity cost accelerates rapidly while returns to your investors decelerate at the same rate. Everything about the startup life rewards speed. Start them engines, ladies and gentlemen!
The collective experience of you and your team rounds out my list at number five. I’m not talking about the experience you brought to the venture; I’m referring to the experience you create together in your business. There are always ups and downs, funny happenings and sad ones, big wins and some painful losses, and plenty of disagreements while forging into the unknown. On balance, at the end of the run, or at some major inflection point like an exit, what feelings will all of you take away from your time together? It’s not the corporate culture, it’s the corporate sense of accomplishment. Did you all measure up against goals like I’ve suggested here or others you may have set for yourselves? Work is work, and it’s hard, but did you enjoy your personal contributions? Would you do it all over again with the same team? Will you tell the great stories of the venture to your grandchildren some day? Will your family and your community applaud you? Have you advanced your personal career and life goals? How many YO’s will come your way?
At the end of the day with any startup, there’s no championship trophy. There’s no cutting down the nets. There’s no end to a season that gets to be repeated next year. As a founder, your brainchild will live on in through its careers launched, its product impact, its technology advancements, its speed to market, and the highlights shared collectively by your team. Those are all great examples of measuring success.