Not fair: he knows how to ride a horse!

by • January 10, 2012 • FoundersComments (13)921

Unfair advantages grow from irrational habits

Ask anyone how to start a local marketplace business and Zaarly will have successfully done the opposite. Bo did a great interview about how they approached it all.

Although there’s plenty to learn from the interview, I want to focus on a comment from an agitated viewer.

This comment represents a common mindset which, left unchecked, will completely ruin your startup career:

These are the types of interviews that really frustrate me. You know… The ones where the founder being interviewed had an arsenal of resources available that others will never have…

How can this story possibly be relatable to the average bootstrapping entrepreneur? I don’t know Ashton and Demi. I don’t know Lavar Burton…

When everything that made this idea successful was connections, give me a BREAK! That’s a worthless interview because it can’t be applied to anyone else… (full comment)

In the short-term, I agree. Bo’s story isn’t going to help you right now. He’s already accrued his unfair advantage and you haven’t yet.

But there’s a huge amount to learn about how to approach your days so that once you’re 10 years into your startup career, as he is, you have access to all the same incredible resources and can surmount extremely difficult business models (like Zaarly’s) by mobilising all your goodwill.

And how does Bo spend his precious time? Cutthroat strategising? Wheeling and dealing?

We actually made personalized video’s for pretty much every group of people who had ever done anything nice for us or that we had ever worked with.

We locked ourselves up for a weekend [making them,] saying, “Hey, we’d love it if you would try this thing out.”

Seems to me like he’s basically a kind, thoughtful guy.

If you approach every business relationship like that for 10 years, even though it doesn’t make sense for what you’re working on right now, you end up in a pretty strong place.

That’s why I was at Kauffman, actually. I fundamentally believed that we were making the world a better place by helping entrepreneurs get going… My job was to give away money with no personal upside, because it was a great thing to do for startups.

One of my cofounders Eric Custer… helped create Start Up Weekend and turned them from a for-profit into nonprofit… not because he got paid or anything but because he knew this was a very powerful thing for entrepreneurs.

Who wouldn’t want to help these guys?

They spent years in the habit of doing benevolent stuff that didn’t make rational business sense and now they have an unfair advantage.

Today’s habits create tomorrow’s resources, even if those habits are an irrational use of time in the short-term.

When Jason Cohen announced WPEngine, we saw the same objections:

Great idea! But not entirely fair: starting from scratch means you’re nobody, no one have ever heard of you. You’re making it the easy way… (full comment)

…and approximately 18,000 prospects. How convenient ;) I wish I had that kind of mailing list starting out. (full comment)

Later in the thread, Jason responded:

Absolutely true, it’s a completely unfair advantage, and it’s why so many people harp on folks to start things like blogs and mailing lists on topics they are interested in, so that when you want to do things like sell a book or a new startup you have a running start! (full comment)

There’s no happy takeaway from all this if you still believe you only have one shot. If you approach entrepreneurship as a single company instead of as a career, then sometimes you’re already doomed.

In that less-than-ideal case, you’re best off staying away from the big ideas and choosing something your current resources do make practical.

The same problem comes up within a company when you’re down to your final months of runway — you no longer gain any benefits from thinking long-term so you start making incredibly petty short-term optimisations. Learning processes like analytics & customer discovery don’t have time to pay dividends when you’re in your final months. In that case, you have no choice but to go all-in on the current version by trying to hard-sell customers (or investors) on a product that might not be quite there yet.

It’s not easy (or fun) to try and force your final product to succeed. And it’s not easy (or fun) to try to force your final company succeed either. The most interesting learning and advantages are accrued over time. They work on too long of a time scale for one-shot thinking to get you there.

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13 Responses to Unfair advantages grow from irrational habits

  1. Andrea says:

    Honestly, no. Not here in Italy, at least. “once you’re 10 years into your startup career, as he is, you have access to all the same incredible resources” – what is going to give you those “incredible resources” you’re talking about? Time?
    I’ve seen too much to believe that you can be a successful startupper without some kind of external help. And that external help, at least here, it’s not something you can gain – it’s something you’re born with. It’s your family, it’s the friends of your family, it’s the connections your family has, it’s the connection you were able to build because you went to an expensive school, paid by your rich family.
    Again, I’m not saying that in the US things work the same way. In Italy they certainly do – Startup Chile is/was kind of a failure for the same exact reasons. The commenter has its rights to complain about those guys who had a huge headstart if they act like they didn’t.

    • Dan says:

      That’s a lot of reasons not to make it, some I used to believe myself! But it’s all BS you can do anything, you don’t get born in a position to make a startup successful. What school you go to doesn’t affect anything. Get hustling, deliver a valuable product and focus solely on your target market.

      Yes most people do need external help. It’s hard to do anything in business with just one or two people. Most things in life are much easier with people helping you. Building strong relationships is an important skill.

      One way you can get people to know your product is find the 20 most influential people in your market, then make sure those people know about your product.

      Startups are worldwide, if you don’t like dealing with Italians email or Skype some people in the USA. Make it a win win situation.

      Some people are lucky, some people make their own “luck”.

    • This is a losing attitude to have. There are basically two ways to look at the world, regardless of where you are or what culture you come from. Either you can observe how things work and try to accomplish something within those constraints, or you can construct a series of explanations about why your dreams are impossible. The human brain is miraculous and the story you tell yourself is utterly bulletproof and justifiable because you are bending all your intelligence to making it represent the truth as you know it.

      It might feel good to believe that you have no chance at starting a successful company because of circumstances beyond your control, but it’s just a copout. The real truth is that everyone has advantages and disadvantages. Many rich people have a crippling weakness which is that they do not know what it means to be hungry for something and to be driven by the fear of failure and a life of destitution. They may have no motivation to do anything because at the end of the day they are still rich, and if they are driven by a desire to be a success in the eyes of their family they have a much higher bar to achieve than a middle-class person. Sure it’s better to have money and connections than not, but it’s not a fact that is relevant to an entrepreneur; whether you’re rich or poor it’s strictly a philosophical point.

      Entrepreneurs are those who are driven to succeed utilizing the resources and talents they have available. They do not stop to think about their disadvantages and what destines their failure. Instead they observe what is working and relentlessly improve themselves and their business to find a path to success. For every entrepreneur there are dozens of wannabes and followers who have a dream but talk themselves out of taking any action. Not every entrepreneur will succeed, but they give themselves a chance, which is more than you can say for the naysayers.

  2. I couldn’t agree with this more.

    There’s no point in dancing around it: there are a lot of sociopaths in business. A lot of people will maintain a relationship for as long as they can see some value in it, and then drop it. This is shortsighted: you never know when a relationship will be useful in the future, for one thing, but also, it’s simply the wrong way to treat people. People will remember when you treat them well, and because we’re all connected, through our various networks in ways that might not immediately be obvious, the effect will spread.

    One of the positive aspects of Silicon Valley that people don’t talk about much is how friendly people are, traditionally. They’re just nice. That makes for a productive environment, where people are accessible and feedback is forthcoming. Even arch competitors are often great friends. Contrast to London, for example, where people are on average much more guarded and less welcoming, and you can see why California has the competitive advantage.

    • robfitz says:

      I’m in London. If you’re there, you should come to startup burger nights on Mondays in shoreditch. There’s a link in the header. We’re friendly!

  3. Alexis Peterka says:

    Earlier this week someone asked me how I got into a tech startup incubator. I thought a while and told him that I got in because I ran a monthly pitch club night for startup types… for a year before I applied.

    It’s easy to grouse about how people get ahead based on relationships. There’s no such thing as an unfair advantage in this context. Bo worked his ass off to earn the goodwill that provided his opportunities. I worked my ass off to get into an incubator, and it was way harder than holing up in my basement writing code.

  4. John Q Passerby says:

    I had similar thoughts (“that’s hardly bootstrapped”) watching that interview, this has certainly made me rethink some things.

  5. Tiago says:

    I just got here and I’m already glad I did. “you’re best off staying away from the big ideas and choosing something your current resources do make practical” is very good advice for my current situation, thanks for this!

    Hey Rob, is there any particular reason why you don’t have “previous post” links on each of your posts? If you ever find the time I’d really appreciate that feature, I think I’ll be devouring your content very soon.

  6. Mat Cegiela says:

    Great example of right-side-up thinking. We all tend to think up-side-down about those things. But the appropriate question is what are some of the ways I can accumulate this kind of karma.

    I would be interesting to take successful people who start at level 1 (average upbringing and no connections) and map out their progression from A to Z. The people they met, the things they saw and experienced that propelled them to the next level.

    It’s incredibly tough, coming from a position of scarce resources. So your insight is all the more appreciated.

    Thanks Rob.

  7. Josh Ledgard says:

    Great post. It summarizes our view with KickoffLabs. We built it, in part, to help other entrepreneurs like ourselves get started. We know it’s not the biggest market, but we had to start collecting contacts that will help us with our next couple of ventures. :)

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